The Tennessee lottery hired a Memphis law firm to help handle legal issues for the games even though board members knew it didn't meet a bid requirement of being in business for three years.
In fact, Spence & Wade PLLC was not officially formed until the day the lottery's legal services' selections were announced. The law firm was part of a consortium of four firms - led by Nashville-based Waller, Lansden, Dortch & Davis - chosen in August to represent the Tennessee Education Lottery Corp.
The other firms are Burch, Porter & Johnson of Memphis and Metz, Hauser & Husband of Tallahassee, Fla. The firms work at a maximum hourly rate of $240.
Spence & Wade - a two-man operation composed of Memphis city attorney Robert Spence and Memphis City Council attorney Allan Wade - originally partnered with two other groups in applying for the lottery's legal services contract. But the board asked them to join the Waller Lansden group based on "the strength of their qualifications, presentation and overall reputation," officials said when the selections were announced.
Spence and Wade are black, so selecting their new firm also helped the lottery toward its goal of 15 percent minority participation in all aspects of the games' operation.
Lottery spokesman Will Pinkston said that although Spence & Wade doesn't meet the minimum eligibility requirement of three years in business, it won't affect the service the lottery receives.
Lottery officials re-examined the decision to hire Spence & Wade after media reports questioned why the firm didn't meet the games' minimum requirement for years in business, he said.
"A strict read of the application shows (the three-year requirement) is designed for a single-firm scenario. That's not the way it went, so the decision was to apply the rule to the firm that is quarterbacking the work - which is Waller Lansden," said Pinkston, who added that Waller was established in 1905.
Pinkston said the lottery board knew the men weren't officially in business together when they considered the proposal in a meeting closed to the public. But he said a key factor was finding "people with strong experience in government law" - something Spence and Wade count among their specialties.
"They were two lawyers who have done a lot of government work, who individually had a lot of depth of experience in that area of law, but hadn't formalized a relationship," Pinkston said. "They've done good work."
Wade said this week that the lottery was right to consider them for the contract in spite of the three-year requirement because he and Spence have almost 50 years of individual law experience combined.
"The lottery is essentially a public entity that has to deal with public issues like open records, open meetings, public bidding and development of minority participation programs," Wade said. "These are all things Robert and I deal with on a daily basis in representing the city (of Memphis). I dare say no other applicants had that expertise."