“Tapped out” Detroit is facing a $380 million deficit, but the firm hired to restructure the city’s finances pays its lawyers $1,000 an hour because “that’s the going rate”.

The company hired to restructure Detroit’s financing, Jones Day, has stacked up a $1.4 million bill, according to a report by another law firm AM Law Daily, which obtained the figures. The report added that lawyer David Heiman has billed the city $149,419 for 153 hours of legal work since March, reports a WWJ, a local TV channel.

AM Law Daily said that the 153 hour or six week total amounts to more than one-third of what Jones Day is owed under their contract to city authorities.

Charlie Langton, a legal analyst at WWJ – a CBS owned Detroit based TV channel – said that the man who approved the $1.4 million fee used to work for Jones Day, raising the possibility of a conflict of interest.

“Emergency manager Kevyn Orr approved the fees totaling about $1.4 million, but what makes this even more controversial is that the law firm getting all the money is Jones Day – that’s Orr’s former law firm. Oh, you want some more controversy? That $1.4 million is just for six weeks of work,” Langton said.

“Detroit is going bankrupt and that’s the going rate,” he added.

Orr is a bankruptcy expert who was hired in March by the state to sort out Detroit’s perilous finances, which are running into a $380 million deficit, but which in the long-term could hit $17 billion. Orr is asking bond owners to accept steep mark downs on what they’re owed as a short term way of easing the debt burden.

The report details that the costs were connected to advice on restructuring, labor and pension analysis and chapter 9 advise relating to the US Bankruptcy Code. Orr says that top lawyers are needed because of the amount of money that’s at stake and has defended the fees he’s charging.

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