Trenton, New Jersey, accepted $22 million in state aid because of the deep budgetary hole it was in. That lifeline from the state came with a number of restrictions. Bloomberg Businessweek, Dec. 5, 2011 at 38, mentions that one of the constraints is that the state’s Community Affairs Department now has the right to approve the “hiring of outside contractors such as lawyers.”
There must be a law department for a city the size of Trenton, and this degree of oversight and approval drastically restricts the managerial authority of its top lawyer and the other lawyers in the department. The article suggests that other states are imposing similar limitations on cash-strapped cities that tap state funds. I would imagine that if the state agency takes the responsibility for approval seriously, the process of Trenton retaining outside counsel will significantly slow and complicate.