This week, I'm going to be offering daily postings on the Manhattan Institute's new report, Trial Lawyers, Inc.: K Street--A Report on the Litigation Lobby 2010. This is the sixth full-length report and the fourteenth overall entry in the Trial Lawyers, Inc. series, which we launched in 2003. All the reports are available here.
(The press coverage and other reactions are currently listed in the sidebar to the right and can also be located here. Some readers might be particularly interested in listening to our teleconference release event (including comments by the ranking members of the Senate and House Judiciary Committees, Jeff Sessions and Lamar Smith; the 75th Attorney General of the United States, Ed Meese; and Victor Schwartz, a partner at Shook, Hardy & Bacon and co-author of Prosser, Wade & Schwartz's Torts, the most-used torts casebook in law schools). Those with less time available (the full teleconference is about an hour) can download a podcast with me and Manhattan Institute Vice President Howard Husock.)
As described in our original 2003 report, the series is intended to "shed light on the size, scope, and inner workings of an industry poorly understood by the media and the general public," namely the plaintiffs' bar. The glossy publications have the look of annual reports; we noted that "public corporations must disclose their financials in 10-Ks according to SEC regulations," but lawyers "have shielded their financials from public scrutiny." So the Trial Lawyers, Inc. series is our effort to undo some of this information imbalance.
Prior iterations in the series have focused on specific litigation business lines (like asbestos or health care) or geographic areas (states, like Illinois or California). This newest entry focuses on a part of the lawyers' business that is vital: its public-relations and government-relations apparatus.
In summarizing the report, I'm dividing up my daily posts as follows. Today, I'm going to look at the big picture, with an eye toward answering the following questions: How much do lawyers give? Don't other businesses give a lot, too? And why should we care?
Tomorrow, I'll discuss the historical evolution of the plaintiffs' bar, which got us here. On Wednesday, I'll go over the lawyers' public-relations efforts. Thursday, I'll look at the lawyers' state-level government-relations activities. Finally, on Friday, I'll sum up their government-relations efforts at the federal level and offer some concluding thoughts.
For today, the Big Picture:
- How much do lawyers give? According to data aggregated by the Center for Responsive Politics, non-lobbyist lawyers have given more than $1 billion to federal campaigns since 1990. $780 million of that sum came in the last decade, over which lawyers also gave $725 million to state-level campaigns (according to the National Institute on Money in State Politics).
Some will object that these numbers are overinclusive, since they doubtless include defense-bar and transactional attorneys; and will argue that I should instead focus on the political action committee donations of the plaintiffs' bar, which are far smaller. (Since 1990, contributions by the political action committee of the plaintiffs' bar, the Association of Trial Lawyers of America (now called the American Association for Justice) have been $33 million. This sum places the lobby among the top donors to Democratic Congressional candidates, but it constitutes a rather small percentage of overall political giving.)
PAC donations, however, do not tell close to the whole story. The real power in political fundraising lies with "bundlers," who work within the confines of the relatively low contributions limits permitted by federal campaign-finance law (and sanctioned by the Supreme Court in Buckley v. Valeo). And as I explained in my Wall Street Journal column last week, the plaintiffs' bar has "thousands of well-heeled members willing to write $2,000 checks."
There's no way to disaggregate defense- and plaintiffs'-side political contributions, and several large corporate firms do show up as large contributors. But that's primarily because they are big, as we discovered when we started crunching the numbers: "The average lawyer at the giant defense firm DLA Piper has contributed $118 to federal campaigns, and at peer firms K&L Gates and Hogan & Hartson it has been $232 and $264, respectively; by comparison, the average lawyer at the plaintiffs' firm Simmons Cooper gave $4,231, at Girardi & Keese $7,917, and at Clifford Law Offices $14,175."
Moreover, the plaintiffs' bar has given strategically to those who control the levers of power: "Two of the top five private contributors to the Democratic Senatorial Campaign Committee in the last campaign were plaintiffs' law firms--New York asbestos and class action giant Weitz & Luxenberg ($505,400) and Illinois asbestos powerhouse Cooney & Conway ($326,500). Over the last five years, Weitz & Luxenberg has also been the third-largest contributor to Senate majority leader Harry Reid (D-Nev.), who counts plaintiffs' firms as four of his top seven contributors. The top two, and seven of the top twenty, donors to Senate majority whip Dick Durbin (D-Ill.) are plaintiffs' law firms, including Cooney & Conway and fellow in-state firms Simmons Cooper (his largest donor), Korein Tillery (his second-largest donor), Clifford Law Offices, Corboy & Demetrio, and Power, Roger & Smith--all featured in Trial Lawyers, Inc.: Illinois."
Finally, as we explain, "the defense bar and plaintiffs' bar have congruent economic interests when it comes to litigation: loose substantive liability rules, loose pleading standards, and open-ended discovery rules increase the defense bar's profits. While defense lawyers are less likely to lobby aggressively against tort-reform legislation--out of a desire not to antagonize their clients--very few lawyers, whether representing plaintiffs or defendants, advocate litigation reform."
- Don't other businesses give a lot, too? Yes, of course. But lawyers give the most. The $1 billion that lawyers have contributed to federal candidates since 1990 is more money than any other industry or profession has given over the same span; indeed, incredibly, lawyers' gifts are more than any other industry or profession in each political cycle. Even if you cut lawyers' donations in half--assuming (probably wrongly) that defense attorneys made up half of the dollars--they'd still be the largest givers in most cycles. That's just how much they dominate the scene.
Lawyers dominate political giving because they have to. While other businesses certainly seek government influence, they aren't wholly dependent on the government for their profits (with the exception of businesses that exclusively supply governments, like defense contractors). Lawyers, however, are private actors who make their money through their unique access to the government's monopoly on the legitimate use of force. Rather than making money by selling products or services to willing customers, plaintiffs' lawyers make money by taking it from unwilling defendants.
Moreover, it's also important to recognize that trial lawyers' interests are highly concentrated. Many industries and professions subject to litigation would like the system to change, but it isn't their top priority: "In the public-policy universe, doctors care about liability but are more worried about the repercussions of health-care reform and the size of Medicare reimbursements; car companies care about liability but are more anxious about cap-and-trade legislation and fuel-efficiency standards. In some instances, industries can be at cross-purposes; efforts at asbestos-liability reform, for example, were stymied in part by a conflict of interest between insurers and manufacturers." With its concentrated interests, the litigation lobby has more influence than its already-outsized giving would suggest.
- Why should we care? I don't need to spend much time here, since most readers who visit Point of Law are already worried about lawsuit abuse, but it's important that I at least briefly mention why we should care about they lawyers' political influence. Here's what I have to say at the beginning of the report:
The annual direct cost of American tort litigation--excluding much securities litigation, punitive damages, and the multibillion-dollar settlement reached between the tobacco companies and the states in 1998--exceeds $250 billion, almost 2 percent of gross domestic product. The indirect costs of excessive litigiousness (for example, the unnecessary tests and procedures characterizing the practice of "defensive" medicine, or the loss of the fruits of research never undertaken on account of the risk of abusive lawsuits) are probably much greater than the direct costs themselves.
Of course, tort litigation does do some good, and it does deter some bad behavior. The problem is that it deters a lot of good behavior, too. Indeed, the legal system does such a poor job of distinguishing between good and bad behavior that the high cost of litigation is effectively a "tort tax" paid by every American. The share of America's economy devoted to lawsuits is far higher than that of other developed nations such as Germany and Japan. Yet America is hardly safer as a result.
Tomorrow, I'll look into how we got here.