Practice Of Lawyers 'Buying Business' On Rise

Tue. May 9, 2000 12:00 AM by Brian Decker

Champaign, IL - "Pay-to-play," the practice whereby lawyers make political contributions to government officials who award legal contracts, has been stubbornly resistant to reform, according to a University of Illinois legal scholar.

While there is no way to determine how often lawyers "buy business" by contributing to political campaigns, evidence indicates that the practice is growing as the cost of political campaigns escalate, writes Samantha M. Cohen, notes and comments editor of the University of Illinois Law Review.

Cohen cited studies of state elections where the legal community donates millions of dollars to gubernatorial candidates who have power over legal work ranging from highway bonds to state pension funds. For example, the law firms of 33 lawyers in Pennsylvania who each pledged at least $25,000 to Gov. Tom Ridge's 1995 re-election campaign subsequently received $18 million in state contracts, including 70 percent of the state's bond work.

A "pay-to-play" atmosphere has increasingly clouded legal representation of state pension funds. Since 1995, according to Cohen, "there has been a notable increase in the number of lawyers contributing to the campaigns of elected officials who run state investment funds." Ironically enough, the increase in political contributions runs counter to the goal Congress had when it enacted a law in 1995 giving pension funds and other institutional investors an increased role in class-action lawsuits.

The courting of "public pension pots" by politically astute law firms has come under increasing scrutiny and controversy because "currently nothing more than an honor system regulates the attorney appointment process," Cohen wrote.

Of the various proposals to curb pay-to-play, Cohen contended that the best system would take the appointment of lawyers out of the hands of elected officials and place it under the purview of the courts. Through an "auction" system pioneered by courts in California for securities litigation, lawyers could continue to exercise their right to participate in the political process without their donations acting as a prerequisite for receiving government work.

The auction process would shift the focus of a lawsuit away from a lawyer's "monetary gain and self-advancement -- factors that motivate pay-to-play -- back to the best interests of the plaintiff. Furthermore, by setting attorneys' fees in advance, competitive bidding avoids the 'piling on' of billable hours and unnecessary work, which lengthen proceedings and belabor settlement talks."

According to Cohen, law firms could submit their bids to a judge who, after evaluating the bids on the basis of experience, capability and cost, could appoint the firm most closely aligned with the pension fund's interests.