Shocker! Plaintiffs' Firms Contribute To Political Elections That Impact Their Practice

The financing of elections by corporate parties has certainly been in the news this month.

And today, The Wall Street Journal takes a thorough look at political contributors of a different kind — lawyers and law firms who donate to state and local elections far from their home base and then happen to get named to represent that jurisdiction in big time class action suits.

There is a lot of criticism of this type of donation.

“Plaintiffs’ lawyers donate because they think it buys them access to people who make decisions over how pension funds select counsel,” Fred Isquith, a partner at Wolf Haldenstein Adler Freeman & Herz LLP, a plaintiffs’ firm in New York, told the WSJ. This giving “creates an appearance of complete impropriety,” he said, and “should be outlawed.”

That, of course, is the rub. It’s totally legal. The ABA looks down on it — firms should not contribute “for the purpose of obtaining or being considered for,” guidelines read.

But firms say they contribute to candidates, wherever they happen to be — that support shareholder rights, the bread and butter of securities and pension class actions.

So…what? Well, it does not look good, for sure. The WSJ has tons of examples (really, the whole thing is worth the read), but one notable highlight is the state of Ohio, whose candidates have received the most donations ($1.65 million) from out-of-state plaintiffs firms over the past decade.

Current Ohio AG Richard Cordray, known for, and admittedly pursuing, an “aggressive litigation strategy” has hired five firms that donated to the state Democratic party candidates fund in 2008. Only six firms overall have been hired to pursue pension fund lawsuits, the article said.

If you are a lawyer, the idea of pay-for-play sounds distasteful, and in an ideal world it would not happen. But here are the facts: AGs, treasurers, and judges are elected, and those people directly impact the business of law firms.

Most firms, large and small, make donations to elections, near or far, that could make a difference to their bottom line.

And certainly corporations make donations to all sorts of political causes — now more freely post-Citizens United — that impact their businesses. 

So this doesn’t look good, but it’s a cost of doing business. If we want politicians to not show favoritism for firms or anything else, then election systems have to be changed. 

And until the rules change, expect plaintiffs’ firms to keep donating.

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