Trial lawyers deep in debt?

posted at 8:48 am on September 28, 2009 by Ed Morrissey

Break out your best lawyer jokes today, because according to the Washington Times, the litigators don’t have any money to fight back.  As Republicans ramp up pressure on Democrats and the White House to include comprehensive tort reform in any overhaul of the American health-care system, one could expect the trial lawyers to respond with threats of donation boycotts or funding of opponents in next year’s midterms.  However, the American Association of Justice — the lobbying group for litigators — has gone $6.2 million in the red:

The trial lawyers lobby has been awash in debt and bleeding members – just as it embarks on a national campaign to block any clampdown on medical malpractice lawsuits as part of President Obama’s health care overhaul.

The American Association for Justice, the most prominent group representing plaintiffs’ attorneys, has seen a shake-up in its executive suite and has struggled to deal with what appears to be a mounting budget shortfall. To help it fight congressional efforts to make it harder for patients to sue doctors and lawyers, it recently sent out an extra solicitation to its members, asking them to fork over money for a lobbying campaign.

The most striking evidence of its financial woes is a swift decline in income, which resulted in a more than $6.2 million deficit in its operating budget for the fiscal year ending July 31, 2008, the most recent year for which data are available.

The biggest hit to its books was in membership dues, which dropped from $28.6 million in 2005 to $19.2 million in 2008, according to the annual AAJ financial report for that fiscal year filed with the Internal Revenue Service.

It actually is worse than it sounds.  Their annual expenditures have remained fairly constant at $34 million, but their revenues have dropped by about 25% over three years, part of which has been a one-third drop in membership dues.  Last year, the AAJ took on $14 million in debt in order to maintain their lobbying operations.

However, like most political organizations, policy crises can serve as a godsend.  If Congress gets serious about tort reform, it could give the AAJ a boost in both membership and donations to fight it.  Litigators who drifted away from the organization might be inclined to return and to put money into protecting their own revenue streams.  However, few people take the risk seriously enough to worry that this Congress and this White House will demand tort reform, so a rebound on this issue seems rather unlikely.

It will have its own ramifications for the midterms, however.  If the AAJ can’t get itself out of debt, it will not be able to play as big a role in electoral politics, just when their favored Democrats will be most vulnerable to voter wrath.  Their limitations will almost certainly mean fewer Democrats will get elected, and especially fewer Democratic incumbents.

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MarkTheGreat on September 28, 2009 at 12:45 PM

My sense of humor is fine. However, I didn’t realize that I would offend some to the extent that I have. Wasn’t my intention, and I regret doing so (see my post @ 10:20).

What I also didn’t anticipate was the number of apparent conservatives who, like whiny Libs, believe they have the right to an offense-free life. No serious-minded person could believe my retelling of a seriously old joke was an advocating of molestation, a condemnation of an entire religous orthodoxy, or anything else but a tasteless joke. But of the three professions, yes, I am more than a bit tired of the pomposity -to say the least- that seems to generally hallmark the character of so many of the practitioners of each trade.
So, if you were offended, I apologize. If, however, you think I’ve committed some grievous offense beyond a social faux pas… suck it.

Doorgunner on September 28, 2009 at 1:27 PM

Great! /s Now they’ll all try to run for Congress.

yoda on September 28, 2009 at 1:44 PM

ATLA is no more – AAJ replaced them (in name only).

My civilian job is managing mass litigation claims for a huge Swiss Insurance Behemoth. I have seen claims come down a bit – when asbestos suits start to run down, there will be an entire subset of the plaintiff’s bar that will have to switch to something else. That will be a big kick in the sack to the AAJ – I think they have the most ready $ (that is where Barron got most of his $, and Peter Angelos and Mark Lanier – when he isn’t trying to put medicine makers under).

LTC John on September 28, 2009 at 2:01 PM

Their limitations will almost certainly mean fewer Democrats will get elected, and especially fewer Democratic incumbents.

Now, that’s news I can use.

Blacksmith8 on September 28, 2009 at 2:33 PM

they just need a bail out. We should give them
some of the stimulus money. We should just make
everything a right and it should be free. Expect
everyone to start sending me money effective
immediately. Go get your checkbooks..Now.

uber on September 28, 2009 at 2:36 PM

workeman’s comp attorney’s, divorce attorney’s, class action attorney’s, they are bottom feeders.

right2bright on September 28, 2009 at 9:19 AM

Uuummm…no, WC attnys make NOTHING. Need to make it up in volume and employers and insurance companies take terrible advantage of low level employees. You never see a vice president or doctor on workers’ comp. Only poor low wage earners who know nothing of their rights and are really taken advantage of because of it. Got to disagree with you on this one.

NJ Red on September 28, 2009 at 3:20 PM

What. A. Bummer!
There must be SOMEONE they can sue over this!

mrt721 on September 28, 2009 at 4:26 PM

There were two lions walking single file. The lion in the back stuck his tongue up the behind of the lion in front. The lion in front swung around, smacked him and said, “Cut that out!! Why on earth did you do that?”

The lion in the back said, “Sorry, I just ate a lawyer and I was trying to get the taste out of my mouth.”

Daggett on September 28, 2009 at 9:26 AM

Oh! Oh! Oh! My sides are splitting!!!! Oh My God!



ExpressoBold on September 28, 2009 at 6:35 PM

I wouldn’t worry. A couple of hot cups of Mickey D’s coffee in their laps and they’ll be in the black again.

Ben Froland on September 28, 2009 at 10:40 PM