No Raise, No COLA, No Love

On Oct. 8, all Article III federal judges got a double shot of bad news — not only would they not get the pay raise from Congress that U.S. Supreme Court Chief Justice John Roberts Jr. had pushed for, but they wouldn’t get an annual cost-of-living adjustment [COLA] either. In an e-mail the judges received, Sarah Evans Barker, president of the Federal Judges Association and a U.S. district judge for the Southern District of Indiana, laid out the sad tale of the salary stiff and added this bit of salt to wound: “To have had the COLA withheld from us, even as Congress gave itself one, added insult to injury. As the Third Branch, we surely did not deserve the hand we were dealt by Congress, in terms of their seeming indifference and broken promises.” U.S. district judges currently make $169,300 a year, while circuit judges make $179,500. Congress withheld COLAs from federal judges in 1994, 1995, 1996, 1997, 1999 and 2007, according to the Administrative Office of U.S. Courts. And Congress hasn’t approved a statutory pay raise for the Article III judges since 1989. Roberts last year called on Congress to pass the Pay Restoration Act, which would at least raise the pay to a level that accounted for the lost COLAs in an effort to help keep overworked judges on the bench. Federal judges in Texas are not happy, including U.S. District Judge George Kazen of Laredo, who has been on the front lines hearing a crushing load of drug and immigration cases on the Texas-Mexico border for decades. “That’s what you call a failed campaign when we try to have pay restoration, but that failed, and so did the COLA,” Kazen says. “You’ve got to laugh, or otherwise it’s too damn irritating.” Kazen doesn’t hold out much hope he’ll get a raise anytime soon. “Now it becomes almost impossible to talk about because of the utter collapse of the financial markets. . . . It would be really hard to weep about not getting a pay raise,” he says. “But the COLA is unexplainable. Why?” Sidney Fitzwater, chief judge of the Northern District of Texas, can’t explain the judicial pay slight either. But Fitzwater assigns no ill will on the part of the legislative branch of government. “I think it was an oversight, and I know of no intention not to give us a COLA when everyone in Congress has received a COLA and in the federal government.”

Tough Transactional Times

Stacy Humphries, an attorney placement recruiter in the Houston offices of MS Legal Search and a former Vinson & Elkins lawyer, says there’s no question the liquidity crisis has hit home, particularly for recruiting among corporate transactional lawyers. Until a few weeks ago, Humphries says, most large firms in Texas had standing openings for corporate transactional lawyers for the past two years. “They told us if you come across a good candidate, send him or her our way,” says Humphries. No longer. Now firms’ corporate transactional departments have clients who, because they cannot get credit, postpone deals or cancel them altogether, she says. As a result, the firms don’t have enough work for their own lawyers, much less want to take on more manpower. William Cobb, the founder of Cobb Consulting, another recruiting firm in Houston, says he is seeing the same trend in Texas and the rest of the country. But Elaine Makris Williams, the founder of MS Legal Search, has seen what she refers to as a “bizarre” bright spot for recruiters: in-house openings. “In the last two weeks,” she says, “we’ve had all these calls about in-house openings. I don’t know what it is, if it’s because people now finally have the time to call us because they don’t have other deals or what,” says Williams.

More In-House Hires

It hasn’t happened yet, but in-house counsel at 358 corporations, including 251 in the United States, expect the number of new suits and regulatory proceedings to increase over the next year. They also figure they will need to hire more in-house lawyers to handle those larger dockets. That’s the word from Fulbright & Jaworski’s 2008 Litigation Trends Survey, which was conducted from May 22 through July 18 and made public Oct. 14. The volume of new litigation was down in 2008, compared to 2007, with in-house lawyers at 21 percent of the companies reporting no new litigation filed against their company during the survey period, compared to 17 percent the previous year. And the suits that were filed over the last year were smaller — only 26 percent of the U.S. companies represented in the survey found themselves a defendant in a suit seeking more than $20 million in damages. The in-house lawyers who participated in the survey, however, expect the situation to change over the next year — 34 percent of the U.S. in-house counsel expect to see an increase in the number of suits filed against their company over the next year. In the 2007 version of the survey, only 22 percent of the in-house lawyers in the United States expected an increase in the number of filings. That means in-house opportunity for lawyers, too. The in-house lawyers who participated in the survey, by a five-to-one margin, report they are more likely to expand the size of their corporate legal departments than shrink them. Greenwood Associates, a business research firm in Houston, conducted the survey.