Clerkships, Department of Justice, Federal Government, Money, Salary Freeze, Wall Street

Federal Lawyers: Hope You’ll Still Enjoy Your 2010 Salary in 2012

There was a time in this country where the holiday season was a time to be rewarded for a good year of work. People received bonuses. People received pay raises, so their salaries could keep pace with their growing experience and maturity (or at least keep up with inflation).

The America where that kind of stuff happened now only exists in memory. In post-recession (or mid-double-dip-recession) America, the holidays are a time when the people at the top jealously guard their wealth, while everybody else tries to figure out how to make “sacrifices” for the greater good.

Usually, this type of thing can be seen most clearly in the private sector (click here for Above the Law’s coverage of bonus season). But today the Obama administration is getting into the holiday spirit by freezing salaries on federal employees for two years.

So, if you’re a J.D. holder who joined the Department of Justice or another federal agency to escape the Biglaw recession, the pay cut you thought you were signing up for just got bigger.

And it probably also means that a few federal attorneys will be trying to get back into the private sector — which will be great, because it’s not like the market for attorneys is oversaturated or anything….

The pay freeze plan sounds pretty straightforward, at least at first. From the Huffington Post:

The Obama administration announced on Monday an ambitious plan to freeze the salaries of federal employees for two years in an effort to address massive deficits and get a handle on the country’s unsustainable fiscal path.

The proposal calls for a two-year pay freeze that would save the country $28 billion in the next five years and $60 billion over the coming decade. It would be applied to all civilian federal employees, including those at the Pentagon, but not to military personnel.

You know what’s going to be funny? When, after explaining how important it is to save $28 billion on the backs of federal employees, the administration turns around and says that it also has to give/maintain a ridiculous tax cut for the wealthiest 1%. And by “funny,” I mean “shockingly hypocritical yet totally predictable given the political climate and the inability of the Democratic Party to evolve a backbone.” You could probably save $28 billion if you raised the retirement age by six months. But we all know that Boomers would rather eviscerate the earning potential of generations X and Y instead of making real changes to the 800-pound entitlement program in the room.

The political story of this freeze will play out, but as with all salary freezes, one wonders how thoroughly the administration has thought this through. One of our readers asks:

Would this work in the same way as a salary freeze at a law firm, i.e., would GS-12 attorneys be prevented from moving up to GS-13? Or would they be promoted to GS-13, but be paid a GS-12 salary? Or neither?

Great questions. If you know how exactly this will be implemented, feel free to share, in the comments. I have no idea — and, more problematically, I can’t be sure that the government has thought this far ahead either.

UPDATE: According to CBS News, “Under the president’s proposal, a federal worker promoted to a higher pay scale would still get a pay raise.” For detailed discussion, replete with analysis of grade versus step versus cost-of-living increases, see the comments to this post.

You’ll be most affected as a federal government lawyer if you are still around in two years — and really, if you are an attorney with options, you probably won’t be. I don’t care what Obama says, what the media prints, or what your managing partner has you believe. There are people in this country who are still making money. A lot of money. And the smart attorneys right now are finding those people and organizations and getting onto those gravy trains as quickly as possible.

Oh, and five or ten years from now, when the country is wrestling with the latest “Wall Street scandal” involving complicated financial instruments that brilliantly evaded federal regulation, remember this salary freeze. And think about all the competent federal attorneys who ran away to greener pastures because of it. The government will always be a step (or ten) behind Wall Street if it refuses to pay its best people a competitive rate.

Federal Pay Freeze: Obama Administration Announces Plan To Freeze Salaries Of Federal Employees [Huffington Post]
Obama Proposes Freezing Federal Employee Pay [CBS News]

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