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February 19, 1997
Honorable Victor A. Fleming
Little Rock Municipal Court
600 West Markham
Little Rock, Arkansas 72201
Re: Advisory Opinion # 96-09
Financial Issues as Lawyers Leave Firms to Assume Judicial Offices
Dear Judge Fleming:
This committee has been asked several questions in regard to
financial issues presented by lawyers leaving firms and assuming full-time judicial
duties. Rather than respond to the particular inquiries, this committee has decided to
write a broader opinion to give guidance to you and those with similar situations in the
future.
1) After selection for the bench, and prior to assuming the position
as a full-time judge, the attorney may continue to practice law. The attorney may be
compensated according to a partnership or employment agreement.
2) The terms of an agreement may provide for compensation to the
attorney regardless of when the work is performed. In our opinion, a distinction must be
drawn between work performed in the firm before the judge departs and work performed by
members of the firm after departure.
On joining the bench, judges are generally no longer permitted to
serve as corporate directors, Canon 4D (3), to act as executors of an estate, Canon 4E, or
to practice law,
Canon 4F. Similarly, judges should not be paid by the firm for work
done by other members of the firm after the judge has left the firm. Such an arrangement
is not consistent with the prohibition against the appearance of impropriety. Canon 2.
Therefore, prior to the time of departure, the firm and the departing attorney should
calculate the value of the share or fee to be paid.
Hourly fee matters within the firm at the time of departure can
easily be calculated. Pending contingency fee matters are more difficult. The judge and
the firm should evaluate such matters as of the time of departure based on the likelihood
of success, the likely recovery, and the amount of work performed to date. But the
underlying principle should be clear -- compensation to the judge cannot be based on work
performed after departure. See Shaman, Lubet & Alfini, Judicial Conduct and Ethics,
2nd Ed. (1995), pp. 234-236.
The payment to the departing attorney may be in a lump sum or in
installment payments that end at the earliest practicable date, ideally within a few
months. While the judge is receiving funds from the firm, the judge is obviously required
to recuse in any matters involving the firm.
3) The question has been asked whether the judge may receive Aclient
attraction funds" from the former firm if the judge makes a referral to the firm. It
has been suggested that the judge might tell persons who ask the judge to represent them
that he or she no longer practices law but that they could get Agood representation at my
former firm". Such a payment is not permitted. First, once an attorney becomes a
judge, he or she should never make a referral to any other attorneys. The judge can refer
the person to the Arkansas Bar Association or to any other appropriate referral agency.
The second point is that a judge should never make a referral whereby he or she
would receive compensation. Canon 4D (1) (a) provides in part that, AA judge shall not
engage in financial and business dealing that : (a) may reasonably be perceived to exploit
the judge's judicial position . . .@ and to make a referral to the judge's former firm
expecting compensation would violate this section of the Code.
Sincerely,
Howard W. Brill
For the Committee
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