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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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