May a judge keep accumulated retirement funds in a former law firm’s Keough plan?
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This page answers the general question as of 1991. Ask about yours and see what the current rules of professional conduct in your state say for your facts, with citations.
Plain-English summary
A judge had accumulated retirement funds in a Keough plan created while the judge was a law-firm partner. The plan was managed by a bank, with firm partners directing investments. After taking the bench, the judge no longer directed the common fund or contributed to it.
The Commission allowed the funds to remain in the plan if the judge established a sub-account under the judge’s investment authority, paid its management fee, and received no further firm contributions. It found no Canon violation on those facts.
The opinion applied Canons 3C and 5C, concerning impartiality, financial dealings, and managing investments to minimize disqualification. It compared an earlier opinion about a judge and lawyer participating in the same investment club.
Currency note
This opinion was issued in 1991, after the Alabama Supreme Court’s 1975 adoption of the Alabama Canons of Judicial Ethics. Subsequent amendments or later opinions may have changed the analysis. Treat this page as historical context and verify the current Canons and linked opinion before relying on its conclusions.
Common questions
Q: Could the judge leave funds in the old firm’s plan?
A: Yes, under the separate sub-account and no-further-firm-contribution arrangement described in the opinion.
Q: Who had to pay the sub-account management fee?
A: The judge, rather than the former firm, under the arrangement approved by the Commission.
Background and rules framework
The opinion applies Canons 3C and 5C, including 5C(1), (2), and (3), and cites Advisory Opinion 76-3 on participation in an investment club.
Citations and references
Alabama Canons of Judicial Ethics:
- Canon 3C
- Canon 5C
- Canon 5C(1)
- Canon 5C(2)
- Canon 5C(3)
Other authorities cited:
- Alabama JIC Advisory Opinion 76-3, judge and lawyer membership in an investment club.
See also
Source
- Landing page: Alabama JIC advisory opinions
- Original PDF: Advisory Opinion 91-417
- Canon history: Alabama JIC, Canons of Judicial Ethics
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
91-417
Judicial Inquiry Commission
800 SOUTH MCDONOUGH STREET
SUITE 201
MONTGOMERY, ALABAMA 36104
April 30, 1991
The Judicial Inquiry Commission has considered your request for an opinion concerning whether, under the Alabama Canons of Judicial Ethics, a judge may continue to participate in a KEOUGH retirement plan set up by his old law firm while he was a partner in the firm or is the judge required to withdraw his portion of the investment funds. Under the arrangement, the fund is presently managed by a bank and the partners in the law firm direct the bank trustee as to the investment of the funds. After assuming the bench, the judge no longer participates in directing the investment of the funds or making further contributions to the fund. However, a sub-account may be set up for the judge’s account over which the judge would have investment authority and for which the judge would pay the management fee. It is the opinion of the Commission that the judge may leave his accumulated funds in the KEOUGH plan without violating the Alabama Canons of Judicial Ethics if he sets up the sub-account for which the judge pays the management fee as described and into which the law firm makes no further contributions on the judge’s behalf. This opinion is based upon Canons 3C and 5C. The Canons provide in pertinent part as follows: Canon 3C (1) A judge should disqualify himself in a proceeding in which his disqualification is required by law or his impartiality might reasonably be questioned, .... Canon 5C (1) A judge should refrain from financial and business dealings that tend to reflect adversely on his impartiality, interfere with the proper performance of his judicial duties, or exploit his judicial position. (2) Subject to the requirements of subsection (1), a judge may hold and manage investments .... and engage in other remunerative activity including the operation of a business. 91-417 Page 2 (3) A judge should manage his investments and other financial interests to minimize the number of cases in which he is disqualified. In interpreting the provisions of Canon 3C this Commission previously advised in Advisory Opinion 76-3 that participation in an investment club does not require the judge’s disqualification in proceedings in which a lawyer member of the club represents a party to the proceeding. We reach the same conclusion in this instance where the judge maintains a sub-account and the law firm makes no further contribution, including a management fee on behalf of the judge. We further note that Canon 5C specifically allows a judge, subject to certain requirements, to hold and manage investments. These requirements are, as set out above, that the holding of the investments does not interfere with the proper performance of the judge’s judicial duties or reflect adversely on his impartiality. Under the facts stated, the participation in the KEOUGH plan violates neither of these requirements. Sincerely, JUDICIAL INQUIRY COMMISSION
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