What compensation and referral payments could a lawyer receive after leaving a firm to become a full-time judge?

Plain-English summary

The Committee gave general guidance for lawyers leaving firms to become full-time judges. It allowed continued law practice and contractual pay before assuming judicial office. At departure, it said the judge’s share of existing matters should be valued based on work already performed, including an assessment of pending contingent matters.

It rejected compensation for later work by the firm and payments for sending clients to the former firm. It said payments for pre-departure work could be made in a lump sum or installments ending as soon as practicable, and required recusal from firm matters while payments continued.

Currency note

This opinion predates the Arkansas Code of Judicial Conduct that took effect July 1, 2009, as stated in JEAC Opinion 2009-04. Later rules and opinions may have changed the analysis. Treat this page as historical context and verify the current Code before relying on a specific rule.

Common questions

Q: Could the former firm pay the judge for work its lawyers did after departure?

A: No. The Committee limited compensation to work valued before the judge left.

Q: Could the judge receive a payment for referring a potential client to the former firm?

A: No. The opinion rejected both judicial referrals to attorneys and compensation for such referrals.

Q: What did it say about cases involving the former firm while payments continued?

A: It required the judge to recuse from those matters.

Background and rules framework

The opinion applied then-current Canons 4D(3), 4E, 4F, 2, and 4D(1)(a) to outside work, financial dealings, and the appearance of impropriety.

Citations and references

• Arkansas Code of Judicial Conduct Canons 4D(3), 4E, 4F, 2, and 4D(1)(a).
• Shaman, Lubet & Alfini, Judicial Conduct and Ethics, 2d ed. (1995), pp. 234-236.

See also

No sibling opinions yet indexed.

Source

• Landing page: https://jddc.arkansas.gov/opinions/opinion-no-96-09/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

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