Can a newly-elected judge sell the judge's old law practice for a price tied to how much the buying firm later collects from those former clients?

Plain-English summary

A newly-elected judge had built a varied law practice with hundreds of clients and no pending litigation. A prospective buyer offered a cash down payment plus 20% of any fees collected from the client list over the next five years. The judge asked whether the contingent-price sale was ethically proper. The committee concluded it was not.

The committee first confirmed that DR 2-111, recently adopted, applies to a lawyer "retiring" from practice to assume judicial office, so the judge may sell the practice, including good will, subject to the rule's conditions. The problem was the contingent price: because the total purchase price depended on the acquiring firm's future success in retaining the former clients, the arrangement would give the judge an inducement to help the firm keep those clients' favor after taking the bench.

The committee held that inducement, which could reasonably be inferred, ran afoul of the Code of Judicial Conduct. Canon 2 requires a judge to avoid impropriety and its appearance and to promote public confidence in the judiciary's integrity and impartiality. Canon 4(D)(1) bars financial dealings that may reasonably be perceived to exploit the judicial position or that involve the judge in continuing business relationships with lawyers or others likely to come before the court. While a judge may collect fees earned before leaving practice, a price tied to the buyer's future retention of the former clients violated these provisions, so the contingent-price sale was proscribed.

Currency note

This opinion was issued in 1998, under New York's former Code of Professional Responsibility, which New York replaced with the Rules of Professional Conduct in 2009. The opinion also applied the Code of Judicial Conduct, which has since been revised. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a judge sell the law practice he or she ran before taking the bench?

A: The opinion concluded yes. DR 2-111 applies to a lawyer retiring from practice to assume judicial office, so the judge may sell the practice and its good will, subject to the rule's conditions.

Q: Why was the contingent purchase price a problem?

A: The opinion held that a price tied to the buying firm's future fees from the former clients would induce the judge to help the firm keep those clients, which could reasonably be perceived as exploiting the judicial position under Canons 2 and 4(D)(1).

Q: Can the judge collect any fees from the old practice?

A: The opinion said a judge may collect fees earned before leaving practice; what it barred was a sale price contingent on the buyer's future success in retaining the former clients.

Background and rules framework

The opinion interpreted DR 2-111 of New York's former Code of Professional Responsibility (sale of a law practice on retirement) together with Canon 2 and Canon 4(D)(1) of the Code of Judicial Conduct (avoiding impropriety and prohibited financial dealings). The Model Rule analogue for the sale itself is Rule 1.17 (sale of a law practice). New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009; the DR number cited here is historical.

Citations and references

Rules of Professional Conduct:

• MR 1.17 (sale of a law practice)
• NY DR 2-111
• Code of Judicial Conduct Canon 2; Canon 4(D)(1)

Other opinions cited:

• N.Y. Advisory Committee on Judicial Ethics, Op. 93-44 (1993): a judge may collect fees earned before leaving practice

See also

• NY State Bar Op. 707: Selling part of a law practice
• NY State Bar Op. 701: Part-time judge whose partners and associates appear as counsel

Source

• Landing page: https://nysba.org/opinion-699/