FLORIDA SUPREME COURT

Judicial Ethics Advisory Committee

Opinion Number: 2015-10
Date of Issue: July 21, 2015

ISSUES

1. May a judge accept a fee, after taking the bench, for a case the judge referred to a law firm prior to the judge taking the bench?

ANSWER: Yes, but only on a quantum meruit basis.

2. Whether the judge is disqualified from presiding over cases in which the law firm to whom the judge made the referral is involved.

ANSWER: Yes.

 

FACTS

Before assuming the bench, the inquiring judge referred a personal injury case to a law firm in which the judge was not a member. The law firm was retained by the client on a contingency basis, and the law firm agreed to pay the inquiring judge a portion of the contingency fee as a “referral fee” pursuant to a written agreement. The inquiring judge proffers that the judge and the law firm complied with Rule 4-1.5(g) of the Rules Regulating the Florida Bar with regards to the “Division of Fees Between Lawyers in Different Firms.” The lawsuit has not yet been filed. The inquiring judge asks if the judge may still accept a portion of the law firm’s contingency fee in the future now that the judge is a member of the judiciary.

Additionally, the law firm has other cases before the inquiring judge. The inquiring judge is concerned that if the answer to the first question is yes, disqualification may be required in these cases.

 

DISCUSSION

 

ACCEPTANCE OF REFERRAL FEE

The threshold question of whether a judge can accept a fee for legal work the judge performed before assuming the bench has been answered affirmatively a number of times.

This Committee consistently has opined that a judge, after taking office, may continue to collect fees resulting from work performed before taking office. See Fla. JEAC Op. 09-09 and opinions cited therein.

In Fla. JEAC Op. 09-09, the Committee opined that the fees to be collected in the future must be calculated based upon legal services which the incoming judge performed on behalf of the client before taking office, and must satisfy the Rules Regulating the Florida Bar’s applicable requirements. If there are fees earned by the incoming judge, but which have not been collected, these fees may be paid to the incoming judge upon collection in the future.

Fla. JEAC Op. 13-04.

The inquiring judge, however, seeks to collect a referral fee from a law firm in which the judge was not a member, rather than a fee from a client for work the judge performed on behalf of the client before taking the bench. The Rules Regulating the Florida Bar impose certain conditions on the division of fees between lawyers from different firms. See R. Regulating Fla. Bar 4-1.5(g). These conditions do not preclude a judge from receiving a referral fee, but they do affect the share of the fee to which the inquiring judge may be entitled.

Rule 4-1.5(g) provides:

(g) Division of Fees Between Lawyers in Different Firms. Subject to the provisions of subdivision (f)(4)(D), a division of fee between lawyers who are not in the same firm may be made only if the total fee is reasonable and:

(1) the division is in proportion to the services performed by each lawyer; or

(2) by written agreement with the client:

(A) each lawyer assumes joint legal responsibility for the representation and agrees to be available for consultation with the client; and

(B) the agreement fully discloses that a division of fees will be made and the basis upon which the division of fees will be made.

Canon 5G forbids a judge from practicing law, unless it is without compensation on behalf of a family member or pro se. This Committee has held that Canons 5A, 5E, and 5G prevent a judge from discussing matters which the judge handled as a lawyer with successor counsel or the client. See Fla. JEAC Op. 05-19 (“[A]ny discussion of pending cases with new counsel that would constitute the practice of law should take place during the process of closing the law practice, not after the judge takes office. After taking office, all further efforts on a former client’s behalf should cease.”). Consequently, after taking the bench, the inquiring judge cannot perform any services which would entitle the judge to a division of the contingency fee under (g)(1); or, assume joint legal responsibility for the representation, and be available for consultation with the client, which would entitle the judge to a division of the contingency fee under (g)(2).

As a result, any division of the contingency fee to which the inquiring judge may be entitled must be calculated as of the date which the judge took office on a quantum meruit basis. The Florida Bar has recognized that the payment of a referral fee to an attorney unable to perform all obligations required by Rule 4-1.5(g) is made on a quantum meruit basis.

This quantum meruit approach is both logical and reasonable. . . . [A] referring attorney who is suspended or disbarred during the course of the representation should not be denied all of his or her portion of the fee. On the other hand, a referring attorney who is suspended or disbarred at some point during the representation becomes unable to fulfill the contractual obligations of responsibility and availability and, therefore, should not receive the entire portion of the fee that he or she contracted for in the required written agreement. Instead, the suspended or disbarred referring attorney ethically may receive payment on a quantum meruit basis for the responsibility that he or she did assume and the time that he or she was available for consultation while licensed to practice.

Prof’l Ethics Comm. of The Fla. Bar, Op. 90-3 (emphasis added). See In re Paul A. Nelson, P.A., 203 B.R. 756, 762 (Bankr. M.D. Fla. 1996) (estate of lawyer who referred cases to other lawyers pursuant to referral fee agreements, but was disbarred before the referral fees were payable, is entitled to a referral fee on a quantum meruit basis as measured by “work performed or the responsibility assumed and availability for consultation prior to suspension or disbarment” of lawyer).

DISQUALIFICATION

The inquiring judge asks whether it is sufficient for the judge to offer to recuse, and do so upon the request of any party. We believe the better approach is for the judge to enter an order of recusal on all cases involving the law firm, without waiting for a party to ask.

Canon 5D(1)(b) provides: “A judge shall not engage in financial and business dealings that . . . involve the judge in frequent transactions or continuing business relationships with those lawyers or other persons likely to come before the court on which the judge serves.” As a result, the Canons require mandatory disqualification when a judge is involved in a continuing business relationship with lawyers who appear before the judge.

This Committee has found that disqualification is required where a judge rents office space to attorneys appearing before the judge through a blind trust which manages the office building (Fla. JEAC Op. 97-33); leases a vacant lot to the Department of Corrections (Fla. JEAC Op. 90-1); owns a parcel of real property jointly with a lawyer (Fla. JEAC Op. 02-19); rents an office space to the Public Defender (Fla. JEAC Op. 87-17); leases real property to an attorney for use as a law office (Fla. JEAC Op. 85-8); maintains an interest in an office building or parcel of property that the judge owns with his former law firm (Fla. JEAC Op. 78-19); or jointly owns a lakeside trailer with the State Attorney (Fla. JEAC Op. 01-11).

The Committee has also consistently found that mandatory disqualification is required where a judge is receiving payments from a lawyer appearing before the judge. See Fla. JEAC Ops. 85-8, 87-24. In the most similar situation, the Committee held that a judge was disqualified from cases involving his prior law firm where the law firm repurchased a judge’s shares and gave him a promissory note for a fixed repurchase price with a payout of six years. See Fla. JEAC Op. 00-34 (Amended).

CONCLUSION

For the foregoing reasons, the inquiring judge may accept a referral fee upon the conclusion of the referred case. However, the fee must be calculated on a quantum meruit basis. Furthermore, because disqualification is required, this Committee recommends that the judge enter an Order of Recusal in all cases involving the law firm pursuing the contingency fee case.

 

REFERENCES

In re Paul A. Nelson, P.A., 203 B.R. 756, 762 (Bankr. M.D. Fla. 1996).

Fla. Code Jud. Conduct, Canons 5A, 5D(1)(b), 5E, 5G.

Fla. JEAC Ops. 13-04, 09-09, 05-19, 02-19, 01-11, 00-34 (Amended), 97-33, 90-1, 87-24, 87-17, 85-8, 78-19.

R. Regulating Fla. Bar 4-1.5(g).

Prof’l Ethics Comm. of The Fla. Bar, Op. 90-3.

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The Judicial Ethics Advisory Committee is expressly charged with rendering advisory opinions interpreting the application of the Code of Judicial Conduct to specific circumstances confronting or affecting a judge or judicial candidate.

Its opinions are advisory to the inquiring party, to the Judicial Qualifications Commission, and to the judiciary at large.  Conduct that is consistent with an advisory opinion issued by the Committee may be evidence of good faith on the part of the judge, but the Judicial Qualifications Commission is not bound by the interpretive opinions by the Committee.    However, in reviewing the recommendations of the Judicial Qualifications Commission for discipline, the Florida Supreme Court will consider conduct in accordance with a Committee opinion as evidence of good faith.  See Petition of the Committee on Standards of Conduct Governing Judges, 698 So. 2d 834 (Fla. 1997).

The Committee expresses no view on whether any proposed conduct of an inquiring judge is consistent with substantive law which governs any proceeding over which the inquiring judge may preside.  The Committee only has authority to interpret the Code of Judicial Conduct, and therefore its opinions deal only with whether the proposed conduct violates a provision of that Code.

For further information, contact Judge Barbara Lagoa, Chair, Judicial Ethics Advisory Committee, Third District Court of Appeal, 2001 S.W. 117th Avenue, Miami, FL 33175.

Participating Members:
Judge Roberto Arias, Judge Nina Ashenafi-Richardson, Judge Robert T. Benton, II, Dean Bunch, Esquire, Judge Lisa Davidson, Judge Miguel de la O, Judge Jack Espinosa, Jr., Judge Barbara Lagoa, Judge Spencer D. Levine, Patricia E. Lowry, Esquire, Judge Michael Raiden, Judge Richard R. Townsend.


Copies furnished to:
Inquiring judge (Name of the Inquiring Judge deleted)
Justice Charles T. Canady, Justice Liaison
John A Tomasino, Clerk of Supreme Court
All Committee Members
Executive Director of the Judicial Qualifications Committee
Office of the State Courts Administrator