Using Judge's Surname in Title of Former Law Firm During Dissolution; Receiving a Share of Fees Collected by Former Firm
March 24, 2008
CJE Opinion No. 2008-2
You have requested advice as to your obligations under the Code of Judicial Conduct as you transition from your private practice to your new judgeship. Specifically, you ask whether it is permissible, in the circumstances described below, for you to permit your former firm to continue using your name in the firm's name as the firm sends bills, collects its remaining outstanding fees, and winds down its business. You also ask if it is permissible for you to continue to receive payments from the firm for your share of the fees as they are collected.
Facts. You were sworn in as a judge just recently. Prior to your appointment, you practiced law with another attorney in a two-person firm. You resigned from the firm when you were appointed to your judgeship, and, contemporaneously, your former partner indicated that she does not intend to continue practicing law. The firm is in the process of closing. Your former partner intends to bill the firm's clients for outstanding fees, and will keep the firm open solely for the purpose of collecting the amounts owed(1) You ask:
- "whether [your former] partner can continue to use [the firm's name, which contains your surname] on letterhead and on bills to those former clients, if she can maintain a bank account in the firm name, and keep the name in the answering machine message now that [you] have been appointed to the bench. In addition, can outdoor signs [with the firm name] remain while she is in the process of winding down the practice. If so, for how long?"
- "whether [you] can receive from [the firm] a share of these payments from former clients for legal work done prior to the time of [your] appointment."
Analysis. An attorney's transition from the practice of law to a judgeship triggers a variety of issues, including, as we have here, issues about withdrawing from a firm and closing one's practice. See C. Gray, Ethical Issues for New Judges at 3-9 (American Judicature Society 1996). Among the cardinal principles is that a judge cannot continue to practice law and must sever ties with his or her former firm. Id. at 8. "As part of that process, a new judge must ensure that his or her name is deleted from the firm name." Id. (citing ethics opinions from other jurisdictions). See also J.J. Alfini, S. Lubet, J.M. Shaman, & C.G. Geyh, Judicial Conduct and Ethics, §7.10A at 7-38 (4th ed. 2007) (stating that judges "must, of course, ensure that their names are removed from firm titles, stationery, and office doors").
These requirements are rooted primarily in Sections 2 B and 4 G of the Code of Judicial Conduct and Rule 7.5 of the Massachusetts Rules of Professional Conduct (2) Cf. CJE Opinion 2003-9 (discussing judge's efforts to persuade former partners to remove his name from firm name); and CJE Opinion 90-1 (advising judge that he had affirmative obligation under Code to notify his former firm that he objected to inclusion of his name and judicial title in section of firm brochure that identified prominent former partners (3)
That said, a critical feature of your situation is that, given your resignation and your former partner's stated intention to discontinue the practice of law, your former firm is now in the process of winding down its business and closing. It remains open for the sole purpose of collecting outstanding fees. No new clients are being accepted and, presumably, no further legal work is being done for existing clients. This significantly reduces any possibility that the firm could gain an advantage of any kind from continued use of your name, and the possibility that the firm could convey, or be perceived as conveying, the impression that it is in a special position to influence you, or other judges, in execution of judicial duties. Having these ameliorating factors in mind, the committee believes that it would not violate the letter or spirit of the Code if you were to acquiesce in your former firm's continued use of your name for a short period while it winds down its affairs. Indeed, to require otherwise would put the firm to the unnecessary expense of changing the firm's name and purchasing new firm stationery and checks solely for the purpose of going out of business.
To ensure that there is no potential for abuse or appearance of any impropriety, the committee conditions its advice as follows:
- You may permit your name to remain in the firm's name for a brief period of time only, as the firm collects the outstanding fees. The committee believes that about four months would be an appropriate period, but this is not an area where there are any hard and fast rules.(4)
- While your former firm may, for the limited purpose of collecting fees and winding down, continue to use stationery and checks containing your name, you should instruct your former partner not to emphasize your judgeship to the former clients when collecting fees, beyond what they may have already been told. It would be appropriate if bills, and correspondence related to bills, indicate only that the firm is winding down and dissolving.
- If current plans change and your former partner remains in business for any purpose (other than to wind down the firm's affairs), you should immediately ask that your name be removed from the firm's name and that the existing stationery, checks, signs, etc. be replaced.
- Likewise, if the collection of fees becomes adversarial at any point, you must then reconsider, in light of the facts as they unfold, whether you can permit the firm to continue using your name in ongoing fee-collection efforts.
Your second question is whether you may accept payments from the firm for your share of the fees as they are collected. It is widely accepted that "[a] new judge may receive legal fees earned by the judge prior to becoming a judge, or a proportionate share of fees earned by a professional association prior to the judge leaving the firm." C. Gray, supra, at 7 (citing opinions from other jurisdictions; noting caveats). See also Annotated Model Code of Judicial Conduct, supra, at 319 ("After leaving a law practice to assume the bench, a judge may accept legal fees for work he or she performed before becoming a judge even if the matter was not completed before that date; stating also that "[t]he fee may be paid to the judge over time as long as it is clear that the judge 'is not sharing in profits of the firm after the judge's departure as distinguished from sharing in an amount representing the fair value of the judge's interest in fees to be collected in the future for work done before leaving the firm'"), quoting from C. Goldstein, "Becoming a Judge: New Judge Must Cut Ties to Former Firm," 6 Judicial Conduct Reporter 1 (Winter 1985). Cf. CJE Opinion 2000-1 (discussing the judge's receipt of payout over time of capital investment in his former firm).
Here, you have already resigned from the firm and will not be billing the clients directly or managing the collection effort yourself. Those things will be done by your former partner. The fees are for work already performed. The amount of the fees is fixed, as is, presumably, the share you are to receive. Contingent fees, which can present special issues, are not involved. Since the firm is dissolving, you will not be sharing in future profits. And because the firm will cease to exist, and your former partner will no longer be practicing law, there is little or no foreseeable danger that you will become entangled in the types of relationships forbidden by Section 4 D(1) or by any other section of the Code.(5)
Conclusion. Subject to the conditions listed above, you may permit your former partner's continued use of the former firm's name while she winds down the firm's affairs and dissolves the business. In these circumstances, you may also receive payments from the firm for your share of the fees received by the firm.
1 Before submitting your request for a formal opinion, you asked the committee for informal advice on the same subject. You indicated at that time that all outstanding fees are for your past services rendered and are determined by a flat fee or hourly rate structure. There are no contingent fees involved. You also indicated that the clients have already been notified that the firm is closing and that arrangements have been made to place the clients with other attorneys.
2 Section 2 B of the Code of Judicial Conduct states in relevant part: "A judge shall not lend the prestige of judicial office to advance the private interests of the judge or others; nor shall a judge convey or permit others to convey the impression that they are in a special position to influence the judge."
Section 4 G states in relevant part: "A judge shall not practice law."
Lastly, Rule 7.5 (c) of the Rules of Professional Conduct states: "The name of a lawyer holding a public office shall not be used in the name of a law firm, or in communications on its behalf, during any substantial period in which the lawyer is not actively and regularly practicing with the firm."
3 In some jurisdictions, a new judge is expressly afforded a grace period in which to continue practicing law after assuming office, for the limited purpose of winding up his or her practice. See Annotated Model Code of Judicial Conduct at 318-319 (American Bar Association 2004). There is no express grace period in Massachusetts.
4 You indicate in your letter that some clients continue to pay the balance of what is owed to the firm in small monthly increments. If the firm intends to continue that practice beyond a brief period, you would be required to ask that the firm remove your name from the firm name and cease using stationery, checks, signs, etc. with the old name.
5 Section 4 D (1) of the Code provides: "A judge shall refrain from financial and business dealings that tend to reflect adversely on the judge's impartiality, that may interfere with the judge's judicial position, that may reasonably be perceived to exploit the judge's judicial position, or that may 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."