Participation in a Publishing Business
March 3, 1993
CJE Opinion No. 93-1
You have requested the advice of this Committee about two questions: 1) the propriety of your participation in the family-owned publishing company as a writer, editor, or consultant on the law-related monthly bulletins published by the family companies; and 2) the permissibility of payment by the company through the payroll so that you would be eligible to participate in the business' profit-sharing plan.
Addressing question one first, we should state at the outset that since we do not know all the details of your proposed connection with the publishing company, we can only state the general principles we deem applicable, leaving you to fit them to the facts. As you note, the relevant canons are Canons 4, 5(C)(2), and 6. Canon 4 states that "[a] judge, subject to the proper performance of [her] judicial duties, may . . . if in doing so [she] does not cast doubt on [her] capacity to decide impartially . . . write . . . and participate in other activities concerning the law." Canon 5(C)(2), however, states that a judge should not serve as an "officer, director, manager, advisor, or employee of any business." Finally, Canon 6 states that "[a] judge may receive compensation . . . for the . . . extra-judicial activities permitted by this Code, if the source of such payments does not give . . . the appearance of impropriety . . . ." and adds that compensation "should not exceed a reasonable amount nor should it exceed what a person who is not a judge would receive for the same activity."
These rules state the bounds of what is permissible in this situation. We read Canon 4(A) as permitting lawyers to engage in writing, lecturing, and other extrajudicial activities that are related to their professional competence. Canon 5 also permits writing, lecturing, teaching, and speaking on nonlegal subjects. Canon 6 permits compensation to be paid for such activities on certain conditions and subject also to the restriction in Canon 5(C)(2) that the activities do not in fact make the lawyer an employee of a business enterprise. We think that the purpose of the restriction is to emphasize the ad hoc quality of the extrajudicial activity, especially where a business is concerned.
In that regard, we note that the Federal Advisory Committee decided that a judge who advised a former client on business matters for four or five hours a month and was paid $200 per month fell within the ban of serving as an "employee" of a for-profit corporation. Advisory Opinion No. 23 (1971). It may well be that additional, or even better, grounds for such a conclusion today would be that the judge was engaging in the practice of law or possibly that giving business advice as a paid consultant did not fall within the extrajudicial activities permitted by Canons 4 and 5. We need not decide that case. We mention it because it indicates the stringent attitude taken by the Federal Advisory Committee toward extrajudicial activities in the business context.
Your inquiry is somewhat different because at least some of the activity you propose, writing on law-related subjects, is expressly permitted by Canon 4. Under the rules, you may engage in writing for your family's law-related bulletins so long as it does not interfere with your judicial duties, so long as you are paid no more than a stranger to the family would be paid for performing such activities, and so long as the scope of the work is sufficiently part-time and circumscribed so as to permit you to be classified as a nonemployee. We suggest that because this is a family business and hence not subject to ordinary market constraints, you should be especially careful that the fees you receive do not create the appearance of impropriety in this regard.
You also suggest that you wish to do editing and consulting and to participate in, and be paid for, "family matters relating to the business." We assume that the editing would consist primarily of skilled professional work on the law-related bulletin, and we would therefore assimilate it to the "writing" that we have just discussed. We do not know what kinds of activities are contemplated under the headings of consulting and participating in family matters relating to the business and we therefore express no opinion as to their permissibility. Conceivably, the former might be assimilable to the writing and editing. Conceivably, the latter might get you into the delicate area dealt with in Advisory Opinion 23, but we do not have enough information to say.
In response to your second question, while the mechanics of payment - lump sum or periodic payments - may not be critical, payment of the benefits received by regular employees seems problematic in that it suggests the status of employee, which Canon 5(C)(2) forbids.