A new judge should not hear cases involving his former law firm for at least the duration of the practice buyout.

I am an attorney who was elected to the Court of Common Pleas in the past election and will take office in January. I am selling my law practice. What do I need to know and what do I have to do when selling a law practice to a local law firm?

Samuel C. Stretton.

Any lawyer can sell a law practice in Pennsylvania now thanks to the revisions to Pennsylvania Rules of Professional Conduct, Rule 1.17. That rule allows the sale of a law practice, including goodwill, etc. Confidentiality must be maintained, but the rule is fairly straightforward in what one does when they sell a law practice.

There is no prohibition preventing a future judicial officer selling their now-existing law practice. Many times, a lawyer is elected to the judiciary who was a partner in a law firm and his partners buy out that lawyer's share.

The critical thing to remember is if the law firm or lawyer buys a practice from a lawyer who is now becoming a judge, that lawyer or law firm cannot appear or have cases before that judge for a number of years. The judge should not hear cases involving the lawyer or the law firm for at least a duration of the practice buyout including the duration as to the payment of all fees that would be due the judicial officer.

Some lawyers who are becoming judges don't sell their practice, they just refer the clients and take the normal one-third or 40% or whatever is agreed upon referral fee. That could be done now since there is no quantum meruit requirements. Before 1979 when there was a quantum meruit requirement, it would be difficult for a lawyer who is about to be a judge to refer their practice because they couldn't work on the case. For referral fees, the judge certainly is entitled to receive those referral fees while he is a judicial officer. But, again, until all those fees have been paid, the judge cannot hear any case involving that lawyer or their firm to whom the cases were referred. The judge should have a standing order, perhaps with the clerk of court or prothonotary or at least with the judge's staff that anytime that lawyer or the firm has a case involving the judge, even if it's uncontested agreement, the judge should disqualify himself.  That conflict is obvious. The judge has an interest in that law firm doing well, so he or she can receive the payments due on cases referred or payments due on the purchase of the law practice. This is not the situation where there can be a waiver of the conflict or waiver of the disqualification.

Further, for a judge to hear those cases would create the appearance of impropriety or an actual impropriety, which is prohibited by the Rules of Judicial Conduct.

Rule 2.11 of the Code of Judicial Conduct is the disqualification rule. Under Rule 2.11(a), a judge should disqualify himself in any proceeding in which the judge's impartiality might reasonably be questioned. Clearly, a lawyer or law firm who is paying the judge regularly either for the agreed to amounts for the purchase of the judge's practice or referral fees for cases the judge referred to them before they took the bench cannot hear those case since the judge's impartiality might reasonably be questioned.

Once a lawyer becomes a judicial officer (of course, it would not apply to just district judges who are allowed to have a private practice), the judge can no longer refer cases and receive referral fees. If a judge had referred the cases while they were still a lawyer then, of course, the judge can receive the referral fees when they are a judge. But, if the judge gets the case or the case comes to the judge which has a substantial value while they are serving as a judge, the judge cannot then refer the case to another firm and accept and receive a referral agreement. Obviously, they can refer the case, but they just cannot receive a referral fee.  The reason for that is obvious. People will come to judges because of their judicial status. A judge cannot benefit from that once they are a judicial officer. Rule 3.10 of the Code of Judicial Conduct prohibits a judge from practicing law. Again, this does not apply to district judges who have different rules. This rule applies to Common Pleas judges and appellate judges in Pennsylvania. If one can't practice law, they can't refer cases, and expect referral fees.

Also, any judge who is receiving referral fees for cases referred out before or monies for the purchase of their law practice must remember they have reporting requirements. Under Rule 3.15 of the Code of Judicial Conduct, a judge has to report gifts and compensation that exceeds $250. Also, a statement of financial interest must be filed by the judge on a yearly basis.

It is important for judges to carefully follow these procedures. It would be a shame for a lawyer who is now a judicial officer to be disciplined or lose their judicial position because they were careless in reporting and handling the sale of their practice or the referral fees that come in from referring cases before the judge accepted his judicial position. On the other hand, a judge can receive the referral fees as long as the referrals were made prior to taking the judicial office. Judges have to be very careful how these are handled and to file all the reporting requirements.

All judicial fundraising must cease by Dec. 31 of the election year.

I am a newly elected judge. What do I do with my judicial campaign committee now that the race is over?

The Code of Judicial Discipline deals with the campaign committee of every judicial officer under Rule 4.4 of the Code of Judicial Conduct. The judicial candidate is responsible for their campaign committee to ensure it complies with all requirements of the Code of Judicial Conduct. Under Rule 4.4(b)(2), any fundraising for a judicial campaign "shall terminate no later than the last calendar day of the year in which the judicial election is held."

Therefore, a judicial officer through the campaign committee can still seek to raise funds even though the election is completed, but all fundraising must cease by Dec. 31 of the election year. A campaign committee cannot again raise any monies for the judicial officer after that Dec. 31 deadline unless and until the next campaign the judge is running in for their judicial position beginning on the day after the general election of the year before the judicial elections take place.

Obviously, contributions after the judicial election are always the subject of questions and concerns. Clearly, people who are contributing, particularly larger sums of money, to an already elected judicial candidate might have an ulterior motive in mind.

Having said that, the better practice is for a judicial candidate to cease all fundraising after the election unless they have campaign debt that has to be retired. Even then, any substantial large contributions might be rejected.

Also, under the Code of Judicial Conduct, under Rule 2.11, contributions can cause the disqualification of a judge if that firm appears before the judicial officer. Under the rules, there is a rebuttal presumption that there would not be recusal if the contribution is less than $250. But if the contribution is more, there is always an issue. Also, the amount of the contribution will be compared to the total contributions received by the judicial campaign. For instance, if a judge received $500 from a lawyer that may not be the basis of recusal if the judge raised $200,000 or $300,000. But if the judge only raised $2,000 or $3,000 then that $500 might cause the recusal of the judge.

The judge, of course, can keep their campaign committee open after the election, but the judge's committee can't raise any money until there is another judicial election and only after the general election in the year before.

Appearances are always important. Sometimes lawyers and judges in this modern world forget the importance of appearances.

This writer is old enough to remember when the former President Judge of Superior Court, Judge Cirillo, was a young lawyer, he was chastised by several prominent Montgomery County lawyers for helping his father cut hair in his father's barber shop on the weekends when he was a lawyer. He was told in no uncertain terms that would bring disgrace to the bar in Montgomery County. Similarly, this writer can remember a young lawyer being chastised by a Judge in Delaware County for wearing casual clothes and walking into the courthouse to file a pleading in the Office of Judicial Support or perhaps it was called prothonotary in those days.

Although the world is not quite as strict, there is merit to the effect of appearances. Raising money is a necessary evil for a judicial campaign, but every judicial officer should follow very strictly the campaign requirements for a committee raising money and close the committee down as soon as they can. But Dec. 31 of the election year is the absolute deadline.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pennsylvania, 19381.