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Big-dollar bonuses and other benefits that some law firms pay young lawyers who agree to join the firms after completing judicial clerkships pose potential ethical and legal problems, Travis County, Texas, Attorney Ken Oden says. In some instances, individuals who have been accepted as briefing attorneys by the Texas Supreme Court or other courts are receiving thousands of dollars from their future employers — law firms that regularly argue cases before the courts. Justice James Baker, the supreme court’s liaison for the law clerks, says the clerks are “screened” to prevent them from working on cases that involve the firm where they intend to work after leaving the court. Baker says the disciplinary rules for lawyers permit what the court is doing with its clerkship program. But some question whether the court’s law clerks should be receiving benefits from law firms that practice before the court. Oden says there is “honest confusion” within the legal profession on what the legal requirements are and that he intends to consult with the state supreme court’s ethics liaison to try to work out a solution. The solution could be a set of generic guidelines that would be applicable to briefing attorneys for the courts and lawyers who work for prosecutors’ offices or other public agencies, he says. “We’re sitting on a dilemma, and we need to sort it out,” Oden says. But the Travis County attorney isn’t accusing anyone of intentional wrongdoing. “There’s nothing I see in any of this that indicates that any of these young clerks or the law firms or the Supreme Court itself intended to do anything unethical or illegal,” he says. Oden says the dilemma has developed because of the tremendous disparity in salaries that new lawyers receive in the private sector and what they can expect for public service jobs. The base salary for a first-year associate at a major law firm is $115,000, compared to the $36,700 the Supreme Court pays a clerk annually. The situation is made worse by the escalating costs for an education, Oden says, noting that it’s not unusual for a student to be facing more than $50,000 in debt by the time he completes law school. Oden says people are trying innovative ways to maximize the potential of attracting to public service the top young lawyers who, because of financial considerations, are likely to seek jobs in private law firms. He advocates forgiving student loans for law school graduates willing to work in the public sector, but that would require action by Congress. Baker says Oden’s comments about potential problems in the clerkship program don’t make sense to him. “I don’t have any comment because I don’t understand where the county attorney is coming from,” he says. Oden’s concerns focus on provisions in the Penal Code that prohibit public servants from accepting “benefits” from certain sources. One provision prohibits a public servant employed by a court from soliciting, accepting or agreeing to accept “any benefit” from anyone who has an interest in or is likely to have an interest in any matter before the court. A separate provision makes it an offense for a person to offer, confer or agree to confer any benefit on a public servant that he knows that individual is prohibited by law from accepting. In both instances, the offense is a Class A misdemeanor, punishable by up to a year in jail and/or a fine not to exceed $4,000. “There’s a conflict here that might rise to the level of criminal activity, and it needs to be addressed,” says Texans for Public Justice staff attorney Cris Feldman. “Ethics Opinion 425 seems to raise the question.” A Jan. 14 advisory opinion by the Texas Ethics Commission says the Penal Code’s gift restrictions prohibit a law firm from paying severance, moving expenses or other benefits to an associate who has accepted an offer of future employment from the Office of Attorney General. The opinion addressed the Fellows Program, which recruits lawyers from private firms to work at the OAG for at least two years. Feldman also questions the inherent conflicts of the practice of allowing law firms to pay bonuses to clerks who plan to work for the firms after leaving the courts. “This is creating a public-private creature rather than a true public servant,” he says. Baker says Texas supreme court justices usually accept students for the one-year clerkship positions during the spring semester of their second year in law school. A clerk begins working for a justice after graduating and taking the bar exam. Karen Lundquist, general counsel for the Ethics Commission, says the law defines a clerk as a public servant when he is selected for the job, even if he hasn’t assumed his duties. Lundquist says she also sees “some potential problems” with law firms providing benefits to judicial clerks who will go to work for the firms after their clerkships. PENAL CODE PROBLEMS? James Reeder, hiring partner for Vinson & Elkins in Houston, says his firm typically makes offers to law school students at the beginning of their third year, although some judges prohibit their clerks from accepting a firm’s offer until after the clerkship is completed. Reeder says V&E pays an $8,000 signing bonus to every student who accepts its offer, including those who will serve clerkships before joining the firm, and also pays for the course they study to take the bar exam. New lawyers who have worked as clerks receive a $35,000 bonus when they go to work for V&E, he says. “We’re trying to encourage talented law students to serve the judiciary,” Reeder says. “If we need to rethink the situation, we certainly will.” Baker Botts partner James Maloney in Houston says his firm pays a $5,500 acceptance bonus and a $5,000 graduation bonus to all lawyers who accept its offer. Those who have worked as clerks receive an additional $35,000, which is meant to offset the significant disparity in pay for first-year associates and lawyers in the public sector, he says. “We think it’s a valuable experience for a young lawyer to have,” Maloney says of the clerkships. Other law firms that were not interviewed for this article also pay bonuses. Lundquist says the transactions can be structured so that they don’t present Penal Code problems. One exception under the law is a benefit given because of a business relationship independent of an individual official’s status. “If it’s not given because of your capacity as a public servant, it’s probably OK,” Lundquist says. Austin criminal-defense lawyer Keith Hampton disagrees. “Nowhere else in criminal law would anybody suggest that a penal statute could be so easily sidestepped or circumvented by the utterance of magic words by the parties the Penal Code intends regulating,” Hampton says. “I can’t believe the legislature intended that.” U.S. District Judge Sam Sparks of Austin says he prefers that his law clerks don’t begin interviews with law firms until the last six months of a two-year clerkship. Sparks says the clerks do not accept any kind of remuneration until their last two weeks with his court and that money usually is used to pay moving expenses. “They ask me and I say, ‘Take it because you’re not doing anything anyway,’ ” he says. U.S. District Judge Vanessa Gilmore of Houston says she doesn’t allow her clerks to accept money from the law firms while still working for her court. They can accept bonuses after they’ve completed their two-year clerkships but “not ahead of time,” Gilmore says. Other states have wrestled with the problem of what law clerks employed by a court can accept from a law firm where they intend to work. In a May 3 opinion, the Judicial Ethics Advisory Committee of the Arizona Supreme Court concluded that an appellate law clerk cannot be employed by a law firm while working at the court or accept payment of bar dues by the firm. The opinion also said a clerk can’t accept payment of bar dues after a clerkship ends, unless the firm has a policy of reimbursing all new law school graduates hired as associates for bar dues expenses incurred between the time they join the bar and start work at the firm. The judge for whom the clerk works is required by the Code of Conduct for Judicial Employees in Arizona to direct the law clerk not to accept the payment, the committee concluded.

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