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Three bills tossed in the Texas legislative hopper last week seek to resolve the perceived conflict over Texas Supreme Court law clerks accepting high-dollar bonuses from law firms that they have agreed to join after completing their clerkships. SB 1111 by Sen. Chris Harris, R-Arlington, would amend the penal code provision banning gifts to public servants to allow the judicial clerks to accept the bonuses, but would require them to disclose the benefit. The other two bills — SB 1210 by Sen. Royce West, D-Dallas, and HB 2889 by Rep. Jim Dunnam, D-Waco — don’t change the penal code but place restrictions on when the clerks can negotiate for or accept jobs with law firms or other private entities. A clerk who had not accepted an offer from a law firm prior to beginning work at the court would be prohibited from negotiating with a firm until the final three months of the clerkship. (See text and status of the bills at www.capitol.state.tx.us/tlo/billnbr.htm.) The West/Dunnam bills also require a clerk to disclose an employment agreement with a firm and any bonuses accepted. “Conceptually, we think there needs to be some disclosure,” says West, a partner in Robinson, West & Gooden in Dallas. “You shouldn’t be a law clerk for a court working on a particular case for a law firm that you’re going to accept employment from or you have been employed by or that law firm has provided money for your compensation.” The bills by West and Dunnam require a clerk to be recused from any matter before the court that involves the firm. The court would have to issue an order of recusal. In addition, Dunnam’s bill provides for the State Bar of Texas to sanction any lawyer who does not comply with the requirements in the legislation. “If you’re not going to have a stick, then why have a law?” asks Dunnam, a partner in Waco’s Dunnam & Dunnam. The supreme court had suggested that the Legislature allocate an additional $1 million to the court so that the 18 law clerks could be replaced by full-time staff attorneys, who have more experience. “I am not surprised that there is more than one opinion on how to resolve the issue,” says Travis County Attorney Ken Oden, who has been looking into whether the clerkship bonuses violate the law. Some clerks receive bonuses as high $35,000 after they leave the supreme court and join their firms. Hiring partners at some large Texas firms have said the bonuses are meant to offset the significant disparity between the $37,900 the clerks are paid for their one year at the supreme court and the six-figure salaries first-year associates can earn in the private sector. Oden says he’s hopeful that consensus can be reached on a bill that “protects public interest but maximizes chances for public service.” Supreme court Chief Justice Tom Phillips says the court is “neutral” on the proposed legislative fixes for the problem. “We think it’s the Legislature’s call,” Phillips says. “We’re not convinced there’s a problem with anything the law clerks and the law firms have done, but we admit the law is unclear.” According to Phillips, the justices prevent conflicts of interest by keeping law clerks from working on cases in which their future employers have an interest. In January, the court revised its policy to make it clear that the clerks, also known as briefing attorneys, cannot accept bonuses or other benefits from their future employers while still working for the court. ETHICAL DILEMMA Cris Feldman, staff attorney for Texans for Public Justice, alleges the court’s policy is inadequate and that allowing law firms to subsidize court clerks is unethical and illegal. He favors the approach taken by West and Dunnam and says the Harris bill, which would apply to any short-term state employee hired for three years or less, is too broad and would create more problems. “The Harris bill is anti-reform legislation at its best,” Feldman says. “It … opens up the floodgates for abuses at all levels of government, not just the judiciary,” he alleges. If the bill becomes law, Feldman says, it’s possible that legislative aides could be sponsored by Texas utilities, even if the utilities had issues scheduled for consideration by the Legislature. Harris, with Arlington’s Chris Harris & Associates, says his bill would provide safeguards in a situation where there currently are none. “I had no idea we had clerks out there being supplemented by law firms,” he says. Under Harris’ bill, a law clerk would have to file a financial statement with the Texas Ethics Commission. The statement would have to include the name of the private employer who offered the bonus or other benefit, the amount offered and the date it was received or is expected to be received. If there’s disclosure, Harris says, an attorney who has a case before the court can check to see if any clerk working on the case has received or been promised a bonus from a law firm representing the opposing party. “What this bill does is put the burden on the supreme court justices and on the clerks to keep the clerks out,” he says. Harris says a clerk who works on a case in which his future employer is involved could lose his law license and a justice who allows that to happen could face disciplinary action by the State Commission on Judicial Conduct. Feldman supports West’s bill, which he says “is narrowly tailored and promises a clean, open judiciary — something we desperately need.” But Daniel Alexander, who clerks for Supreme Court Justice Craig Enoch, says the West bill doesn’t cure the problem because it leaves the penal code provision intact. Under the bill, law clerks still would be prohibited from accepting bonuses that violate the penal code, he says. “Essentially, it [the West bill] amplifies Chapter 36 of the penal code and makes it even stronger against clerkship bonuses,” says Alexander, who will receive a $10,000 bonus when he joins the Los Angeles firm of O’Melveny & Myers later this year. Dunnam, whose bill closely resembles West’s, says the penal code should not be rewritten to address this problem. “I don’t think it should be legal to accept the bonus. I don’t think it’s ethical,” he says. Dunnam says he doesn’t think the public would find it acceptable if a staff member for a lawmaker on the House State Affairs Committee accepted a pre-signing bonus from a company that had an interest in legislation being considered by that committee. “That would be outrageous,” he adds. But Alexander says that preventing Supreme Court clerks from receiving bonuses will make it virtually impossible for the state’s highest civil court to compete with federal courts for the most talented law school graduates. If a law school graduate has the choice between a clerkship with a bonus and an equally prestigious clerkship without a bonus, simple economics dictate that he take the job that offers the bonus, Alexander says. “Every Texan loses out by not having the highest quality clerks up here,” he says. West says the bill may have to undergo some “tweaking” but that he’s confident a consensus can be reached on the issue. Notes West, “The only thing we’re trying to do is make sure that we have disclosure and that, if indeed a law clerk has accepted employment, that it’s aboveboard and everybody understands exactly what it is.” James Maloney, immediate past hiring partner at Baker Botts in Houston, thinks either approach — the Harris bill or the West/Dunnam bills — would be fine and that some action is needed. “Since the ball is in the air, there needs to be some clarification, whether it comes from the Attorney General’s Office or new legislation,” Maloney says. James Reeder, hiring partner for Vinson & Elkins in Houston, says he has not looked at the bills but that his firm is hopeful there will be some resolution of the issue. V&E recently suspended the practice of giving bonuses to Texas Supreme Court clerks who join the firm. “Something needs to be done,” Reeder says. “We’re not going to reinstate the bonuses until we have a resolution.”

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