Opinion 24-80
May 9, 2024
Digest: A full-time judge who served as guardian for a disabled sibling may retain funds remitted to him/her by a law firm handling the sibling’s social security disability matter, provided the amount (1) is reasonable and (2) does not exceed what a non-judge would receive for the same activity. If a non-judge would not have been compensated by a law firm for non-legal services rendered as a temporary guardian in the context of a social security disability claim, then the judge must return those funds to the law firm.
Rules: MHL 81.23; 22 NYCRR 36.1(b)(2)(i)(a); 100.2; 100.2(A); 100.4(E)(1); 100.4(G); 100.4(H)(1); 100.4(H)(1)(a); Opinion 18-160.
Opinion:
The inquiring full-time judge served as a temporary guardian for a disabled sibling. During that time a law firm retained by the sibling’s spouse or partner successfully pursued a disability claim on behalf of the sibling relying, in part, on the guardianship services provided by the judge. The judge performed no legal work in connection with the claim. However, the firm sent an unsolicited check to the judge categorized by the law firm as a “fee share.” The judge believes that the services that he/she provided to the sibling contributed significantly to the success of the disability claim. The judge has been informed that the money did not come from the amount awarded to the sibling, but rather from the legal fee earned by the law firm.[1] The amount was not discussed ahead of time nor was it expected by the judge. The judge inquires whether it is appropriate to keep the fee.
A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act to promote public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). Full-time judges may receive compensation for permissible extra-judicial activities provided its source does not give the appearance of influencing the performance of judicial duties or otherwise give the appearance of impropriety, and subject to certain limitations (see 22 NYCRR 100.4[H][1]). For example, any compensation received “shall not exceed a reasonable amount nor shall it exceed what a person who is not a judge would receive for the same activity” (22 NYCRR 100.4[H][1][a]).
The crux of the inquiry is the law firm’s compensation of the judge for his/her service as guardian for a second-degree relative.[2] The judge may receive compensation for his/her guardianship and its contribution to the social security disability matter if it is reasonable and does not exceed what a non-judge would receive for the same activity (see 22 NYCRR 100.4[H][1][a]).
It seems highly unusual that a law firm in the context of a social security disability proceeding would compensate a guardian for services rendered when Article 81 of the Mental Hygiene Law makes provision for compensation of temporary and permanent guardians (see MHL 81.23). But whether one precludes the other is a legal question which we cannot answer.
The judge should therefore determine the usual and customary practices for compensating guardians in the context of disability proceedings, including: 1) whether the law firm compensates other, non-judge guardians at all; 2) whether the firm uses “fee shares” to compensate non-judge guardians; and 3) whether the method of determining the amount of the fee share is the same for judges and non-judges. If a non-judge guardian would have received the same compensation as the judge, he/she may retain it. If instead a non-judge guardian would have received less, different, or no compensation, the second prong of the test cannot be satisfied and the judge must return to the law firm the amount he/she was paid.
Should the judge determine that he/she may retain the funds, then he/she may consult the Unified Court System’s Ethics Commission concerning whether and how to report the income under 22 NYCRR Part 40 (www.nycourts.gov/IP/ethics).
[1] Under the social security disability rules, it appears that the cap on the total amount that can be collected as an attorney’s fee is currently $7,200.
[2] Notwithstanding that the law firm calls the payment a “fee share,” a full-time judge clearly cannot participate in providing legal services (see 22 NYCRR 100.4[G]). Conversely, while court rules limit a judge’s ability to serve as a guardian or other fiduciary for a non-relative, even full-time judges may serve as a guardian for a family member (see Opinion 18-160; 22 NYCRR 36.1[b][2][i][a] [court appointment]; 100.4[E][1] [designated by an instrument]).