Recently, there has been an increase in the number of gift-giving or reward programs offered to attorneys and their staff for scheduling depositions with a particular court reporting agency. The gifts clearly are made in order to influence the selection of court reporting agencies when scheduling depositions. There is an ongoing debate among court reporters whether this practice is ethical and whether it begins to erode the industries’ reputation for operating with high integrity.
Taking a look at the question from the vantage point of a law firm and its staff, receiving these gifts and rebates presents several ethical questions. Let’s say a client brings a large case to your office. Your assistant is offered gifts, such as $25 gas cards, a $250 shopping spree, maybe even an iPad if your office books the depositions with a particular court reporting firm.
- Who does the gift belong to?
- Should your client be entitled to a reduction in fees to reflect the cost of the gift, or entitled to the gift itself?
- How do you know that your client is not overpaying for the reporting fees that cover this marketing practice?
- How do you know if your firm is overpaying for transcripts to cover the cost of these reporting rewards programs?
What does the ABA think is ethical?
Someone pays for those enticing gifts, kickbacks and rebates. And the consumer, including the lawyer, is unprotected from the loss without even knowing it. The American Bar Association, in its published Opinion 278, states that a lawyer should not accept a gratuity from anyone without the client’s consent and that the gratuity belongs to the client.
What does NCRA think is ethical?
The National Court Reporters Association has come out with an opinion on the ethics of such activities from the viewpoint of the court reporter in its “Ethics First” campaign. In 1993, NCRA adopted as part of its Code of Professional Ethics a policy that prohibits giving excessive gifts to attorneys, clients, witnesses, insurance companies, or other persons or entities associated with the litigation. The original policy set a limit of up to $25 in value per occurrence and $50 in aggregate per person per year. The limit later was set at $100 per recipient per year.
The policy was established because the NCRA Board of Directors believed that the practice of providing gifts, rewards, or incentives to attorneys, clients or their representatives or agents undermines and dilutes the integrity of the reporting profession and the status of the reporter as a neutral and impartial officer of the court. Giving excessive gifts and incentives can create, in the eye of the public, the appearance of partiality or favoritism on the part of the reporter towards the recipient.
The Board of Directors in 2008 asked the Committee on Professional Ethics to review the policy. As a result of that process, the association’s policy on gift giving was reaffirmed, and COPE Advisory Opinion No. 45 was issued to clarify the policy. In 2011, at COPE’s recommendation, the policy on gift giving has been revised to prohibit all gifts, regardless of their value, given as an incentive for future work.
What Constitutes a Gift?
To further define its position, NCRA recognizes that gifts of nominal value, such as pens, pencils, coffee mugs and other advertising paraphernalia or modest forms of meals and entertainment do not compromise the reporter or firm’s appearance of impartiality and are permissible. However, NCRA has now chosen to distinguish gifts that are for marketing purposes or to thank clients for past work versus gifts that are given in exchange for future work.
The amount of a gift is measured by its retail or fair market value, that is, what the recipient would reasonably expect to pay if they were to purchase the gift for themselves from generally accessible sources. The actual cost incurred by the firm or individual providing the gift is irrelevant.
What can be done about it?
NCRA also provides a complaint process for allegations of violations. The NCRA Committee on Professional Ethics may issue a written decision. It may issue a cautionary letter, warning or statement of advice, require remedial ethics training, order that the member be reprimanded, or determine that the member be suspended or expelled from the Association, depending upon the severity of the violation, prior history and other relevant circumstances. If a Member resigns from NCRA while a complaint is pending, COPE will still complete its determination of the matter.
The next time your firm or staff are offered an incentive in return for your repeat scheduling of depositions, stop and evaluate the practice. Is the value of the item too high? Would it need to be declared as income on your taxes? Should the gift be forwarded to your client, or simply refused by your firm? For attorneys and law firms, it would be a good idea to formulate a policy on such practices before they arise.
Most reporters understand their role in the legal system requires neutrality and impartiality. Offering incentives with high dollar values could begin to chip away at that reputation of ethical behavior that court reporters earn through fair practices. At O’Brien and Bails, we do not offer incentive gifts to capture more business.
For more on court reporting ethics from our perspective, download this free report: “Thoughts on Court Reporter Ethics: From a Court Reporting Firm Owner”.