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Advisory Opinions

Advisory Opinion 46

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Further Guidance on Gift Giving

(2011, Revised 2013)

Statement of Facts

The NCRA Board of Directors has requested that the Committee on Professional Ethics address several fact scenarios involving gift-giving in order to provide guidance to NCRA Members on complying with the new rules. 

Scenario 1

A court reporter makes a presentation at a luncheon put on by the local paralegal association.  The reporter takes business cards from the attendees and at the end of the presentation draws a card and gives a gift certificate valued at $200 to a local spa.  Is this a violation of the gift-giving rules?  Would it make a difference if the value was $150?

Discussion

Provision 8 of the NCRA Code of Professional Ethics provides in part that a Member shall “Refrain from giving, directly or indirectly, any gift or anything of value to attorneys or their staff, other clients or their staff, or any other persons or entities associated with any litigation, which exceeds $150 in the aggregate per recipient each year.   Nothing offered in exchange for future work is permissible, regardless of its value.”

In this situation, COPE determines that this promotion is governed by Provision 8 and therefore the amount of the gift is relevant.  A prize offered in a drawing or game of chance falls under the same $150 limitation as a gift given to an individual.  Therefore, the $200 spa certificate would be a violation because it is greater than $150.

Should the reporter decide to give a gift to each participant, this would also be viewed as a gift for marketing purposes and the $150 in aggregate, per individual, per year limit would apply.  Therefore, they could give a gift to each attendee, but it must not exceed $150 to each attendee.

Scenario 2

This is a variation on Scenario 1 where a reporter offers to its current clients a coffee and muffin breakfast for the firm.  Assuming that the average coffee and muffin breakfast costs $3.00, and they are giving them to the entire office staff of 40 people, have they violated Provision 8 because the total gift to the firm is $120?

Discussion

If it is possible to quantify that the gift is for individual staff – in this case, a cup of coffee and a muffin for each staff person – then COPE has determined that this scenario is not in violation of the Code.  Since it is less than $10, it is a nominal gift to each person and doesn’t count against the $150 limit.  However, something that would be for the whole firm, i.e. a holiday gift basket, COPE would look to the value of the gift basket, which should not exceed $150.

Scenario 3

In the context of marketing court reporting services to a potential new client, the reporter invites an attorney for a cup of coffee at the local coffee shop to discuss the types of services offered by the reporter’s firm.  Is this an incentive gift in return for future work and therefore prohibited?

Discussion

COPE recognizes that court reporters are service providers and although they are held to a high ethical standard, they also must market and promote their services in order to continue to thrive in a competitive business environment.  A prohibited incentive gift is one offered in direct exchange for future work.  So, if a reporter were to make the following offer to an attorney “if you book a deposition with me, I’ll buy you a cup of coffee,” that would be considered an incentive gift and prohibited regardless of the value.  However, to have a meeting to discuss the general use of your firm’s services and buy the attorney coffee during the meeting is considered a nominal gift and not in violation of the Code.  If the meeting were a lunch meeting held in a restaurant or tickets to a sporting event, then the $150 limit would apply.

Charitable Gift Exemption

Scenario 4

A member offers to donate $50 dollars to a local charity in the client’s name for every deposition booked.  Is this a violation of the prohibition on incentive gifts given in direct exchange for future work?

Discussion

Yes, COPE considers a gift to a charity on behalf of a client, when offered in exchange for each deposition booked, to be an incentive gift that is prohibited under Provision 8 of the Code.  Were the scenario to be changed to state that the donation was made as a thank-you gift, then the answer would be that this is permitted, subject to the $150 limit just like any other thank-you gift. 

Scenario 5

A court reporter would like to encourage clients to book jobs online.  So, she offers a $10 gift card for every online booking.  Is this permitted under Provision 8? 

Discussion

Provision 8 of the NCRA Code of Professional Ethics provides in part that a Member shall “Refrain from giving, directly or indirectly, any gift or anything of value to attorneys or their staff, other clients or their staff, or any other persons or entities associated with any litigation, which exceeds $150 in the aggregate per recipient each year.   Nothing offered in exchange for future work is permissible, regardless of its value.”

In this situation, COPE determines that this is an incentive gift and is prohibited by the Code.  The fact that the reporter’s goal is to encourage online booking is irrelevant.  It is a gift “offered in exchange for future work.” 

Scenario 6

This is a variation on Scenario 5 where a reporter wants to solicit opinions on its new website and offers a $10 gift card for completion of an online survey regarding the website.  Is this permissible?

Discussion

Because the offer of a gift card is tied only to completion of the survey and not to booking work, then COPE determined that it is permissible.  However, COPE cautions that the survey must be a meaningful one designed to obtain information useful to the firm’s business operations. 

Scenario 7

A court reporter shares a dinner or attends a sporting event with a client who also happens to be a friend.  The bill for the client's share of the activity is over $150.  The reporter pays for the client.  Is this a violation of Provision 8?  Does the answer differ if each party pays for him or herself?

Discussion

The Committee on Professional Ethics looked to the ethics rules of the Congress to decide this issue.  These rules allow an exception to the general ban on receiving gifts if the recipient of the gift is a personal friend.  COPE has determined that there should be a similar exception under the Code of Professional Ethics.  The Congressional rules recommend that when evaluating if the gift falls under the friend exception, several criteria should be considered.  Most important, has there been history of reciprocal giving of gifts throughout the relationship?  If all gifts have been from the reporter to the client, then most probably the gifts are of a business nature and would fall under Provision 8.  In addition, the committee may also look to whether the reporter paid for the gifts with business funds and took a tax deduction (which is typical of a business expense), or used personal funds (which would be the normal situation with a friend).  Should a complaint be filed against the reporter in this scenario, the reporter may give the Committee such information to support the premise that the gift falls under the friend exception.

If the client and the reporter split the bill, then there has been no gift given and the activity would not fall under Provision 8 of the Code of Professional Ethics.

Conclusion

COPE has attempted in this opinion to address some common scenarios faced by reporters.  This is by no means intended to cover all of the possible examples of advertising, marketing, or thank- you gifts or incentives.  COPE does hope that the rationale applied to these scenarios can be applied to other scenarios and therefore be a guide to members in making gift-giving decisions. 

Nothing in this advisory opinion should be construed as inhibiting or prohibiting discounts to the ultimate consumer of the court reporting services.  However, the provision of anything of value to the attorney, the firm, or a member of the law firm staff involved in booking the court reporting service would constitute a gift.

This opinion should be read in conjunction with Advisory Opinion No. 45.

THIS PUBLIC ADVISORY OPINION REFLECTS THE STATUS OF THE LAW IN MOST JURISDICTIONS.  MEMBERS ARE REQUIRED TO CONFORM TO THE ACCEPTED PRACTICES SET FORTH IN THIS PUBLIC ADVISORY OPINION TO THE EXTENT THAT SUCH PRACTICES ARE CONSISTENT WITH THEIR OWN APPLICABLE STATE AND LOCAL LAWS, RULES AND REGULATIONS.