Court reporters Clients and Gift Giving? Talking Points

Here are messages for you to share when talking with clients about gift giving:

Similar to attorneys, judges, paralegals, and other legal professions, members of the National Court Reporters Association must abide by a very strict Code of Professional Ethics. One of the most important provisions states that all members must:

“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.”

The purpose of this provision is to avoid the possible appearance of partiality or favoritism on the part of a reporter.

The practice of providing incentive gifts to attorneys, clients, or representatives of clients dilutes the integrity of the legal profession as well as the status of the court reporter as a neutral and impartial officer of the court.

NCRA created the Ethics First program as a positive and proactive effort to encourage court reporters, firms, and the clients that they serve to promote the impartiality and neutrality of the court reporting profession and avoid even the appearance of impropriety concerning inappropriate gift giving.

The American Bar Association has also noted the potential problem with law firms receiving incentive gifts related to litigation. A 1993 ABA formal opinion reads:

“In the absence of disclosure to the contrary… if a lawyer receives a discounted rate from a third-party provider, it would be improper if she did not pass along the benefit of the discount to her client rather than charge the client the full rate and reserve the profit to herself.”

HansonBridgett, a large Northern California law firm, noted that there are implications with any gift giving. They found that firms that do give extravagant gifts need to file 1099 forms to recipients. HansonBrigett concluded:

“Incentives distributed to employees of law firms by Reporting Firms in exchange for bookings are not gifts. These incentives clearly represent income and must be reported by somebody, depending upon who the IRS deems the recipient to be. Aside from the ethical and professional prohibitions against these incentives, both recipients and the Reporting Firms risk potentially serious tax consequences, depending on the value of the incentives.”

Court reporters serve a critical role in maintaining the integrity of the judicial system by serving as an unbiased officer of the court. Incentive gift giving can degrade that neutrality, potentially hurting public faith in America’s judicial norms as well as debasing this time-tested requirement that the court reporter remain impartial to all sides in a proceeding.