This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on September 1, 2000, basing its approval solely on the facts and circumstances stated herein.

May the attorney for a board of trustees of a public school district and/or the attorney's law firm perform legal services and be compensated for same by the school district by way of a single contract that pays the individual attorney a monthly retainer and pays for additional legal services at specified rates when performed by the individual attorney or the law firm?

State law restricts the Mississippi Ethics Commission to interpreting and issuing opinions on Sections 25-4-101 through 25-4-119, 1972 Mississippi Code Annotated and Article IV, Section 109, Mississippi Constitution of 1890. Therefore, this opinion does not address the Mississippi laws outside the Commission's jurisdiction nor the governmental entity's internal rules and regulations.

The pertinent conflict of interest laws to be considered here are:

Code Section 25-4-103(c), (e), (f)(i)(ii), (g)(iii), (h), (k)(i)(ii) and (p)(i)(ii)(iii) states:

"(c) 'Business' means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, holding company, self-employed individual, joint stock company, receivership, trust or other legal entity or undertaking organized for economic gain, a nonprofit corporation or other such entity, association or organization receiving public funds.

(e) 'Compensation' mean money or thing of value received, or to be received, from any person for services rendered.

(f) 'Contract' means:

(i) Any agreement to which the government is a party; or

(ii) Any agreement on behalf of the government which involves the payment of public funds.

(g) 'Governmental' means the state and all political entities thereof, both collectively and separately, including but not limited to:

(iii) All school districts.

(h) 'Governmental entity' means the state, a county, a municipality or any other separate political subdivision authorized by law to exercise a part of the sovereign power of the state.

(k) 'Material financial interest' means a personal and pecuniary interest, direct or indirect, accruing to a public servant or spouse, either individually or in combination with each other. Notwithstanding the foregoing, the following shall not be deemed to be a material financial interest with respect to a business with which a public servant may be associated:

(i) Ownership of any interest of less than ten percent (10%) in a business where the aggregate annual net income to the public servant therefrom is less than One Thousand Dollars ($1,000.00);

(ii) Ownership of any interest of less than two percent (2%) in a business where the aggregate annual net income to the public servant therefrom is less than Five Thousand Dollars ($5,000.00).

(p) 'Public servant' means:

(i) Any elected or appointed official of the government;

(ii) Any officer, director, commissioner, supervisor, chief, head, agent or employee of the government or any agency thereof, or of any public entity created by or under the laws of the State of Mississippi or created by an agency or governmental entity thereof, any of which is funded by public funds or which expends, authorizes or recommends the use of public funds; or

(iii) Any individual who receives a salary, per diem or expenses paid in whole or in part out of funds authorized to be expended by the government."

Code Section 25-4-105(3)(a) states:

"(3) No public servant shall:

(a) Be a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent, other than in his contract of employment, or have a material financial interest in any business which is a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent."

Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.

Please be advised that the undersigned is an attorney who represents a public school district in Mississippi. Under the terms of an agreement of long standing with the school district, the attorney individually receives a monthly retainer of $400 per month for which the attorney is required to attend the monthly board meetings, review the minutes and answer routine telephone inquiries from the school district administrative staff and prepare and file answers to all garnishments received by the District on all its employees. The school district withholds the required contribution to the State Retirement Service from the monthly retainers. The agreement further provides other services requested by the school district shall be performed on an as needed basis for specified rates depending on the type of service being performed and billed by the law firm with which the attorney is associated.

My question is whether there is an ethical or conflict of interest problem with the Board of Trustees of a public school district entering into an agreement to pay an individual attorney a monthly retainer to cover certain legal services and for that agreement to further provide that additional legal services which are performed by the attorney or his associates will be billed by the law firm with which the attorney is associated.

Based solely on the facts and circumstances presented by the requestor, the Commission's opinion is as follows.

This opinion is written with the understanding that the professional rules governing attorneys consider any contract to represent a client held by one member of a law firm is actually held by the law firm. A law firm's partner cannot hold himself apart from the firm to represent one or more clients. This understanding is consistent with opinions of the Mississippi State Bar.

Section 37-7-301(x), 1972 Mississippi Code Annotated (amended), provides that the school boards of all school districts have the power "to employ and fix the duties and compensation of such legal counsel as deemed necessary."

An attorney for a board of trustees of a public school district who is paid a monthly retainer from which the school district withholds state retirement contributions is a "public servant" of the school district for purposes of Code Section 25-4-103(p)(ii)(iii).

Therefore, Code Section 25-4-105(3)(a), cited above, prohibits such an attorney for the board of trustees of a public school district and the attorney's law firm in which he has a material financial interest from being a contractor, subcontractor or vendor with the school district.

In other words, Code Section 25-4-105(3)(a) prohibits such an attorney for the board of trustees of a public school district and the attorney's law firm from having contracts to provide services to the school district other than the single contract "to employ and fix the duties and compensation of such legal counsel as deemed necessary" as authorized by Code Section 37-7-301(x).

However, Code Section 25-4-105(3)(a) will not prohibit an attorney for the board of trustees of a public school district and the attorney's law firm from performing and being compensated for the duties as legal counsel for the school district which are deemed necessary by the board of trustees when such duties and compensation are set forth in a single contract authorized by Code Section 37-7-301(x).
 
 
 
 
 
 

Ronald E. Crowe

Executive Director