   Application of 18 U.S.C. § 203 to Maintenance of Contingent
    Interest in Expenses Recoverable in Litigation Against the
                          United States
18 U.S.C. § 2 0 3 does not prohibit a prospective governm ent officer from m aintaining upon his entry
   into governm ent service a contingent interest in expenses recoverable in litigation involving the
   United States.

                                                                                                   January 28, 1998

                  M e m o r a n d u m O p in io n f o r t h e C o u n s e l t o t h e P r e s i d e n t


   This memorandum responds to your request for our opinion whether 18 U.S.C.
§203 prohibits a prospective government officer from maintaining a contingent
interest in expenses recoverable in litigation involving the United States.* For
the reasons set forth below, we conclude that § 203 would not prohibit the prospec­
tive officer from maintaining such an interest upon his entry into government
service.

                                                 I. Background

   The prospective officer’s law firm represents plaintiffs on a contingency basis
in a product liability suit against a corporation that petitioned for bankruptcy in
May 1995, and the firm has continued to represent its clients in the bankruptcy
proceeding. The law firm has advanced certain litigation expenses on behalf of
its clients, making payments to cover, among other things, court costs, costs of
medical examinations, telephone and facsimile charges, and deposition reporting
costs. If the law firm’s clients secure damages against the corporation, the firm
will deduct these expenses from the award and receive a percentage of the
remainder as a fee. It is not likely that the firm will recover its expenses before
the prospective officer’s projected entry into government service.
   Section 203 of title 18 generally prohibits a federal officer or employee from
receiving “ compensation for any representational services,” rendered “ personally
or by another” before a court or agency during the officer’s or employee’s govern­
ment tenure, in connection with any proceeding in which the United States is
a party or has a direct and substantial interest.1 The United States is one of the

   ♦Editor’s Note: For privacy reasons, material has been redacted from this opinion that might identify the prospec­
tive government officer.
   1 In pertinent part, §203 provides1
         (a) W hoever, otherwise than as provided by law for the proper discharge of official duties, directly
      or indirectly—
            (1) .    receives . . . any compensation for any representational services, as agent or attorney or
         otherwise, rendered or to be rendered either personally or by another—

                                                                                                           Continued


                                                            1
                             Opinions of the Office o f Legal Counsel in Volume 22


defendant corporation’s creditors and is therefore a participant in the bankruptcy
proceeding in which the law firm maintains a contingent interest. It has been the
longstanding view of the Office of Legal Counsel that § 203 prohibits an indi­
vidual entering government employment from maintaining a contingent interest
in fees recoverable in a proceeding involving the United States.2 The prospective
government officer therefore proposes, upon entering government service, to dis­
associate himself from the litigation and to forfeit any entitlement to his share
of fe e s contingent upon the plaintiffs’ recovery. He would, however, retain an
interest in his share of any repayment of expenses advanced, prior to his entry
into government service, on behalf of the firm ’s clients. The question presented
is whether § 203 prohibits the prospective officer from maintaining such an
interest.

                                                 II. Discussion

                                                          A.

   The starting point in assessing § 203’s reach is, of course, the text of the statute
itself. See United States v. Ron P a ir Enters., 489 U.S. 235, 241 (1989). To deter­
mine whether §203 prohibits this individual from retaining a contingent interest
in the recovery of expenses, we must ask whether the payments that he would
receive in the event that his clients recover damages are properly characterized
as “ compensation for . . . representational services.” The term “ compensation”
is not defined in §203 or related provisions of the federal criminal code, nor
has any court considered, within the specific context of a prosecution under § 203

             (B) at a time when such person is an officer or employee . . of the United States in the executive,
             legislative, or judicial branch of the G overnment, or in any agency of the United States,
       in relation to any proceeding . . or other particular matter in which the United States is a party or
       has a direct and substantial interest, before any department, agency, court, court-martial, officer, or any
       civil, military, or naval commission,

       shall be subject to the penalties set forth in section 216 o f this title.
 18 U.S.C. §203(a) (1994)
    2See, e.g., M emorandum for Files from Sol Lindenbaum, Re- Application o f 18 U.S.C §203, at 1 (Dec. 16,
 1980); M emorandum for Edwin L. Weisl, J r , Assistant Attorney General, Land and Natural Resources Division,
from Frank M. W ozencraft, Assistant Attorney G eneral, Office o f Legal Counsel, Re- Interest o f U S Attorney in
Condemnation Suit — D .J No. 33-36-650-2, C ivil No. C-7779, Columbus, Ohio at 1 (Nov. 9, 1966), Letter for
Hon. Edward W einberg, Deputy Solicitor, Department of the Interior, from Norbert A Schlei, Assistant Attorney
General, O ffice o f Legal Counsel (July 24, 1963); c f Acceptance o f Legal Fees by United States Attorney, 6 Op
O L C . 602 (1 9 8 2 )
    A lthough the rationale underlying this longstanding interpretation has never been articulated with clarity, the
interpretation is consistent with a view of §203 as primarily seeking to prevent the actual or apparent influence
o f an officer or em ployee over a proceeding involving the government by virtue of the individual’s pecuniary interest
in the proceeding’s outcome See infra pp 4 -6 A rule against retaining a contingent interest in fees reflects that
a contingent fee covers the entire representation up to the payment, the amount remains uncertain until then, and
the fee thus compensates, in part, for representational services performed after the employee began working for
the United States. We need not address that interpretation here because it simply does not apply to reimbursement
for already identified expenses, as we conclude below , payments offsetting expenses are not properly characterized
as compensation for representational services


                                                          2
   Application o f 18 U.S.C. § 203 to Maintenance o f Contingent Interest in Expenses Recoverable in
                                   Litigation Against the United States

or its predecessors, whether a client’s reimbursement of expenses can constitute
“ compensation.” The term “ varies in its meaning depending on the words and
the subject matter in connection with which it is used.” 15A C.J.S. Compensation
101 (1967 & Supp. 1997). Here, Congress used “ compensation” in connection
with the qualifying phrase “ for . . . representational services.” The phrase is
significant in two respects. First, in light of the focus on “ services,” the most
natural reading of §203 is that Congress intended to limit the statute’s coverage
to those forms of payment typically associated with the performance of personal
services, such as fees, wages, salary, or commissions. Second, the use of the word
“ for” makes clear that §203 embodies an element of exchange. Section 203 does
not prohibit all compensation to a government officer or employee; rather, it tar­
gets compensation that the officer or employee receives in exchange fo r represen­
tational services rendered personally or by another. Put another way, the fact that
a government officer or employee receives a monetary payment or something else
of value will not alone trigger a violation of §203. Nor is it sufficient that an
officer or employee receives something of value because a representational service
occurred during his or her government tenure. The provision requires that the
officer or employee receive something of value in exchange fo r the representa­
tional services performed on the cUent’s behalf during the officer’s or employee’s
government tenure.
   Because § 203 covers only payments received in exchange for representational
services, it does not reach an officer’s or employee’s recovery of expenses
advanced on a contingency basis on behalf of a client.3 If litigation efforts on
behalf of the prospective officer’s clients prove successful, he will receive some­
thing of value: he will recoup costs that he otherwise would have been required
to absorb. Nevertheless, the payments in question will not take a form typically
associated with the performance of personal services, nor will they have been
made in exchange for any representational services. It is true that the officer will
receive payment only because another attorney performs the representational serv­
ices that ultimately enable his clients to recover damages. It is also likely that
the prospective officer or another attorney performed representational services
while disbursing the funds for which he now seeks repayment. For example, a
firm-that advances funds to a third party or that pays court costs on a client’s
behalf is in fact performing representational services such as securing the appear­
ance of a third party as a witness or ensuring that the client’s action proceeds
in the proper forum. It does not follow, however, that the recovery of expenses
is properly characterized as a payment made fo r representational services. An

   3 Because this prospective officer is an attorney, our discussion necessarily focuses on the application of §203
to attorneys’ fee arrangements. Section 203, however, extends to one who “ demands, seeks, receives, accepts, or
agrees to receive or accept” compensation for representational services, “as agent or attorney or otherw ise." 18
U.S.C. § 203(a)(1) (emphasis added) We believe that our analysis would apply equally to non-attorneys who provide
representational services, such as consultants and experts in engineering, accounting, and similar professional fields.
As we discuss, §203 would not extend to a contingent interest in the recovery of items billed in good faith as
expenses.


                                                         3
                            Opinions of the Office o f Legal Counsel in Volume 22


attorney who arranges for the appearance of a witness or who pays court costs
ordinarily receives a fee for performing these representational services, whether
in the form of a fixed hourly rate or a contingent interest in the outcome of the
case. Above that fee, the attorney also seeks reimbursement for the actual outlay
of funds to the witness or the court on the client’s behalf. Thus, an attorney who
disburses funds on a client’s behalf receives both a payment for performing rep­
resentational services— namely, any services connected with the disbursement —
and a payment to offset the disbursement itself. In this example, the acts of
arranging for testimony and even of disbursing funds would be “ representational
services,” so that the fee paid in exchange for these acts could properly be viewed
as “ compensation” for “ representational services” within the meaning of §203.
In contrast, although the occasion for the reimbursement for expenses arises only
because the attorney (or another) performed representational services, the
reimbursement itself would be insufficient to trigger § 203. Section 203 targets
only those payments made in exchange for representational services, not those
made simply because representational services occurred.4 Accordingly, the most
natural reading of the language o f §203 suggests that Congress did not intend
to prohibit an officer or employee from recovering expenses advanced on a contin­
gency basis on behalf of a client.

                                                         B.

   We must look not only to the language of §203, but also “ to the design of
the statute as a whole and to its object and policy.” Crandon v. United States,
494 U.S. 152, 158 (1990). Where a criminal statute is involved, however, “ it
is rare that legislative history or statutory policies will support a construction of
a statute broader than that clearly warranted by the text.” Id. at 160. We conclude
that although the history and purpose of § 203 provide some support for a broad
reading of the statute, we are not faced with the sort of rare circumstance in which
general policy concerns can trump the statutory text.
   Section 203 was among several provisions addressing bribery, graft, and con­
flicts of interest revised by Congress in 1962. Act of Oct. 23, 1962, Pub. L. No.
87-849, 76 Stat. 1119, 1121.5 Section 203 differed from its predecessor, 18 U.S.C.
§281, principally in targeting payments for representational services performed
   4 In some circumstances, an attorney may advance funds to pay the fee of a witness or consultant who performs
services on a client’s behalf. Some o f the third p a rty ’s services may be “ representational” in nature Nevertheless,
the attorney who is reimbursed for the funds advanced is not “ compensated” for “ representational services” It
is the third party who receives compensation for those services that he or she performed on the client’s behalf.
The attorney’s nght to reimbursement arises not from the fact that the third party has performed representational
services, but from the fact that the attorney has satisfied the client’s obligation to fund those services in the first
instance.
   5Section 203 was designed to “ exten[d] and c larifly j” its immediate predecessor, 18 U .S C §281 (1956) H R.
Rep. No 87-748, at 19 (1961). As enacted, §203 did not prohibit compensation for services rendered in courts
Congress expanded the range o f proceedings covered by §203 in 1989 Ethics Reform Act of 1989, Pub L. No
101-194, §402(1), 103 Stat 1748


                                                          4
  Application o f 18 U.S.C. §203 to Maintenance o f Contingent Interest in Expenses Recoverable in
                                Litigation Against the United States

on behalf of a client during an employee’s government tenure (without regard
for the timing of the payment), rather than targeting payments received during
an employee’s government tenure (without regard for the timing of the services).
Leaving aside this shift in the timing of activities that §203 covers, the core
prohibition on an employee’s receipt of compensation in connection with pro­
ceedings involving the government has remained largely intact since it was first
enacted in 1864. The Act of 1864 prohibited a Member of Congress or an execu­
tive officer or employee from receiving “ any compensation whatsoever, directly
or indirectly, for any services rendered . . . either by himself or another, in rela­
tion to any proceeding . . . in which the United States is a party, or directly
or indirectly interested, before any department, court-martial, bureau, officer, or
any civil, military, or naval commission whatever.” Act of June 11, 1864, ch.
119, 13 Stat. 123 ( “ 1864 Act” ).6 The statute was the last in a series of four
mid-nineteenth century statutes designed to address abuses of public office. See
generally Association of the Bar of the City of New York, Conflict o f Interest
and Federal Service 31-36 (1960). In an extensive review of existing conflict
of interest statutes undertaken in 1956, this Office examined the debates preceding
the 1864 Act and identified two principal purposes for its passage. Memorandum
for the Attorney General, from Frederick W. Ford, Acting Assistant Attorney Gen­
eral, Office of Legal Counsel, Re: Conflict o f Interest Statutes app. at 4—14 (Dec.
 10, 1956), reprinted in Federal Conflict o f Interest Legislation: Hearings on H.R.
1900, Before the Antitrust Subcomm. o f the House Comm, on the Judiciary, 86th
Cong., 619, 624-34 (1960) ( “ Hearings ” ). First, Congress sought to prevent “ the
exercise or abuse of official influence on the part of Government officials with
respect to matters before Government departments, agencies or officers in which
the United States is interested.” Id. app. at 13, reprinted in Hearings at 633.
Second, Congress sought to encourage officers of the government ‘ ‘to devote their
full time to the government duties for which they were paid” and to remain unbi­
ased in the discharge of those duties. Id.; see id. app. at 7, reprinted in Hearings
at 627.
   The 1864 Act’s sponsors were concerned not only that public officials would
actively seek to affect the result of a particular proceeding, but also that an indi­
vidual could influence the proceeding’s outcome merely by virtue of his or her
status as a public official. As originally proposed, the provision barring the receipt
of compensation during government service would have applied only to Members
of Congress. See id. app. at 4—5, reprinted in Hearings at 624-25. The concern
over the possibility of influence in matters involving the government emerged
most clearly in debates over whether Congress should include proceedings before
courts-martial among those proceedings in which its Members could not perform

   6 With the 1909 revision o f the criminal code, Congress extended the provision to apply to Members o f Congress
from the time o f their election. Act of March 4, 1909, ch 321, sec. 113, 35 Stat 1088, 1109. A 1940 amendment
exempted retired officers o f the armed forces Act of Oct. 8, 1940, ch 761, 54 Stat. 1021 Congress redesignated
the provision as 18 U.S.C §281, section 203’s immediate predecessor, in its 1948 revision of the criminal code


                                                       5
                    Opinions of the Office o f Legal Counsel in Volume   22

services for compensation. See id. app. at 7-8, reprinted in Hearings at 627-
28. Proponents of an amendment, ultimately adopted, to include proceedings
before courts-martial noted in particular that the promotions of military officers
sitting on a court-martial would depend on Senate action, and that Senators
appearing before such officers could therefore exercise “ undue and improper
influence” over their decisions. Id. app. at 8, reprinted in Hearings at 628.
Although Congress was primarily concerned with securing the integrity of depart­
mental and other proceedings against the influence of its own Members— “ whose
favor may have much to do with the appointment to, or retention in, public posi­
tion” of the government officials conducting those proceedings, Burton v. United
States, 202 U.S. 344, 368 (1906)— Congress nevertheless extended the Act’s
prohibition on the receipt of private compensation during government service to
all federal officers and employees.
   To the extent that § 203 and its predecessors were designed to guard against
the influence— actual or apparent— of government officials or employees in pro­
ceedings involving the government, or to guard against bias on the part of an
officer with a direct interest in such a proceeding, it is possible to argue that
the statute should reach a contingent interest in repayment of expenses as well
as a contingent interest in repayment of fees. After all, whether an official’s
interest is one in expenses or fees does not alter the official’s incentive to influ­
ence the outcome of a proceeding, the danger that an adjudicator would be affected
by the knowledge that the official possesses an interest in the proceeding’s out­
come, or the possibility that the interest would cause the official to be biased
in other government matters. At the same time, it is equally possible to argue
that if the purposes alone are considered, then § 203 is far too broad, in that it
reaches the interests of officials and employees who are unlikely to be in a posi­
tion to exert influence over proceedings involving the government even if they
have an incentive to do so. The purpose of § 203 and the language used to effect
that purpose thus are not perfectly matched. It is for Congress to assess whether
its purpose would be better served by a legislative extension of § 203 beyond
compensation for representational services. We are not free to interpret § 203 with­
out regard for its textual boundaries. “ [Bjecause of the seriousness of criminal
penalties, and because criminal punishment usually represents the moral con­
demnation o f the community, legislatures . . . should define criminal activity.”
United States v. Bass, 404 U.S. 336, 348 (1971).
   Indeed, although the general purpose of § 203 and its predecessors might support
 similar treatment of contingent fees and contingent expenses, the historically dif­
feren t treatment of these two categories under professional ethics guidelines sup­
 ports the conclusion that § 203, as presently drafted, reaches the former but not
the latter. Before Congress’s 1962 revision of the conflict-of-interest laws, §203’s
predecessor, §281, had been applied to restrict employees entering government
 service from receiving payments on contingent fee arrangements. In enacting

                                             6
   Application o f 18 U.S.C. §203 to Maintenance o f Contingent Interest in Expenses Recoverable in
                                  Litigation Against the United States

§203, Congress corrected one of § 281 ’s perceived defects—namely, its coverage
of payments for services wholly completed prior to the employee’s entry into
government service. See H.R. Rep. No. 87-748, at 9, 20 (1961); Staff of
Subcomm. No. 5 of the House Comm, on the Judiciary, 85th Cong., Federal Con­
flict of Interest Legislation, pts. I and II, at 49 (Comm. Print 1958) ( “ Staff Report
pts. I and II” ). This Office has taken the position that, in adjusting the timing
of services that the statute reaches, Congress did not alter the application of the
provision to contingent fee arrangements under which a government employee
stands to receive payments for services not wholly completed before the
employee’s entry into government service. See supra note 2.7
   Even though Congress may have considered the application of the statute to
employees holding interests in contingent fee arrangements and elected to retain
that bar in cases in which representational services remained to be performed after
the individual’s entry into government service, it could not have contemplated
the application of the new statute to a lawyer’s contingent interest in recovery
of expenses. At the time of §203’s enactment, ethical rules permitted attorneys
to acquire a contingent interest in the recovery of fees, but not in the recovery
of expenses. The American Bar Association’s (“ ABA” ) Canons of Professional
Ethics, first adopted in 1908, permitted contingent fee arrangements “ where sanc­
tioned by law,” so long as the arrangement was “ reasonable under all the cir­
cumstances of the case.” ABA Canons of Professional Ethics, Canon 13. Never­
theless, the ABA Canons prohibited an attorney from acquiring a contingent
interest in the recovery of expenses. Under Canon 42, adopted in 1928, a lawyer
could advance expenses of litigation on the client’s behalf “ as a matter of conven­
ience,” but only subject to reimbursement by the client, regardless of the outcome
of the case. See also ABA Comm, on Professional Ethics and Grievances, Formal
Op. 246 (1942). When the ABA promulgated its Model Code of Professional
Responsibility in 1969, it retained this distinction between fees and expenses. As
amended through 1980, the Code’s Disciplinary Rules— prescriptive in nature and
designed to govern disciplinary proceedings in those jurisdictions adopting the
Code— provided that attorneys could “ advance or guarantee the expenses of litiga­
tion, including court costs, expenses of investigation, expenses of medical exam­
ination, and costs of obtaining and presenting evidence, provided the client

   7 Section 203(a), as ultimately passed in 1962, was identical in all relevant respects to the first paragraph of
§203 o f H R 12547, 85th Cong (1958), reprinted in Staff o f the Antitrust Subcomm of the House Comm on
the Judiciary, 85th Cong . Federal Conflict o f Interest Legislation, pts III, IV, and V, at 72-73 (Comm Print 1958).
In tum, that provision was based on a draft o f revised §281 proposed by the staff of the Antitrust Subcommittee
of the House Committee on the Judiciary, which had been directed in 1957 to analyze existing federal conflict-
of-interest laws with a view toward revision. In recommending a revision of §281, the staff report acknowledged
that existing §281 covered individuals entenng the government with a contingent interest in the outcome of a pro­
ceeding The report stated that the proposed revision “ would continue to affect officials who enter the Government
as owners of, or who subsequently acquire, unliquidated or contingent interests m matters and proceedings in which
the United States is interested.” Staff Report pts I and 11, at 49 Thus, although the provision ultimately enacted
as § 203(a) was designed to exempt compensation for services wholly completed prior to an individual’s government
employment, it was not designed to exempt compensation that an employee would receive only by virtue of services
performed after he entered the government


                                                        7
                            Opinions o f the Office o f Legal Counsel in Volume 22


remains ultim ately liable f o r such expenses." Model Code of P ro fl Responsibility
DR 5 -103(B) (1980) (emphasis added). It was not until 1983, when the ABA
adopted its Model Rules of Professional Conduct ( “ Model Rules” ), that arrange­
ments for contingent recovery o f expenses began to gain acceptance. Rule
1.8(e)(1) o f the Model Rules permits a lawyer to “ advance court costs and
expenses of litigation, the repayment of which may be contingent on the outcome
of the matter.” Although a majority of states have adopted the Model Rules, some
17 states continue to prohibit the contingent recovery of litigation expenses.8
  The historically distinct treatment under professional ethics standards of law­
yers’ arrangements for contingent recovery of fees and arrangements for contin­
gent recovery of expenses— with the former commonly accepted in the civil con­
text and the latter largely prohibited until 1983— counsels against assuming that
§203, as revised in 1962, should reach a contingent interest in expenses. Were
we to conclude that § 203 reaches a contingent interest in recovery of expenses,
we would be applying § 203 to a type of payment arrangement largely unknown
in the legal profession at the time o f the statute’s enactment.

                                                         C.

  The Office of Government Ethics ( “ OGE” ), charged with providing overall
policy direction for the ethics program in the executive branch, has expressed
concern that exclusion of reimbursement for expenses from § 203’s reach will lead
to administrative difficulties, because the demarcation between those payments
that are “ for . . . representational services” and other payments is unclear. See
Letter for Beth Nolan, Deputy Assistant Attorney General, Office of Legal
Counsel, from Marilyn L. Glynn, General Counsel, Office of Government Ethics
at 1-2 (Dec. 22, 1997). In particular, a professional fee for services may some­
times include a portion attributable to expenses— such as general overhead or the
cost o f in-house photocopying or computer research— incurred by the person pro­
viding the service. OGE therefore argues that § 203 should be interpreted to cover
all types o f payments made to an attorney in connection with representational
services— including both compensation for services and payments reimbursing the
attorney for expenses associated with those services. OGE suggests that any other
approach would make it difficult to administer the statute in the same manner
to attorneys with different billing practices.

   8 Stales that prohibit the contingent recovery expenses include those that have retained disciplinary rule 5-103(B)
o f the C ode o f Professional Responsibility, see DR 5-103(B) of the Iowa, Massachusetts, Nebraska, Ohio, Oregon,
Tennessee, Vermont, and Virginia Codes of P ro fl Responsibility; see also Georgia Code of P ro fl Responsibility
DR 5-103(C), N.Y. Comp Codes R & Regs tit. 22, § 1200 22(b)(1), and those that have varied rule 1.8(e)(1)
of the Rules o f Professional Conduct to require that the client remain ultimately responsible for repayment of advance
expenses regardless o f the outcom e o f the case, see Rule 1 8(e)(1) of the Arizona, Colorado, Michigan, South Dakota,
and W ashington Rules o f P ro fl Conduct; see also New Mexico Rule o f P ro fl Conduct R. 16-108(E)(I), North
Carolina Rule o f P ro fl Conduct R. 1.8(e).


                                                         8
   Application o f 18 U.S.C. §203 to Maintenance o f Contingent Interest in Expenses Recoverable in
                                  Litigation Against the United States

   We acknowledge that an interpretation of § 203 as covering anything less than
all payments to an individual performing representational services may present
a difficult accounting problem for an attorney who wishes, upon entering govern­
ment service, to retain an interest in the recovery of advance expenses. But the
possibility of administrative difficulties cannot compel an interpretation of §203
that would criminalize more conduct than that which the statutory text clearly
reaches. Moreover, there is no reason why application of §203 cannot vary
according to the billing practices of different professionals within the confines
of applicable ethical standards. The American Bar Association’s ethical rules limit
the ability of attorneys to bill clients separately for certain expenses, such as gen­
eral overhead expenses associated with maintaining an office. See ABA Comm,
on Ethics and P ro fl Responsibility, Formal Op. 379, at 8 (1993) ( “ In the absence
of disclosure to the client in advance of the engagement to the contrary, the client
should reasonably expect that the lawyer’s cost in maintaining a library, securing
malpractice insurance, renting of office space, purchasing utilities and the like
would be subsumed within the charges the lawyer is making for professional serv­
ices.” ). To the extent that state bar rules permit him to do so, an attorney can
arrange in advance with the client to include certain other expenses associated
with in-house services within a professional fee or to bill the client for those
expenses separately. Section 203 reaches those items subsumed within a profes­
sional fee, but not those expenses separately billed to the client at actual cost.9
Thus, an attorney who includes certain expenses within a professional fee may
not retain a contingent interest in those expenses upon entering government
service, whereas an attorney who bills the client separately for the same expenses
may do so. In either case, the attorney’s choice of payment arrangement forms
the starting point for the analysis: nothing in §203 requires equal treatment for
attorneys who choose different payment structures. Indeed, similar questions arise
in connection with attorney fee awards under federal or state law, and courts have
deemed it appropriate to take into account prevailing billing practices in the legal
market in question, as well as an attorney’s particular practices, in determining
what items may be awarded under the statute. See, e.g., Missouri v. Jenkins, 491
U.S. 274, 285-87 (1989) (attorney fee award under 42 U.S.C. § 1988), Blum v.
Stenson, 465 U.S. 886, 895 (1984) (same). We are aware of no authority requiring
uniformity in fee awards despite varied billing practices.




   9 ln referring to (he “ actual cost” associated with in-house services, we do not intend to assign the phrase a
technical meaning Rather, the phrase is intended to make clear that §203 does not permit an attorney to disguise
items that would ordinarily be considered part o f a professional fee— and therefore not recoverable on a contingent
basis after an attorney enters government service— as expenses through a bad-faith agreement to charge the client
an inflated amount for actual costs incurred


                                                         9
                    Opinions of the Office o f Legal Counsel in Volume 22


                                          *   *    *



   In sum, we conclude that 18 U.S.C. §203 does not prohibit this prospective
government officer from maintaining a contingent interest in the recovery of
advance expenses in litigation involving the United States. Section 203’s prohibi­
tion on the receipt of “ compensation” extends only to compensation “ for . . .
representational services.” Although it is likely that others will perform additional
representational services on behalf of the prospective officer’s clients before the
litigation is ultimately resolved, any payments that he will receive for past
advances cannot be viewed as payments f o r these or, indeed, earlier representa­
tional services. The general purposes of §203 might support the conclusion that
§203 should be extended to cover the payments contemplated here, but those
general purposes cannot expand the statutory text.

                                                              DAWN JOHNSEN
                                                       Acting Assistant Attorney General
                                                            Office o f Legal Counsel




                                              10
