Is Gift Giving a Form of Bribery?

“Get Your Massage Discount Now!!!” That was the subject line of an email a sales representative from a large court reporting agency recently sent to all of his clients. The body of the email went on to explain that for every two depositions that were scheduled with him by the end of the day, the secretary or paralegal would receive a coupon for a one-hour massage. So the question becomes, is that a form of bribery?

Webster’s defines a bribe as “money or favor given or promised in order to influence the judgment or conduct of a person in a position of trust.”  By that definition, promising a professional massage in exchange for scheduling depositions with a certain person may be construed as a bribe.  What do you think?

Besides the potential bribery issue, there is also the issue of who should receive the benefit of the gift.   For example, if a secretary or paralegal schedules a deposition with a certain court reporting agency because they are promised a gift, shouldn’t the benefit of the gift actually go to the client and not the secretary or paralegal?  Additionally, the law firm and its employees may in fact be charged higher rates by the court reporting agency in order to cover the cost of the gifts.

Another factor to consider with companies that entice you to use them in exchange for a gift is quality.  Are you choosing the agency because of the gift they are offering instead of the quality or accuracy of their work?  Inferior transcripts may adversely impact the parties as well as the outcome of a case.

Finally, there may be tax ramifications that result from receiving gifts.  The prestigious law firm of Hanson Bridgett was asked to provide a legal opinion on this topic. The Memorandum states, in part, “Given that the incentives provided by Reporting Firms in exchange for business are payments for services rather than gifts, the [Internal Revenue Code] requires the recipients of those payments to treat the value of the incentives as gross income.  This means that recipients must report the value of the incentives they receive as income on their tax returns.  Failure to do so could result in the assessment of additional taxes, interest, and penalties by the Internal Revenue Service.”

The Memorandum goes on to say, “Where law firms have policies in place prohibiting employees from accepting incentives, serious tax issues may still arise to the extent these policies are not enforced. ”

In its Advisory Opinion 45, Guidance on Gift Giving Rules (Provision No. 8), the National Court Reporters Association (NCRA) states, “A Member shall … Refrain from giving, directly or indirectly, any gift, incentive, reward or anything of value to attorneys, clients, witnesses, insurance companies or any other persons or entities associated with the litigation, or to the representatives or agents of any of the foregoing, except for (1) items that do not exceed $100 in the aggregate per recipient each year.”

I agree with NCRA’s position in this regard, “…these practices undermine and dilute the integrity of the reporting profession and the status of the reporter as neutral and impartial officer of the court.”

It will be interesting to see if the opinion of Hanson Bridgett is a game changer for the giving of gifts in the court reporting industry.  At Planet Depos, we are committed to providing quality transcripts at competitive rates.  We never have to pay our clients to use us.  They choose to use us because of the professionalism of our stenographic reporters and the unsurpassed customer service provided by our dedicated employees.