ABA issues new ethical guidance for when lawyers leave Lawyers have the right to change firms, and from all indications the lateral movement of lawyers from one firm to another has reached a fever pitch during the past few years. Departing lawyers and their firms have an ethical duty to protect clients’ interests during a transition.
Amid this trend, the American Bar Association Standing Committee on Ethics and Professional Responsibility released new guidance in December for lawyers and their firms exploring ethical obligations when lawyers leave for another firm.
The Rules of Professional Conduct do not address whether a lawyer must notify the firm of an impending departure before notifying clients. Because firm lawyers have a fiduciary duty to treat each other fairly and honestly, 16 most ethics advice strongly encourages lawyers to notify the firm of an impending departure before notifying clients. 17
Furthermore, law firms cannot restrict departing lawyers’ access to files or support staff to the extent necessary to provide diligent representation to clients.
Despite its possible limitations, practicing federal law before an agency instead of trying to launch a new state law-based practice is a viable option for many relocating lawyers. It may especially appeal if you are not sure you will stay in the new state and don't want the burdens of gaining full admission.
Stealing clients from the firm can be a breach of fiduciary duty. Take, for example, the case of the Dowd and Dowd firm. When two partners decided to leave, they used confidential information to secure funding for a new firm, secretly contacted clients, and poached employees.
The Code of Professional Responsibility does not prohibit a lawyer from being associated with more than one law firm.
This can either be in a shared law office suite, executive suite, or even at another law firm's office. A basic package shouldn't cost more than $100/month (plus conference room rental fees when you need it) and the agreements are typically month-to-month.
There are essentially only three exceptions to such contact: (1) direct contact with clients with whom the lawyer has had a prior professional relationship; (2) direct contact with individuals with whom the lawyer has an established personal relationship; or (3) solicitation of clients for “political” purposes rather ...
A non-solicitation agreement is an in-depth way to cover poaching. With a non-solicitation agreement, you specifically ask contractors to sign an agreement stating they won't solicit your company's clients or employees up to a designated time period following their work with your business.
A lawyer who practices at two firms has fiduciary duties to both of them. Several ethics opinions have concluded that a lawyer with an “of counsel” relationship to one firm can simultaneously practice law in a second firm that bears that lawyer's name.
A lawyer or a law firm may be "of counsel" to another law firm as long as there is a close, regular, personal relationship with the firm. A lawyer who is "of counsel" to a firm must be alert to the "enhanced conflict of interest potential inherent in the arrangement."
The ABA and California rules allow an attorney to hold one or more “of counsel” designations while maintaining a separate source of work, so long as the firms involved appropriately monitor and clear conflicts and adhere to all applicable ethical rules.
Law Firm Partners Often called shareholders, they are owners and operators of the firm at the same time. The law firm can take many forms and structures. Firms with just one attorney are called sole proprietorships.
It can make it easier to manage the facilities and technological issues that may exist in a law firm when there is a single location. On the other hand, if you have one location, all your clients and potential clients have to travel to this single location.
In the United States, the terms lawyer and attorney are often used interchangeably. For this reason, people in and out of the legal field often ask, “is an attorney and a lawyer the same thing?”. In colloquial speech, the specific requirements necessary to be considered a lawyer vs attorney aren't always considered.
36 Rule 4-1.1 requires competent representation of the client, and Rule 4-1.3 requires that the representation be provided with diligence. Rule 4-5.1 requires partners and other supervisory lawyers in a firm to make reasonable efforts to ensure the firm has polices in place assuring all lawyers within the firm provide competent and diligent representation and comply with all other duties in the Rules of Professional Conduct. The rule further requires lawyers in a firm with direct supervisory authority over another lawyer to make reasonable efforts to ensure the supervised lawyer complies with the rules, and under certain circumstances, a managerial lawyer can be responsible for misconduct of a lawyer under the manager’s supervision. 37
A departing lawyer and the lawyers remaining at a firm have ethical and legal obligations to firm clients and to each other, and both the firm and departing lawyer have legitimate business interests in the future practice of law. These duties and interests may be difficult to harmonize.
Because firm lawyers have a fiduciary duty to treat each other fairly and honestly, 16 most ethics advice strongly encourages lawyers to notify the firm of an impending departure before notifying clients. 17.
Notice of a lawyer’s departure from a firm need not be given to former clients of the departing lawyer or to all clients of the firm. Notice is to be provided to current clients for whom the lawyer has provided “material representation,” for it is those clients for whom the lawyer’s departure occasions a “material change” in the circumstances of the representation. 18 Other ethics advice describes the proper recipients of notice as clients with whom the departing lawyer has had “significant client contact.” 19 Because of the importance of providing clients with notice, it is advisable in a questionable case to err on the side of caution by informing the client. 20
Departing lawyers and their firms have a duty under Rules 4-1.6 and 4-1.9 to protect the confidentiality of information related to the representation of current and former clients of the firm. The lawyer also has an ongoing obligation not to enter an affiliation with a new firm under circumstances that would result in a violation of the duties owed to clients and former clients under Rule 4-1.7 (Conflict of Interest: Current Clients) and Rule 4-1.9 (Duties to Former Clients). 49
Lawyers who are unaware of conflicts of interest because of a failure to implement adequate procedures are not excused from ethical liability. 50.
Nevertheless, lawyers on both sides of the event are advised to keep their ethics obligations to clients and to the firm at the top of their priority lists. Lawyers have an ethics obligation to communicate with and protect the interests of clients whose representations will be affected by the transition.
Recognizing that DEI is critical to the legal profession, our judicial system, and the rule of law, law schools re-energized their DEI efforts, implementing new anti-racism and DEI efforts, initiatives, and trainings for faculty, staff, and students.
Continually updated tools and resources to help move your practice and the legal profession forward during COVID-19 and beyond.
Maybe you are a solo lawyer joining a larger firm as a new partner, maybe you have accepted an in-house position, or maybe you are retiring. No matter the case, closing a law firm may seem simple. Turn out the lights and lock the door on your ...
1. Stop accepting new cases. Even before you begin the process of winding down your law firm, stop accepting new cases. Each new client you consult could become a potential conflict when you do close your law firm. Speak to other attorneys about referrals and fee sharing for cases that do come your way.
The risk covered by malpractice insurance does not go away just because your law firm has closed. Discovery periods and statute of limitations for malpractice claims will continue long after law firm closure. Some policies can be supplemented by a “tail policy.” A tail policy extends coverage for claims relating to your current coverage, but does not cover claims against acts made after your professional liability insurance expires. Most insurance companies refer to tail policies as extended reporting endorsements (ERE). A lawyer leaving the legal profession should contact their insurer to discuss continuing coverage even after the closure of the law firm or the addition of an ERE to the policy prior to closing the law firm.
Even if you are able to hand off all client files, a lawyer still needs to retain financial records relating to their trust accounts and money handling. These file retention requirements extend for years in most jurisdictions. Get familiar with your jurisdiction’s rules regarding financial document retention.
However, closing a law firm is not a simple process. Clients and regulators will continue to be interested in your law firm for years after it closes. At best, clients will require access to documents and files still in a lawyer’s possession.