Publication

DO’S AND DON’TS FOR DEPARTING A LAW FIRM

By Don P. Foster | Read part two and part three here.

 

Lawyers are changing law firms at an ever-increasing rate. No news there. The reasons are manifold and include personality conflicts, culture, career advancement, boredom or even following a spouse or significant other to another city or state. But face it, we all know that there is one over-arching reason why an attorney changes firms … money. The increasing commoditization of the legal profession, or at least of the attorneys that comprise the profession, has created an environment in which the attorney’s value – and, hence, his or her compensation – is measured by the number of dollars the attorney controls, and has created a market place where attorneys are for sale to the highest bidder.

If the goal is more money and that goal can only be realized if the successor firm enjoys the financial benefit of the attorney’s portable book of business, there are powerful incentives for the attorney to make sure the book is as thick as he or she represents it to be to any potential new firm – and that it is, in fact, portable. There are equally powerful incentives on the firm and individual attorneys who might inherit the business to retain as many of the clients serviced by the departing lawyer as possible. This is the ugly tension created by lateral moves of attorneys from one firm to another and implicates legal ethics, the law of fiduciaries (including partnership law), and common law principles of contract and unfair competition. See the ABA Commission on Ethics and Professional Responsibility, which says: “The departing lawyer must also consider legal obligations other than ethics rules that apply to [his/her] conduct when changing firms, as well as … fiduciary duties owed the former firm. The law of agency, partnership, property, contracts, and unfair competition impose obligations that are not addressed directly by the Model Rules …”

The next two posts in this series, which will be published over the next two days, are a check-list of “do’s” and “don’ts” when an attorney moves to another law firm. The list is prepared from the vantage point of the departing lawyer, but largely applies to the law firm – for example, the proscription against non-disparagement. The list is a by-product of Joint Formal Opinion 2007-300, “Ethical Obligations When A Lawyer Changes Firms,” case law and experience. It is not exhaustive because the rules can change somewhat from state to state depending upon what a partnership or employment agreement provides and how the courts interpret those agreements.

 

© 2012 The article “Do’s and Don’ts for Departing a Law Firm” was part of a three part series which appeared on the Legal Intelligencer’s blog between February 21-23, 2012. Further duplication without permission is prohibited. For reprint information, please contact ALM Publications reprint department, 877-257-3382, reprints@alm.com or visit www.almreprints.com.

 

ABOUT DON FOSTER

dfoster@offitkurman.com | 267.338.1357

Don Foster has been trying cases to verdict in federal and state courts throughout the country for over thirty years. He also serves as outside general counsel and advisor to small businesses in a variety of industries. His trial and alternative dispute resolution experience is varied and includes disputes involving title insurance, intellectual property, health care, franchising, corporate governance, law firm dissolutions, attorney relocation and fiduciary litigation in Pennsylvania’s Orphans Courts.

Mr. Foster is a member of the Board of Directors of Highmark, Inc., one of the larger Blue Cross/Blue Shield companies in the country. He currently serves as Chairman of the company’s Investment Committee after chairing the Audit Committee. He also serves on the Executive and Corporate Governance Committees. Prior to the formation of Highmark, he served on the Board of Pennsylvania Blue Shield. Mr. Foster serves as a Judge Pro Tempore in the Philadelphia Court of Common Pleas, and has been appointed to a two year term as a Delegate in the Pennsylvania Bar Association House of Delegates.

 

 

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