Trends and Analysis for Successfully Transitioning Lateral Partners
into New Partnerships While Minimizing Risk and Reducing Potential Liabilities

Ethical Obligations.

Are you Really a Partner? Non-Equity or Income Partners May Have Unique Issues During a Departure or Lateral Move

In today’s legal world, the traditional view of what it means to be a “partner” seems to be ever-changing. As more law firms move from two-tier to multi-tier partnerships, the question of what it truly means to be a non-equity, income, or salaried partner is becoming an increasingly important issue. Specifically, during any partner departure or lateral transition, the exact nature of the partner’s status has a variety of ethical, contractual, and legal implications for the lawyer, as well as for the law firm. This issue must be analyzed carefully as part of any law firm departure. More

Mitigating Risks During Departure, Part 2: Minimize Exposure to Potential Claims Following a Partner Departure

It is important to remember that there are no absolute safe harbors protecting you from potential liability even when you endeavor to do all the right things when departing your firm. This is true in large part because there are often grey areas within the rules, tensions between those rules and your obligations to your firm, and a disparity between what is in the best interest of the firm versus the client, and even potentially you. In addition, you cannot control the response, behavior and/or motivations of certain firm members that may not want to see you succeed or are angry that clients may leave with you. Yet, making informed decisions, strategically planning and consciously navigating these grey areas helps to mitigate many of these risks.

As stated in part one on this topic, there are two main categories of risk a departing partner faces when considering his/her transition to a new firm. First, the risk that your firm will find out about the potential departure (or departure considerations) prior to the time that you are ready to tell the firm or provide formal notice. Second, the risk that your conduct with respect to your departure plans or considerations will expose you to potential claims by your firm or your clients of unlawful or unethical conduct. Sometimes attorney conduct will potentially implicate both categories of risks. Part two on this topic of mitigating risks analyzes ways to minimize your exposure to potential claims or allegations of misconduct following a partner departure. More

Are Recent Ethical Rules that Establish Attorney Notification Protocols For Departing Attorneys Really in the Best Interest of the Clients?

Earlier this year, the Virginia State Bar enacted a new ethical rule governing how attorneys and law firms should notify clients in the event of an attorney departure or firm dissolution. The new rule, Rule 5.8 of the Virginia Rules of Professional Conduct, is an effort by that state to regulate what it viewed as a difficulty in getting attorneys and law firms to cooperate related to the handling of law firm departures and dissolutions, and in how attorneys notify clients of these changes. More

Departing Partners And Potential Conflicts With Current And Former Clients: The Featured Role Of The “Substantially Related” Test In Two Recent Disqualification Decisions

In the space of fifteen months, the Northern District of Texas and the District Court of Delaware have each issued significant attorney disqualification orders. In both cases, the “substantially related” test regarding past and present representations had a featured role in the courts’ decisions to disqualify the same California law firm from significant patent cases. For departed partners and their new firms, these decisions serve as important reminders about the key factors to analyze before becoming adverse to former clients. More

Best Practices For Firms In Considering Whether to Provide a Departing Attorney with a Copy of His or Her Entire Mail Folder upon Departure from the Firm

Once a firm is given notice from a departing partner that the partner plans to leave the firm, there are a myriad of issues that need to be resolved prior to, and following, the partner’s actual departure. One important issue relates to the handling of the departing attorney’s email once he or she leaves the firm. Many departing partners who have been with their prior firm for a significant period of time and leave on relatively good terms often ask the firm to provide them with a copy of their entire email folder upon their departure. There are a variety of reasons for this request, but the most significant relates to the attorney’s need to have immediate access to all relevant communications related to client matters that will be following that partner to his or her new firm. However, even if a law firm is willing to comply with this request, is it appropriate to do so? And if so, what issues should the firm be concerned about with respect to the transmission of the partner’s email folder? More

The Obligations of Departing Attorneys to Avoid Prejudice to Clients Upon Firm Dissolution or Withdrawal Analyzed in California State Bar Opinion

The State Bar of California’s Standing Committee on Professional and Responsibility and Conduct’s (the “Committee”) first Formal Opinion for 2014 addresses the duties of an attorney to former clients when that attorney will no longer be representing a client following the dissolution of the attorney’s firm. (State Bar of California, Committee on Professional Responsibility and Conduct, Formal Opinion 2014-190.) The Committee looked at the scope of duties of both associates and partners (in various positions in the firm) in light of the requirements set forth by California Rules of Professional Conduct, Rule 3-700(A)(2).  In essence, the Committee found that in the event of a firm’s dissolution, all attorneys who are employed by, or are partners of, a firm are required to comply with Rule 3-700(A)(2) with respect to the firm’s clients. More

Ethical Obligations Regarding the Use and Handling of a Law Firm’s Domain Name upon a Partner Departure and Change In the Firm’s Name

An interesting ethics issue is being considered by the Virginia State Bar with respect to whether and how a firm can continue to use its URL after a partner departure when the URL contained the former partner’s name in it and the firm’s name has changed.  At present, the Virginia State Bar Standing Committee on Ethics has issued a proposed Advisory Opinion on this issue, but is still seeking comment on this topic through February 28, 2014.  (See Virginia State Bar Proposed Legal Ethics Opinion No. 1873.)  While this proposed opinion does not originate in California, it will be instructive on handling similar issues that arise in California, given that the ethical rules that are the underpinnings of this proposed opinion are substantially similar to those in California. More

Law Firms have Ethical Obligations with Respect to the Handling of a Departing Partners Email Communications and Account

According to the Philadelphia Bar Association’s Professional Guidance Committee, ethical rules permit a law firm to review a departing partner’s emails in order to determine what emails should be forwarded to the departing partner and what emails relate to current firm matters of which the law firm should be aware.  (See Philadelphia Bar Association Professional Guidance Committee, Opinion 2013-4.)  The Committee found that the departure partner did not have the right to insist that his/her former firm emails be simply bounced back to him/her without allowing the firm to first review all the emails.  More

Departing Partners and Client Files Part II: Transferring Client Files in the Digital Era

Not long ago client files consisted only of hard-copy documents in physical file folders and typically contained filed briefs, discovery, transcripts, correspondence and memoranda of law.  While there was a split in authority on whether attorney notes and drafts should be included as part of a client’s file, the California Rules of Professional Conduct states that essentially all substantive documents pertaining to the client and his or her case belong to the client.  (California Rules of Professional Conduct, Rule 3-700(D).)  Thus, if a client chose to follow a departing partner, the firm was required to transfer the client’s hard-copy files to the departing partner so that the client could continue to receive adequate representation. More

Departing Partners and the Handling of Client Files in California

A substantial body of case law and ethics opinions addressing the handling of client files has developed over the years surrounding the concept that a client’s file is a client’s property.  (Rose v. State Bar (1989) 49 Cal.3d 646.)  This notion is based on the underlying idea that clients may discharge an attorney at any time, with or without cause, in the interest of obtaining the successful prosecution or defense of a claim.  (Fracasse v. Brent(1972) 6 Cal.3d 784.)  Since effective client representation generally requires access to a client’s file, if a client chooses to follow a departing partner, the client’s entire file should be transferred from the law firm to the departing partner immediately.  (Rose v. State Bar (1989) 49 Cal.3d 646; California Rules of Professional Conduct, Rule 3-700(D).) More