In the world of lawyers and law firms, attorney mobility is a continuing reality. Thoughtful lawyers who plan to depart their law firms are prudently getting advice on how to comply with their legal and ethical obligations to the firm and to their clients as part of the departure process. Law firms that have comprehensive plans in place to manage attorney and group departures can quickly and effectively respond to the news of a departure to help minimize its impact on the firm and clients. Yet one of the biggest questions raised by both law firms and lawyers during and after the departure process is: Can a partner plan to depart a law firm without breaching fiduciary duties to the firm? The short answer: Yes. More
into New Partnerships While Minimizing Risk and Reducing Potential Liabilities
March 21, 2018
December 8, 2017
A recent legal ethics opinion from North Carolina provides interesting insight into the ethics of a non-solicitation agreement between law firms that restricts attorney mobility but not necessarily a client’s choice of counsel.
The North Carolina 2017 Formal Ethics Opinion No. 5 analyzed the issue of whether two law firms could enter into a non-solicitation agreement with respect to each other’s employees as part of their merger talks. In the proposed contractual provision, Law Firm A agrees not to induce or solicit any partners, associates or other employees of Law Firm B to join Law Firm A (and vice-versa), for the duration of the merger talks and for a period of two years following the merger discussions. The rationale for the provision was “to foster the trust necessary for both firms to disclose financial information about the productivity of the lawyers in the firms without fear that, should the merger negotiations be abandoned, the other firm would attempt to lure highly productive lawyers or ‘rainmaker’ lawyers away from the other firm” (See Opinion.) More
January 19, 2017
Partner or group departures seldom go smoothly – at least that is what we hear in the legal news headlines. However, the transitions that do go well, and there are many of those, tend not to be newsworthy events. Most of us tend to be interested in the salacious details of where it all went wrong, who is to blame and who acted badly. But what makes successful departures different? Simple answer: preparation and planning. More
November 30, 2016
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
September 6, 2016
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