It’s that time of year again when lawyers begin thinking of making an employment move. Are you getting ants in your pants to try to find a better opportunity? Perhaps you are thinking about moving from private practice to an in-house counsel gig? I spoke to a young lawyer last week considering moving from government practice to private practice? I was happy that he had lots of questions because he wanted to handle matters correctly! This article describes some of the actions and considerations required to adequately “disconnect” from your old firm while maintaining your clients’ best interests.
Changing firms or practice areas can be an exciting time for sure, but if not done correctly there are many landmines that can go off possibly leaving you a casualty of a once vibrant law practice. When not handled properly, an employment change can lead to expensive and protracted litigation. We know because we have litigated on behalf of both departing lawyers and firms from which lawyers departed. The most common dispute arising in these situations is in regard to clients.
If you are considering departing your firm, one of the first -and most important- issues to address is: what are your ethical obligations to clients and your firm?
As you already know, an attorney’s decision to leave (or dissolve) a firm involves much more than just moving out personal belongings. As attorneys, we have an ethical obligation to clients to maintain the quality of legal support during these transitions. Depending on your employment status (e.g. associate, of counsel, equity partner, non-equity partner) you may have duties to the firm which remain in effect up until the day of departure.
Do You Have A Written Agreement?
Analysis of your duties begins with consideration of contractual obligations which may be detailed in any written agreement you executed with the firm, including an employment contract or operating agreement. Many such agreements address procedures, notice, etc. if you leave the firm or the firm dissolves. If you executed one, it should be reviewed thoroughly and honored. Unfortunately, many firms fail to have written agreements, which can lead to confusion and controversy when an attorney departs or the firm dissolves. However, lack of a written agreement does not foreclose your ability to continue representing your clients.
You CAN Take Clients With You
The legal industry is unique in that your old firm cannot restrict you from contacting your clients and offering to continue their legal representation. However, the scope and timing of such communications often times leads to problems due to confusion regarding the applicable requirements.
The Georgia Bar has issued guidelines that clarify an attorney’s right to contact clients that he represented at his former firm. Specifically, Formal Advisory Opinion No. 97-3 (“FAO 97-3”) https://www.gabar.org/handbook/?rule=rule511&revision, responds to the specific issue of whether “it is ethically permissible for a departing attorney to send a communication to clients of the former law firm.” As an initial matter, FAO 97-3 states that “to the extent that a lawyer’s departure from the firm affects the client’s legal matters” the departing attorney has an affirmative duty to inform the client of the attorney’s departure and take steps to protect their interests. FAO 97-3 further provides that the Georgia Rules of Professional Conduct do not prohibit “a departing attorney from contacting those clients with whom the attorney personally worked while at the law firm. A client is not the property of a certain attorney.” (Emphasis added). FAO 97-3 further elaborates that such communication is permissible provided that the attorney has “either had significant contact or actively represented”.
Keep Your Clients Informed
It is critical that both you and your previous firm adequately communicate with clients during the departure process. If you let personal or business disputes get in the way of your clients’ best interests, you may end up as the respondent in a State Bar disciplinary proceeding or a defendant in a legal malpractice or breach of fiduciary duty complaint. Always hold your client’s interests paramount above all others. Below are relevant duties in this regard:
- Notify your firm. You should provide advance notice of your departure and avoid gamesmanship in planning and announcing your departure. FAO 97-3 is explicit in this regard and cautions that “the fact or circumstances of an attorney’s departure from a law firm should not be misrepresented” and that any conduct which involves “dishonesty, fraud, deceit, or willful misrepresentation” is a violation of Rule 8.4, for which the maximum penalty is disbarment. Accordingly, allow enough time to determine how best to handle the departure and client communication, bearing in mind that clients require adequate notice to make informed decisions about future legal representation.
- Notify your clients. The best practice is to send a joint letter with the firm providing notification of the departure timeframe and how file transfers (if applicable) will be handled. With a simple check box and signature, clients can return the letter designating their choice of attorney. If you and the firm cannot agree on a joint letter to clients, it is permissible to send your own letter.
- Notify your insurance carrier. This often-overlooked step is required to sever liability from the old firm and clients, plug any potential gaps in coverage, and set up coverage for your new position. This may take some time, especially if you are establishing a new firm. Do not wait. Consider purchasing prior acts coverage or an extended reporting endorsement so there are NO gaps in coverage.
- Notify the Bar. Many lawyers forget about updating their contact information with the Bar. The Rules require you to supply all of your new contact information, but it’s also a good marketing move. Once learning about your departure from your firm, many people will begin looking for you on the Bar’s website. Make it easy for them to find you!
Expect Some Pushback, If Not A Fight
We are attorneys, so expect some competition for those valuable clients. While it’s rare for a firm to escort a departing attorney out the door, expect your firm to make some attempt to retain the clients. While you may believe that you have the most experience working with your specific clients, your firm may highlight its experience, staff, resources and infrastructure as reasons for those clients to stick with the firm. The bottom line is that the client is the boss, and it is the client’s choice alone as to who will represent the client’s interests. In rare cases, the client’s choice might be neither you nor the firm.
Is This In My Clients’ Best Interests?
This is the best way to address any questions or issues that may arise during the departure and transition process. If the answer is an affirmative “yes” then you will likely steer clear of trouble. Don’t let disputes with your previous firm or general departure turmoil get in the way of providing clients with the best possible transition support and ongoing legal representation. Your clients will thank you for it. Your client may love you like a family member, but I can assure you that clients do not want to get caught up in law firm drama. Clients really only care about their matter—the matter you were hired to handle. We have seen many instances where clients will avoid the firm departure drama altogether by retaining some other third-party lawyer.
If you are considering a move to open up a new solo practice or move to a new firm, there are many more considerations not addressed in this short article which will dictate how you handle the issues you will face. Again, make the client’s interests paramount then put your departure plan in writing. Make sure you run your plan by counsel experienced in navigating these often stormy waters. The few dollars you may have to spend up front carefully mapping out an ethical departure plan will pay huge future dividends, and also help keep you out of trouble with your clients, your old firm, your former partners, and the State Bar.
As one of our recent clients wrote to us “You guys were immensely helpful preparing me for leaving the firm. I was able to navigate leaving the prior firm and give pushback against them with confidence. Thanks for that!”
