A number of books have been written that discuss the myriad of issues raised by the departure of a firm attorney. These books often cover everything from partnership law and the fiduciary duty of loyalty to whether or not a firm’s client list is a trade secret. While such books can and do offer a plethora of valuable information, I suspect many attorneys depart from firms without anyone ever taking the time to study the issues by reading one of these books cover to cover, if for no other reason than the lack of time. In recognition of our need to know the basics presented in a succinct format, I offer the following tips to help guide one through an attorney departure.
· A law firm cannot prohibit an attorney from leaving the firm and competing against the firm for clients. That said, the departing attorney cannot ignore his or her fiduciary duties to the firm. Generally the departing attorney may make necessary logistical arrangements prior to departure such as renting office space, opening bank accounts, or purchasing office equipment but such planning cannot include secret discussions to lure away staff, other firm attorneys, or firm clients, nor can it involve unilaterally deciding to move client monies to a new trust account.
· With regard to notice, timing is everything. The firm should be notified as soon as possible after the decision to leave has been made. While there are no bright lines, there is a difference between thinking about leaving a firm and committing to actually leaving. Committing to actually leaving does not mean waiting until after an agreement spelling out the terms of a lateral move has been formalized. It means when the departing attorney has made the mental decision to begin investigating options because one should not allow a firm to make an untimely and potentially poor business decision unaware of an upcoming departure. Of course, if a partnership agreement exists and the document spells out the notice requirements for an attorney departure, abide by the terms of the agreement.
· Clients for whom the departing attorney is primarily responsible are to be promptly notified once a decision to depart has been made. With client notice, avoid the client grab. The file belongs to the client and the attorney and the firm are in the employ of the client. This means that the decision as to who gets the file post departure will always remain solely with the client: period, end of discussion. In a perfect world a joint letter from the firm and departing attorney is sent to all impacted clients that informs the clients of the upcoming change as well as the options the clients may have. If the departing attorney will remain in practice, the options would normally be that the client’s matter/s may stay with the firm, go with the departing attorney, or the client may select to have the matter/s transferred to a different firm. There is no rule prohibiting differing default options should any particular client not respond to said letter. Regardless, never disparage the departing attorney or the firm one is departing from in the notice to the client.
· As the departing attorney, don’t unilaterally decide to remove client files, computer equipment, and the like off site in the middle of the night. By the same token, as the firm, don’t unilaterally decide to prevent the departing attorney from continuing to work on client files that he or she has primary responsibility for. Unfortunately, this advice does need to be shared.
· When a client file leaves with the departing attorney or is going to go to a different firm keep the following in mind. Unless you can do so without causing harm to the client, you cannot hold a client file until the firm is paid its share or the account is brought current. Further, the file must be delivered in a reasonable time. The question of what documents belong to the client and must be delivered verses what don’t can be a difficult one. A practical guideline is this: going beyond client originals, if you billed for producing the document, it belongs to the client. If you have any concerns about potential liability on any given file, make a copy of the file before the file physically leaves the premises because obtaining a copy later on may be rather difficult. If you have concerns about the overall skills of the departing attorney perhaps a file review of all outgoing files prior to delivery would be warranted. Keep a record of what files went where and when they left.