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Court sets rule for departners – lawyers who leave a firm

BThe Supreme Court of Virginia has adopted ground rules for the battles that arise when law firms break up or lawyers split from firms to practice elsewhere.

Until now, the only guidance for dealing with often-confused clients has come from legal ethics opinions. After much tinkering with language through the rule-adoption process, the guidance now has the force of a court rule.

The court added Rule 5.8 to the Rules of Professional Conduct on Feb. 27 and made it effective May 1.

The rule governs the information to be provided to clients when a lawyer departs. The two sides rarely agree on the wording of the client notice.

“In the heat of an acrimonious law firm breakup or lawyer departure, the lawyers involved fight over and cannot agree on who – the departing lawyer or the law firm – should give the notice,” the Virginia State Bar said in a petition to the court last year.

The rule-making process was initiated by the VSB Standing Committee on Legal Ethics.

“Because of the significance of this issue, the frequency with which these issues are raised on the Ethics Hotline, and the acrimony that often accompanies a firm departure or dissolution, the Committee believes that it will be helpful to have a Rule of Professional Conduct that explicitly dictates how and under what circumstances clients must be notified, rather than relying exclusively on advisory opinions,” the bar said.

The rule comes after several law firm splits led to court cases. The departure of a group of attorneys from Richmond personal injury firm Geoff McDonald & Associates PC gave rise to a protracted court battle that still simmers.

One of the prizes in that conflict is the recent settlement on behalf of a former inmate of the Richmond city jail. The city of Richmond agreed to pay $2.99 million – with other defendants adding undisclosed consideration – to resolve claims that Stefan Woodson was allowed to suffer disabling heat stroke in a jail unit with no air conditioning.

The lawyers who left kept the Woodson case, and they and McDonald have not come to terms on how much of the settlement may be owed to McDonald.

Under the new rule, neither the departing lawyers nor those who remain would be able to contact clients until the two sides had attempted to work out a joint letter. Failing agreement on a joint letter, any unilateral communication must provide options for the client to choose the lawyer or lawyers to stay with or to seek representation elsewhere.

The rule bans any false or misleading statements in communication to the clients.

When clients are silent

There are default choices when clients remain silent.

If a client of a departing lawyer fails to advise of the client’s intention with regard to future legal services, the client shall be deemed a client of the law firm until the client advises otherwise or until the law firm terminates the engagement in writing.

If a client of a dissolving law firm fails to advise of the client’s choice, the client shall be deemed to remain a client of the lawyer who is primarily responsible for the legal services to the client on behalf of the firm until the client advises otherwise.

The rule adopted by the court leaves out the phrase “in good faith” from the command to confer or attempt to confer on a joint client letter or a means of providing notice. Other minor language changes were made.

Comments to the rule state that either the departing lawyer or the law firm “shall take appropriate steps in accordance with Rule 1:16 regarding the client’s file, and any other property including advanced legal fees.”

The comments also recognize that other obligations may govern the situation and that some clients may be limited in their ability to choose counsel.

“For example, when the lawyer is appointed by a court to represent a client, the appointed lawyer is responsible for the representation until relieved or replaced by the court,” the court said in one comment to the new rule.

The new rule was welcomed by one of the lawyers involved in the bitter split at the McDonald firm.

“In my experience, such a rule is necessary to prevent the gamesmanship and overreaching which can often occur in such situations,” said Jonathan H. Halperin, a former associate at the McDonald firm.  “Such a rule is necessary to help protect clients from inappropriate attempts to steer them away from the counsel of their choice in a race to the Post Office,” Halperin said.

McDonald was away from his office on personal business and was unable to provide substantive comment.

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