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When lawyers leave

Ethical obligations to consider when changing firms

leaving_mainYou’ve been with your current law firm for a number of years. Perhaps you aren’t getting the type work you wanted, or you haven’t progressed as quickly as you’d hoped. Or, maybe, you’re just ready for a change.

No matter the reason, making the announcement to leave your firm won’t be easy for you or the partners you work with.

There are a variety of ethical issues to consider when leaving a law firm and joining a new one.  How much notice do you provide to your current firm? What conflicts of interest might you face at your new firm?

Most importantly, how do you notify affected clients of your departure?

Regardless of whether you plan on leaving your firm, or if you are a law firm leader currently handling the departure of a partner or an associate, it’s worth having a game plan in order for the day either situation may arise.

“Firms that want to stay viable in today’s environment need to accept and anticipate lateral movement between firms as a common and practical reality,” wrote Virginia State Bar Ethics Counsel Jim McCauley in a 2013 report.

Though several states have ethics opinions with guidelines on managing the process of an attorney’s departure, in 2015 Virginia became the second jurisdiction in the country to add such guidelines to its actual ethics rules – in particular, noting how and when lawyers and firms must give notice to the affected clients.

With this “client-centered” focus in mind, there are best practices and ethical issues to consider when a lawyer plans to leave one firm for another.

Notifying your firm

Virginia Beach attorney Kellam Parks had been considering leaving his previous firm, Wolcott Rivers Gates, to start his own practice for almost a year. Once he had a game plan in order and felt confident he could manage on his own, he was ready to announce his resignation — and gave his employers plenty of time to prepare for his departure.

“I believe I gave them 60 days’ notice, but I offered at least 30 days’ notice,” Parks said, who started his own practice, Parks Zeigler PLLC, in 2012. “It’s important to give them notice… To give them time to prepare.”

A lengthy notice may also help prevent you from burning any bridges.

“It’s a very small legal community in Virginia… Your reputation is everything. And if you don’t handle it professionally it’s going to get around,” Parks said.

Notifying affected clients 

In 2015, the Supreme Court of Virginia adopted Rule 5.8 that requires a departing lawyer and/or his or her firm to notify clients of the lawyer’s departure and the client’s options for continuation of the representation.

The rule was significant in mandating that neither the firm nor the departing lawyer may unilaterally contact clients to inform them of the lawyer’s impending departure before at least attempting to negotiate a joint communication.

This is often easier said than done.

“Often [law firms] don’t want to meet. Often they’re angry that the lawyer is leaving and wanting to give notification to those clients,” McCauley said.

Under these circumstances, both the lawyer and the firm may individually contact affected clients informing them of the lawyer’s departure and present them with three options: to stay with the firm, to leave with the lawyer or find representation elsewhere.

“The notice should be neutral, making clear the options from which the client may choose,” McCauley said.

The departing lawyer is ethically obligated to work toward an orderly transition of all client matters, even those that will remain with the firm. Law firm management, for its part, cannot impede the departing lawyer in providing prompt notice to clients of an anticipated departure, after the firm has been notified of the lawyer’s intent to depart.

The departing lawyer also cannot inform clients of his or her exit before notifying the firm. According to McCauley, lawyers who do so may face a civil action alleging breach of fiduciary duty, tortious interference with contract and unfair competition.

In short: Don’t be sneaky. Play by the rules to ensure a smooth, amicable exit from your firm.

Ethical obligations of your old firm

Though there are many ethical stipulations for the departing lawyer to consider, the firm has its own ethical obligations to fulfill. Most specifically, the firm may not interfere with a client’s decision to leave with the departing lawyer.

“Some of the worst letters are where one side attempts to disparage the other and tries to persuade the client they would be making a bad decision by going with the departing lawyer,” McCauley said, emphasizing the importance of keeping communications to clients “neutral and non-disparaging.”

Of course, situations may vary. When Roanoke litigator Daniel Frankl left Gentry Locke in 2004, he said the firm had decided to step back from workers’ compensation cases. Frankl and two other attorneys saw this as an opportunity to start their own firm — an idea they made sure to communicate to their employers.

According to Frankl, Gentry Locke supported this transition and encouraged the attorneys to reach out to current clients on their own.

“Normally, if you’re looking to leave and open a new firm, there’s going to be ethical responsibilities not to do that,” Frankl said. “But since they supported our attempt to get those clients to transfer over to our new firm, we didn’t have any of those ethical considerations.”

Regardless of the circumstances, communication between the departing lawyer and law firm is key.

Conflicts of interest

Your new firm has ethical obligations to uphold, as well, particularly regarding conflicts of interests when it brings in a lateral hire. For example, if a lawyer leaves one side of the practice to work for the opposing side, they may find that their new firm represents a client who’s adverse to a client of their previous firm.

When Parks wanted to hire a new associate, he realized the lawyer was representing the ex-wife of a current client at his firm.

“That attorney coming over would have knowledge that could be used to the husband’s advantage,” Parks said. “We told them if they wanted to work with us, they had to withdraw from that case.”

This is part of the screening process a firm must initiate before hiring a new attorney, which falls under Rule 1.9 of the VSB Professional Guidelines.

Though eliminating potential conflicts of interest is a duty of the new firm, the departing lawyer should take on this responsibility as well to ensure no conflicts interfere with past, present and future clients.

Advice to the firm and departing lawyer

Frankl advises law firms to plan ahead for the possible departure of a partner or associate.

“We have a partnership agreement that addresses some of the issues that come up when someone leaves,” Frankl said, which can cover issues such as division of clients and notice of departure.

Regardless of why you’ve chosen to leave your current firm, joining a new practice is no small decision — which is why Park advises attorneys to evaluate the reasons they want to leave.

“The grass is not always greener. Really evaluate why you’re not happy. Is it personality? Is it financial? Is it something that can be fixed? If so, consider trying to work it out,” Parks said. “If you’re really not happy and need to leave, then do your homework to understand your new firm.”