By: Sabrina C. Spitznagle, Principal & Founder at Loop Legal Search
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Lawyers have the right to leave a law firm and practice at another one, and most lawyers will exercise that right during their careers (many will exercise it more than once). During this transition, both the departing lawyer and their former firm have ethical obligations to protect their clients’ interests. To provide some guidelines and clarification on these obligations, the American Bar Association recently issued Formal Opinion 489:
Here are three takeaways from the December 4, 2019 opinion:
1. Law firms cannot impose inflexible notification requirements.
Because lawyers have an obligation to promptly notify clients if they are changing law firms, law firms “cannot impose a notification period that would unreasonably delay the diligent representation of the client or unnecessarily interfere with a lawyer’s departure beyond the time necessary to address transition issues, particularly where the departing lawyer has agreed to cooperate post-departure in such matters.” (ABA Formal Opinion 489, p. 2). Likewise, “lawyers cannot be held to a fixed notice period and required to work at a firm through the termination of that period.” (ABA Formal Opinion 489, p. 5). While law firms can request a reasonable notification period to fulfill their ethical obligation of assuring that client matters transition smoothly, they cannot hold departing lawyers to these notification periods if a client directs otherwise (they can’t restrict the client’s choice of counsel) or if they would serve as a financial disincentive to a competitive departure. “A lawyer who wishes to depart may not be held to a pre-established notice period particularly where, for example, the files are updated, client elections have been received, and the departing lawyer has agreed to cooperate post-departure in final billing.” (ABA Formal Opinion 489, p. 5).
2. Departing lawyers and law firms should work together.
In this opinion, the ABA encourages departing lawyers and their law firms to work together to ensure an orderly transition and in notifying clients of the transition: “. . . the firm and departing lawyer should attempt to agree on a joint communication to firm clients with whom the departing lawyer has had significant contact, giving the clients the option of remaining with the firm, going with the departing attorney, or choosing another attorney.” (ABA Formal Opinion 489, p. 2 (emphasis added)). Of course, this could be difficult in practice because emotions often run high and there typically is significant money at stake when lawyers switch law firms. Thus, if “a firm and departing lawyer cannot promptly agree on the terms of a joint letter, a law firm cannot prohibit the departing lawyer from soliciting clients.” (ABA Formal Opinion 489, p. 3). Similarly, “departing lawyers need not wait to inform clients of the fact of their departure, provided that the firm is informed contemporaneously” (ABA Formal Opinion 489, p. 3), and “[l]aw firms may not restrict a lawyer’s prompt notification of clients, once the law firm has been notified or otherwise learns of the lawyer’s intended departure.” (ABA Formal Opinion 489, p. 2). Law firms and departing lawyers must, however, coordinate and work together to protect client interests and ensure an orderly transition for the client by assuring that “all electronic and paper records for client matters are organized and up to date.” (ABA Formal Opinion 489, p. 4). Further, as part of their duty to ensure an orderly transition of client matters, law firms must determine whether they can adequately handle a client’s work. If the departing lawyer was the only attorney at the firm with the necessary experience, the firm should not offer to continue representing that client. (ABA Formal Opinion 489, p. 4). The opinion also encourages law firms to have written policies on departures to provide uniform expectations about working together to facilitate transitioning clients.
3. Law firms cannot restrict a departing lawyer’s ability to competently represent a client before they leave.
Because clients are not property, law firms and lawyers cannot divide them up. Clients decide who will represent them, and law firms should not “assign new lawyers to a client’s matter, pre-departure, displacing the departing lawyer, absent client direction or exigent circumstances . . .” (ABA Formal Opinion 489, p. 3). Similarly, “[a]fter the firm knows that a lawyer intends to depart but such lawyer has not yet, in fact, left the firm, the lawyer must have access to adequate firm resources needed to competently represent the client during any interim period.” (ABA Formal Opinion 489, p. 6).
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