Don’t Leave Me This Way

Lawyers with active clients moving from one firm to another is fraught with potential ethical problems. The issues presented here are addressed in Ethics Opinion 699 (2024). The focus in such situations is on how any restrictions on departing lawyers would affect the firm’s clients rather than how they would affect the lawyers or the law firm. As the Opinion wryly observes:

Clients generally have the right to decide who will represent them. They are not chattel owned by lawyers and law firms. Clients are free to terminate lawyers and their law firms with or without cause, although a client’s financial obligations concerning fees and the reimbursement of expenses may not be extinguished by termination. Mandell & Wright v. Thomas, 441 S.W.2d 841 (Tex. 1969); Hoover Slovacek, LLP v. Walton, 206 S.W.3d 557, 561, 563-65 (Tex. 2006). Rules 1.02 and 1.15 confirm the client’s ultimate decision-making authority, both with respect to the conduct of the representation and the termination of the lawyer-client relationship.

The Opinion finds that prohibiting a lawyer from notifying clients of their intended departure runs afoul of Texas Disciplinary Rule of Professional Conduct 1.03, which not only allows but requires lawyers to: (1) keep clients reasonably informed about the status of a matter and (2) provide sufficient information to permit a client to make informed decisions regarding the representation:

Assuming that the departing lawyer is responsible for a client’s representation or currently plays a principal role in the law firm’s delivery of legal services to that client, the departing lawyer has a duty to ensure that a client is timely informed (a) that the lawyer is leaving the firm, (b) that the client has the ultimate right to decide who will continue the representation, and (c) whether there are any contractual or financial ramifications of the client’s decision. See Rule 1.03 (“A lawyer shall keep a client reasonably informed about the status of a matter and . . . shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation). A departing lawyer who participated minimally in a client’s representation or in a secondary role has no such obligation, at least where one or more remaining lawyers in the firm have also “personally represented” the clients and have had principal responsibility for those matters. A departing lawyer also has no obligation to ensure that the lawyer’s former clients are notified of the lawyer’s departure (i.e., where the client representations have been completed before the lawyer’s departure).

Clients, therefore, must be timely notified of the departure and made aware that they have the right to decide whether they go with the departing lawyer or stay with the firm.

Likewise, a law firm cannot prohibit a lawyer from soliciting the firm’s clients after departure because that “restricts the rights of a lawyer to practice after termination of the relationship,” which is prohibited under Rule 5.06. Opinion 699 cites previous ethics opinions finding that law firms cannot ethically prohibit contacting or soliciting clients after the lawyer’s departure because “solicitation is part of the practice of law”:

In Opinion 505 (August 1994), the Committee examined a related provision of Rule 5.06 and found that “solicitation is part of the practice of law and therefore cannot be more restricted in a settlement agreement than it is restricted in the Rules and applicable law.” Further, in Opinion 590 (December 2009), the Committee determined that a law firm offering membership in the firm to lawyers on the condition that they agree not to solicit the firm’s clients after the lawyers’ departure violates Rule 5.06.

In accordance with Opinions 505 and 590, a lawyer may not participate in offering or making a partnership or employment agreement that restricts the right of a lawyer to contact or solicit clients after termination of the relationship between the lawyer and the law firm, except an agreement concerning benefits upon retirement. A lawyer who does so, individually or on behalf of a law firm, violates Rule 5.06(a).

The opinion does recognize that law firms have a legitimate reason for requiring “reasonable notice” of a lawyer’s planned departure because lawyers have an ethical obligation to ensure that any transition of a client’s legal matter is handled smoothly and protects the client’s interests.

Law firms have a legitimate basis for requiring reasonable notice of a lawyer’s planned departure. Firms have an obligation to ensure that client matters transition smoothly and the clients’ interests are protected. Law firms may therefore require reasonable notice of departure to assure that files are organized, impending deadlines met, and staffing adjusted to meet client needs.

Similarly, lawyers voluntarily leaving a firm abruptly may jeopardize client interests; therefore, they have an ethical obligation to attempt to avoid materially jeopardizing or disadvantaging those client matters for which they are personally responsible by the timing or manner of their departure. See, e.g., Rule 1.01(b) (“neglect” of legal matters). Although a legal services agreement is typically between a client and a law firm and not an individual lawyer in that firm, a lawyer handling a client matter has a lawyer-client relationship with that client and owes legal and ethical obligations to that client, including during the period leading up to the lawyer’s voluntary departure.

While firms can ethically mandate a “reasonable” minimum departure notice, the notice period cannot be “set in stone.” Rather, any notice period must be justifiable on a “fact-specific basis”:

Nevertheless, a law firm’s contractual minimum departure notice requirements must not conflict with Rule 5.06(a)’s prohibition against restrictions on a lawyer’s right to practice law. An excessive minimum notice period would have the effect of denying a lawyer’s right to leave and establish a new practice on a timely basis. Further, excessive minimum departure notice periods, beyond a period reasonably necessary to safeguard client interests, may have the effect of forcing clients to remain with the firm longer than the clients prefer, especially where the clients plan to move their representation to the departing lawyer’s new practice or do not wish to continue the current firm’s representation.

The correct answer is F.