The Firm: Don't let breakup with firm leave client in limbo

By W. William Hodes The Daily Record Newswire You don't have to memorize rafts of statistics to know that lawyer mobility is far more common today than it was even 10 years ago. Depending on the size of the firm, the prominence of the departing attorney, the amount of work in progress and other factors, such as the costs incurred by the firm in training the leaving lawyer, a law firm breakup can mean anything from a manageable inconvenience to a major financial and organizational disaster. When a lawyer leaves a firm, one of the most critical issues is whether clients served by the departing lawyer will continue to be represented by that lawyer in his new venue, or whether they instead will be assigned another attorney from the original firm. That aspect of lawyer mobility has sometimes created bitter and unseemly duels over "ownership" of clients, especially if the client in question already has significant matters in the pipeline or is likely to have additional matters arising in the future. The firm typically claims that the client has been represented all along "by the firm," even though a particular lawyer has dealt with the client almost exclusively and has personally entered an appearance in a matter pending before a tribunal. On the other side, the departing attorney will point not only to the personal working relationship he has developed with the client, but also to the fact that the rules regulating ethical representation of clients are enforced only against individual lawyers in almost every jurisdiction. For that reason alone, a departing lawyer could not, even if he wanted to, simply drop a client like a hot potato and turn his affairs over to some other attorney at the firm. Instead, the lawyer will claim that there has been no change in representation of the client at all; he merely will inform the client (and the tribunal) of his new office address and write letters on different stationery. There is no way to determine a priori which of these competing views of client representation is correct in any situation. More important, neither is correct if it fails to take into account the client's point of view. Indeed, the starting point must be to inform the client of the impending change and to ensure that the client is given the opportunity to make an informed and unfettered choice. That is not only good practice and good client relations, but it is directly or indirectly mandated by several rules of professional conduct. At a minimum, the impending departure of a lawyer is a sufficiently momentous change in the status of a client's matter that the client must be informed of the situation, pursuant to ABA Model Rule 1.4 and its state counterparts. Second, because the formation (or continuation) of a lawyer-client relationship requires the assent of the client, it is the client who ultimately must decide whether to follow the departing attorney to his new practice setting, work with a new lawyer at the old firm or bring his business to a third firm. If a client decides to sever relations with a departing lawyer, that lawyer still has obligations under Rule 1.16 to ensure that the transition is made without harm to the client. In particular, a departing attorney must be assured that newly assigned counsel is attentive to any approaching court-imposed deadlines and should not formally withdraw his appearance until he is satisfied that substitute counsel has appeared in the case and is in control of the situation. Although personal relationships among lawyers are often strained in firm breakups, and the financial consequences of clients' choices can indeed be severe, it is not inevitable that the situation must devolve into a nasty fight. The most professional way to handle the scenario is for the attorney and the firm's management to communicate with each implicated client together. A joint letter can dispassionately explain what is happening and when, and offer to assist the client in choosing where to cast his lot. Failing that, it is perfectly proper for both sides separately to "solicit" the continuing business of the affected clients, either in writing or in person. Both the departing lawyer and the attorneys remaining at the firm will have had a sufficient "prior professional relationship" with the clients to trigger the exception to the no-solicitation rule codified in Model Rule 7.3. Of course, as with any communications regarding legal services, statements made must not be false or misleading, and the law of business torts and the law of fiduciary duty prevent lawyers who have been part of the same law firm from making unjustifiable disparaging statements about each other. Law firm breakups are often unpleasant for the lawyers involved, but handled properly they can at least provide an opportunity for affected clients to reassess the situation and possibly even empower them to achieve more favorable terms for their ongoing and future matters. Because advancing client interests must be the ultimate goal of all lawyers, that silver lining should not be dismissed as trivial. ---------- William Hodes is a solo practitioner who specializes in legal ethics and the law of lawyering. Based in Indianapolis and Lady Lake, Fla., he is professor emeritus of law at Indiana University, where he taught for 20 years. His website is www.hodeslaw.com. Published: Mon, Aug 29, 2011