May 01, 2022

Ethical Obligations for Lawyers on the Move

Whether moving to another organization or retiring, succession planning and preparation will ensure you meet your obligations to your clients and employers.

Mark C. Palmer
The best transitions are driven by an attorney’s ethical obligations to their clients and the organization.

The best transitions are driven by an attorney’s ethical obligations to their clients and the organization.

RobertoDavid / Getty Images

The legal profession is not immune to the Great Resignation and is experiencing fluctuations in its workforce while the world continues to live and work at a distance. Whether you are making a lateral move to another organization or opting for retirement, succession planning and preparation are essential in meeting your ethical requirements as a lawyer. Legal organizations and attorneys alike must safeguard the interests of their clients regardless of the reason behind a transfer of talent.

Leaving a law firm, legal department or any legal organization demands attention and planning. But don’t be discouraged or overwhelmed. By following the ethical rules and meeting your obligations to your clients and employer, you’ll be able to find comfort and security moving into retirement or the next chapter of your career.

Consult the rules and contract

A good lawyer first turns to the statute or rules. In planning for a departure, include a review of your Model Rules of Professional Conduct, case law and ethical opinions. Additionally, the organization’s partnership, shareholder or employment agreement likely has obligations to be followed and met.

Supporting your clients’ best interests while avoiding conduct that could be a breach of the duty of loyalty to the organization can become challenging. Many of the opinions interpreting and emphasizing these ethical obligations turn on how to communicate with clients and ensure their interests are represented properly during any transition period.

When conducting your client-focused departure, you should bear in mind key ethical requirements. Assure that clients’ matters will not be adversely impacted, and that representation is competent, reasonably diligent and prompt (ABA Model Rules 1.1, 1.3).

Be sure to promptly inform clients of your departure from the firm and keep them informed about the status of their matters. Clients must be consulted about their absolute right to counsel of their choosing, whether that is the departing lawyer, the firm or neither (Model Rule 1.4).

The departing lawyer and the firm must ensure that confidential client information is not revealed (Model Rule 1.6). When assessing possible conflicts of interest (Model Rules 1.7, 1.9 and 1.10), assure that the duties of loyalty and confidentiality owed to current and former clients will not be compromised and that all reasonable steps will be taken to protect clients’ interests as the lawyer or firm withdraws (Model Rule 1.16).

Situations like this frequently implicate the rules relating to solicitation of clients. The lawyer and firm must be sure that adequate and accurate information is provided to assist clients in making an informed decision about choosing counsel, free from the possibility of undue influence, intimidation and overreaching (Model Rules 7.1–7.3).

Finally, avoid conduct involving dishonesty, fraud, deceit or misrepresentation toward clients and between members of the organization in connection with the withdrawal (Model Rule 8.4).

In addition to checking ethics opinions in your jurisdiction, several ABA Formal Opinions may provide guidance, including Formal Opinion 99-414, Ethical Obligations When a Lawyer Changes Firms; Formal Opinion 09-455, Disclosure of Conflicts Information When Lawyers Move Between Law Firms; and Formal Opinion 489, Obligations Related to Notice When Lawyers Change Firms. These materials may help determine what steps you need to take to formulate your game plan. Determine how you’re going to best protect your interests and the interests of your clients and meet your obligations to the firm you’re exiting, while following the ethical rules and adhering to any contractual constraints.

Building your exit plan

In establishing when and how a lawyer will depart an organization, the paramount rule is to keep your clients’ interests ahead of all others. Clients are the gatekeepers in controlling who acts as their counsel.

For example, you do not have the authority to make deals or barter on which client files will stay or go with you, as if they are bargaining chips. The Model Rules and related comments make clear that a client has a right to discharge a lawyer at any time, with or without cause, subject to liability for payment for the lawyer’s services. Nor are clients “merchandise.” The Missouri Supreme Court clarified in 1997 that clients “cannot be bought, sold, or traded. The attorney-client relationship is personal and confidential, and the client’s choice of attorneys in civil cases is near absolute.”

The duty to your clients runs parallel to your fiduciary duty to the organization. Lawyers who are preparing to leave a law firm face a dilemma: They’re caught between fiduciary obligations to their firm and a duty to adequately represent clients who choose to remain with them. For example, may a lawyer announce their impending departure to clients before the firm is told? ABA Formal Ethics Opinion 489 encourages firms to have written policies that set forth mutual expectations in facilitating the departure of lawyers and the transition of clients. ABA Formal Ethics Opinion 99-414 states it is ethically permissible for a departing lawyer to notify current clients before advising the firm of their intention to leave. Illinois is one state that takes a similar position, adding that “ideally” client communication would take place after the firm is notified.

Other jurisdictions place the fiduciary duty to the organization at the forefront. For example, Ohio Supreme Court Ethics Opinion 98-5 advised that departure should be discussed between the firm and departing lawyer before the client is informed, and Florida Rule of Professional Conduct 4-5.8(c)(1) prohibits a departing lawyer from contacting clients until after a good faith effort at joint notice with the firm is made. Likewise, the Pennsylvania and Philadelphia Joint Ethics Opinion 2007-300 reaffirmed their position that the prudent approach is to not notify clients until the firm has been informed. The opinion goes on to say, “The timing of notice should be fair and reasonable under all of the circumstances. From the perspective of notice to the old firm, the notice should be timed to enable the old firm to discharge its ethical obligations in a responsible and orderly way while facilitating client freedom of choice in the selection of counsel.”

An attorney leaving on short notice, or an attorney’s concealment of the decision to withdraw, may be a basis for a breach of fiduciary duty claim if the firm can show that the deception caused damage to the firm. The departing attorney may be free to make certain logistical arrangements prior to giving notice, such as obtaining office space, furniture and even financing for a new firm, while other actions detrimental to the old firm or clients are impermissible. While there is no bright-line test, it is reasonable to assume an attorney may take steps in preparing to compete in a new job, while not beginning to engage in competition before departing.

In summary, both the departing lawyer and the firm have ethical obligations to the clients. Just as the departing lawyer is obligated to communicate the move to the client, the firm must not impede the lawyer’s ability to diligently represent the client. Thus, a mutually agreeable game plan between the lawyer and the firm would best facilitate a smooth and ethical transition.

Giving notice beyond the firm

The best practice is to formulate a joint letter to your clients from you and the old firm, which would be communicated immediately upon or after your departure. This serves at least four goals:

  1. It provides prompt notice to your clients of the change in employment.
  2. It communicates cooperation between you and your old firm.
  3. It bifurcates the attorney-firm relationship for the client, so they may better determine how current and future matters are handled.
  4. If done so after your departure, it helps protect you from claims of improper client solicitation moving forward.

A joint letter assumes cooperation and compliance with your old firm upon departure, and that may not always be the case. So, if notice is given before your departure, extra care is warranted.

The emphasis must remain on giving your clients alternatives for future representation. ABA Formal Opinion. 99-414 provides more details and suggestions. The notice should be limited to clients whose active matters the lawyer has direct professional responsibility for at the time of the notice (i.e., current clients). The departing lawyer should not urge the client to sever their relationship with the firm but may indicate a willingness and ability to continue their responsibility for the matters upon which they are currently working. The departing lawyer must make clear that the client has the ultimate right to decide who will complete or continue the matters.

Additionally, you must, at the direction of your clients, consider how you might proceed or withdraw from pending litigation, depositions, hearings, transactions; activity before courts or other entities; and activity that involves opposing counsel and other parties. Where appropriate, request and communicate all continuances or substitutions of counsel (as allowed in certain cases) and follow up if court-ordered confirmation is needed (Rules 1.16-1.17).

Aside from notice to clients and handling pending matters, be aware of your jurisdiction’s requirements for updating attorney contact information. This may range from state registration agencies or bar associations to local courthouses or court clerk offices. Federal and state electronic court filing services may need updating.

You may need to make similar changes for the dissolution, modification or formation of a related business entity as well.

File management

Client obligations don’t walk out the door when a lead attorney departs. This includes the contents of a client’s files and their property remaining with the firm. Be mindful that an attorney may not take possession of client files without the client’s consent. Even when the client requests to have the file transferred with the departing attorney, the file should not be removed until the firm has been given notice—and the opportunity to copy the file, if appropriate. Likewise, the firm must continue to provide the attorney with reasonable access to the file to protect the client’s interests. Whether it is the transfer of a client’s file or returning of their property or unearned funds, it’s advisable to document the process with written authorizations and acknowledgment forms to be signed by the client. Check with your lawyer regulation agency or bar practice management advisor for further rules, information and templates.

File retention

ABA Model Rule 1.15(a) requires that “[c]omplete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of [five years] after termination of the representation.” However, the designated period may vary by jurisdiction.

Also, look to statutory or other requirements outside of your ethics rules that require additional records to be maintained. For example, in Illinois a lawyer is required by Supreme Court Rule to maintain for an indefinite period the name and last known address of each client and reflect whether the client’s representation is active or concluded; in addition, all financial records related to the lawyer’s practice must be maintained for not less than seven years. Financial records include bank statements, time and billing records, checks, check stubs, journals, ledgers, audits, financial statements, tax returns and tax reports.

Lasting impressions

Planning for and processing a departure is often a stressful time full of professional and personal challenges for all those involved. However, the best transitions are driven by an attorney’s ethical obligations to their clients and the organization, which should be the foundation of all decision-making. Preparation will help address difficult ethical decisions while maintaining a professional, courteous and civil attitude toward all persons involved. As a new chapter begins—for the lawyer, the firm and the client—you’ll be headed in the right direction.

Mark C. Palmer

Chief Counsel, Illinois Supreme Court Commission on Professionalism

Mark C. Palmer is chief counsel of the Illinois Supreme Court Commission on Professionalism. mark.palmer@2civility.org

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