January 29, 2020 Articles

A Red Line at Last: ABA Formal Opinion 489 (2019)

Law firms must now take care to enable that process to happen smoothly, without overreaching or coercion—or risk the consequences.

By Ronald C. Minkoff

As the business environment in which law firms operate becomes more competitive, lawyer movement from one firm to another has become more fraught. Law firms have revised their partnership and shareholder agreements to discourage partners from leaving. They have implemented longer notice periods, extended the time period for return of capital, restricted departing partners’ ability to notify and/or solicit clients, and have even restricted departing partners’ access to firm email systems—all to discourage these partners from competing.

Is any of this ethical? Mostly, no. In ABA Formal Opinion 489, issued on December 4, 2019, the ABA Standing Committee on Ethics and Professional Responsibility drew a red line prohibiting some of these anti-competitive practices. It addressed four important areas, many for the first time:

Premium Content For:
  • Litigation Section
Join - Now