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    June 07, 2019 Articles

    Ethical Considerations Before Switching Firms

    Lawyers who switch firms need to put their clients first.

    By Chris Weber

    I am fortunate to have worked at Kegler Brown Hill + Ritter my entire 27-year legal career, now serving as managing director of the same firm for which I clerked during law school. However, many attorneys will not have the same experience and will, for any of a variety of reasons, move from one law firm to another. In this article, I will consider the important ethical considerations that both the departing lawyer and law firm must consider when lawyers move firms, including notifying clients, deferring to clients’ wishes, protecting client confidentiality while avoiding conflicts of interest, and payment (or repayment) of fees.

    The discussion that follows in this article will reference provisions of the Ohio Rules of Professional Conduct (which are modeled on the ABA Model Rules of Professional Conduct). Readers should consult the rules of professional conduct in their own jurisdiction when considering these issues in their own firm or practice. 

    Lawyer Mobility: A Common Phenomenon

    Lawyers can and do switch firms. According to a 2004 American Bar Association Survey, more than one-third of lawyers responding had changed jobs at least once within three years after law school; 53 percent of lawyers had changed practice settings by the time they had been in practice seven years.

    It is important to note that while it is certainly inconvenient for a law firm when an attorney leaves, firms cannot impede a lawyer’s ability to continue to practice law after they leave. According to Rule 5.6 of the Ohio Rules of Professional Conduct (RPC), “[a] lawyer shall not participate in offering or making . . . a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship. . . .”

    Notification of Clients

    Ohio RPC 1.4 requires lawyers to keep clients informed about the status of their matter so that clients can make informed choices. A lawyer’s decision to leave a firm is an issue about which a client should be informed: the law firm and the lawyer must inform any clients with active matters for whose representation the lawyer is responsible or plays a principal role so that those clients can choose who will manage their legal work following the lawyer’s departure.

    Determining whether the departing lawyer has the type of relationship with a client that warrants notification can sometimes be tricky and is often best answered by determining what the client would say if asked, “Who at the firm represents you?”

    When and how that client notification takes place is not always clear either and may differ from state to state. The best option for “when” is after the departing lawyer has notified the law firm. As to “how,” there are a couple of options. The preferred method for notifying clients is a joint letter from the departing lawyer and the firm that informs clients of the lawyer’s departure and its timing; the status of their matters; the treatment of any fees held on deposit; and the client’s representation options, including staying with the firm, leaving with the attorney, or finding new counsel entirely. In situations where joint letters are not an option for whatever reason, both the departing lawyer and the firm often send separate letters to the same clients. These letters must be careful not to be disparaging to either the departing firm or the lawyer and must be even more careful not to violate RPC 7.3 and improperly encourage the client to choose one option over the other.

    Deference to Clients’ Wishes

    It is important for both the firm and the departing lawyer to cooperate with the client’s choice of representation, whether that choice is to leave with the departing lawyer or stay with the firm.

    Let’s say that the client decides to go with the departing lawyer. This most likely will be bad news for the firm, perhaps piled on top of losing a skilled lawyer. However, a firm should avoid holding the client hostage by refusing to transfer client information and files. The firm should cooperate in the file transfer, even bearing the expense to do so. The firm should also allow the departing lawyer to access the firm’s records and should provide the lawyer’s new contact information to clients. A firm should not turn off a lawyer’s email once that lawyer has departed—clients may still send email to that email address. The departing lawyer’s account should be monitored, and emails should be forwarded appropriately.

    Departing lawyers need to be careful about what they take with them and avoid taking firm client lists or other firm property, including the firm’s financial data. The firm may allow the departing lawyer to take her own work product, published articles, etc., but it is a good idea for an attorney to ask first, just in case.

    If a client decides to stay with the firm, the departing lawyer must leave behind work related to that client’s matters and any other material connected to the relationship. The same advice applies to lawyers as it does to firms: don’t try to hold the client hostage. Be transparent throughout the exit process; and remember, above all, that clients’ interests are paramount and must be protected.

    Conflict Avoidance

    Client confidentiality must be protected before, during, and after the lawyer departure process.

    As part of due diligence, some disclosures must be made when a lawyer interviews with another firm to make sure that conflicts are avoided. Ohio RPC 1.6(b)(7) allows for some limited information to be disclosed in this situation, even without client consent, including the identities of clients or other involved parties and a brief summary of the general issues involved and whether the matter is ongoing.

    However, attorney-client privileged information, information that might be detrimental or embarrassing to the client, and information that the client has requested to remain confidential must not be disclosed.

    Both the new and former firms must be aware of possible conflicts of interest, especially in “side-switching” situations where the departing lawyer becomes associated with a new firm whose client is adverse to the departing lawyer’s former client.

    Fees

    When a lawyer leaves and the client leaves with the lawyer, sometimes there are still fees yet to be paid. The firm deserves to be paid for its past work. In contingent fee situations, a quantum meruit theory of recovery is typically used in order for the former firm to be compensated for past services rendered should the contingency be satisfied.

    On the other hand, any unearned fees held in trust at the time of the client’s departure should be returned to the client.

    Conclusion

    Lawyers who switch firms need to put their clients first, whether or not those clients stay or go. There are a multitude of issues to navigate, but all sides need to be as transparent as possible and work together to create a smooth transition that causes as little disruption as possible to the client.

    There are resources available for both lawyers and firms to consult on this issue, including ABA Formal Opinion No. 99-414 and Ohio Ethics Guide: Switching Firms (Ohio Board of Professional Conduct 2017).

    Chris Weber is the managing director at Kegler Brown Hill + Ritter in Columbus, Ohio. 

    Copyright © 2019, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).