As some lawyers face deteriorating health or other issues that prompt them to consider leaving the profession, an obvious question presents itself.
Lawyers who retire from large firms normally receive some continuing compensation, a portion of which could be called “work in process,” etc. Any good will that they created during their career is absorbed back into the firm. In sharp contrast, sole practitioners work their entire careers to build up a valuable reputation and potentially lucrative client relationships. Such lawyers lose all of this value if they just walk away. Is there any way that such lawyers can extract this value?
States traditionally prohibited lawyers from obtaining compensation for good will by “selling” their practice when retiring from the practice of law. In 1945, the ABA strongly condemned such a step. The ABA specifically indicated that a lawyer’s purchase of the practice and good will of a deceased lawyer who was not his or her partner violated one ABA Canon and might violate two others. ABA Comm. on Prof’l Ethics & Grievances, Formal Op. 266 (1945).