I want to quit my law firm and take my clients with me. What ethical considerations are there in doing so?
There are few direct answers in the Louisiana Rules of Professional Conduct. However, several rules, ethics opinions, and other persuasive sources do provide some guidance to Louisiana lawyers who want to depart a law firm. See, e.g., ABA Formal Op. 99-414 (Sep. 1999); Ohio Bd. of Prof’l Conduct, Ohio Ethics Guide to Switching Law Firms (Dec. 2017); Restatement (Third) of the Law Governing Lawyers § 9 (2000) (“Law-Practice Organizations—In General”). Set forth below are some basic principles and general considerations for you, the departing lawyer:
- You don’t own your clients or their files. Neither does your soon-to-be “old” law firm. Your firm can’t impose any restrictions on your ability to “take” clients with you on departure. Indeed, every client has an absolute right to choose a lawyer and to obtain their file. See La. Rules of Prof’l Conduct r. 1.16(d).
- The extent to which you can make surreptitious preparations prior to departing is uncertain. On the one hand, the Restatement of Law Governing Lawyers suggests that simply “planning” to depart a firm by making “predeparture arrangements” such as “leasing space, printing a new letterhead, and obtaining financing” is not objectionable. On the other hand, “[t]he departing lawyer generally may not employ firm resources to solicit the client, [and] may not employ nonpublic confidential information of the firm against the interests of the firm in seeking to be retained by a firm client.” See Restatement (Third) of the Law Governing Lawyers § 9, cmt. i (2000). Furthermore, the Restatement notes that a departing lawyer may not “misuse firm resources (such as copying files or client lists without permission or unlawfully removing firm property from its premises) or take other action detrimental to the interests of the firm or of clients, aside from whatever detriment may befall the firm due to their departure.” Id.
- You should inform each client with whom you had “significant personal contacts”1 about your decision to leave, preferably in a joint letter with your “old” firm. If you contact any client of your old firm with whom you did not have a prior professional relationship, your contact may be impermissible solicitation. See La. Rules of Prof’l Conduct r. 7.4 (“Direct Contact with Prospective Clients”).
- The letter informing each client of your departure must be sent promptly and must not contain any false or misleading statements about you or your old firm. See La. Rules of Prof’l Conduct r. 1.4 (requiring reasonable communication); id. r. 7.2(c) (“A lawyer shall not make or permit to be made a false, misleading or deceptive communication about the lawyer, the lawyer’s services or the law firm’s services.”).
- The letter must make it clear to each client that the client has a choice and is neither “stuck” with you nor your former firm. It should inform each client about the status of the client’s matter. It should account to each client for any funds held in trust. It should give each client a deadline and a check-the-box selection form to return. It should provide contact information for you and a member of your old firm in case the client has questions. And finally, the letter should establish a default disposition if the client does not respond by the deadline (for example, the letter could inform the client that the file will “go” with you if the client does nothing).
- If you are joining a new law firm, you must evaluate whether any conflicts will exist between the clients that you will bring with you and any existing clients of the new firm. See La. Rules of Prof’l Conduct r. 1.7-1.10. If so, you must reevaluate your decision to associate with the firm or to bring a particular client with you. Note that under the Louisiana Rules of Professional Conduct, nonconsensual screening is not an option to avoid imputation of conflicts that may arise by joining a new firm. Compare La. Rules of Prof’l Conduct r. 1.10 with ABA Model Rules of Prof’l Conduct r. 1.10(a)(2).
- Remember that your departing firm will have an interest in being compensated for the work that you performed on each client’s file prior to your departure. On contingent-fee cases, that typically means that your old firm will have a quantum meruit claim for the value of services provided on the matter before you left. See Saucier v. Hayes Dairy Products, Inc., 373 So.2d 102 (La.1979) (a discharged lawyer is generally entitled to recover in quantum meruit for any services provided prior to termination); see generally Restatement of Law (Third) Governing Lawyers § 40 (2000). On hourly-fee cases, that typically means that your old firm will have a right to bill all of your unbilled time to the client.
- Finally, make absolutely sure that no clients or deadlines get lost in the shuffle. Both you and your old firm have a professional obligation to assure that every client is represented competently and diligently notwithstanding your departure. See La. Rules of Prof’l Conduct r. 1.1; id. r. 1.3.
- See ABA Formal Op. 99-414 (Sep. 1999). The significance of personal contacts should be judged from the perspective of the client. ↩