For most lawyers, the days of spending your entire legal career at the same law firm are over. Indeed, many lawyers move law firms at least once or twice during the first three to five years of practice. When leaving a firm, a lawyer must address certain ethical and professional considerations to ensure he or she handles the transition smoothly.
Switching Law Firms
There are few direct answers in the Louisiana Rules of Professional Conduct about the ethics of switching law firms. 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.
Switching Sides
The newly hired lawyer who will handle the same type of cases as his prior employment, but will now be on the “other side of the v” from his former client, must be careful not to engage in a representation involving a conflict of interest. After termination of a client-lawyer relationship, a lawyer has continuing duties with respect to confidentiality and loyalty and thus may not represent another client except in conformity with Louisiana Rules of Professional Conduct Rule 1.9. That rule provides as follows:
(a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.
(b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client
(1) whose interests are materially adverse to that person; and
(2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing.
(c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:
(1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or
(2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.
See La. Rules of Prof’l Conduct, r. 1.9.
Under paragraph (a), the new firm could not be materially adverse to the lawyer’s former client on any matter that is the “same or a substantially related” to one that the newly-hired lawyer personally handled at his former firm for that same client. If applicable, this rule would disqualify not only the new lawyer, but also the entire new firm from handling any “same or substantially related” matter. This conflict is “waivable” through obtaining the informed consent confirmed in writing of each affected client (both past and present).
Even as to matters that the newly-hired lawyer did not personally handle at this former firm, paragraph (b) would disqualify him, and by imputation the new firm, from any matter as to which the lawyer possesses “water cooler knowledge,” that is, actual knowledge of confidential information protected by Rules 1.6 and 1.9(c). See La. Rules of Prof’l Conduct, r. 1.6; id. r. 1.9. Application of paragraph (b) depends on a situation’s particular facts, aided by inferences, deductions or working presumptions that reasonably may be made about the way in which lawyers work together. A lawyer may have general access to files of all clients of a law firm and may regularly participate in discussions of their affairs; it should be inferred that such a lawyer in fact is privy to confidential information about all the firm’s clients. In contrast, another lawyer may have access to the files of only a limited number of clients and participate in discussions of the affairs of no other clients. In the absence of information to the contrary, it should be inferred that such a lawyer in fact is privy to information about the clients actually served but not those of other clients. This conflict is “waivable” through obtaining the informed consent confirmed in writing of each affected client (both past and present).
Paragraph (c) prohibits the newly-hired lawyer from using or revealing confidential information to the disadvantage of a former client. See La. Rules of Prof’l Conduct, r. 1.9(c). However, the fact that the lawyer once represented a client does not preclude the lawyer from using “generally known” information about that client when later representing another client.
Conclusion
Law firms should certainly consider hiring a new lawyer who previously worked on matters for a client that is currently adverse to the law firm. Likewise, lawyers should also explore employment opportunities with law firms which are currently adverse to his current client. However, the firm and the lawyer must assure either that no former-client conflicts exist or that any that do exist are “waived” through informed consent.
