Forfeiture-for-Competition Agreements

Law firms are constrained by professional ethics in how they address the issues of lawyer mobility. Rule 5.6 of the ABA Model Code of Professional Responsibility expressly prohibits lawyers from entering into agreements that restrict their right to practice, including covenants not to compete. The overwhelming majority of jurisdictions interpret the rule to preclude less direct restrictions on competition, including financial penalties known as 'forfeiture-for-competition' agreements.

40 minute read December 28, 2007 at 08:37 AM
By
Wayne N. Outten And Mark R. Humowiecki
Forfeiture-for-Competition Agreements

Lawyer mobility is at an all-time high. Every week, the New York Law Journal contains announcements of partners and entire practice groups leaving one firm to join another. More and more first-time partners joined their firms as lateral associate hires rather than right out of law school.

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