When and How Can Departing Lawyers Contact Clients?

The Mutual Duty to Notify

Most if not all jurisdictions recognize, at some point in the process, a mutual obligation on the part of the departing attorney and the old firm to notify clients that the attorney is leaving and to provide new contact information for the attorney. Through the satisfaction of this mutual duty, the client is able to exercise a meaningful choice ' to stay with the old firm, go with the departing lawyer, or move to a different firm.

As the highest court of Maryland stated in Attorney Grievance Comm'n. v. Potter, 380 Md. 128, 844 A. 2d 367 (2004):”The withdrawing attorney and the firm also have a duty to orderly maintain or transfer the clients' files in accordance with the clients' directions and to withdraw from representing those clients by whom they are discharged. Both the withdrawing attorney and the firm have a mutual duty, not only to the client, but to each other as well, to make certain that these tasks are completed in a competent and professional manner to the reasonable satisfaction of their client.”

The mutual obligation of the old firm and the departing attorney seems straightforward enough. But tricky questions persist. When in the process must clients be notified? Who are the “clients” to which notification must be sent? What should clients be informed when they are notified? In a perfect world, the old firm and the departing attorney would come to an agreement on all those questions. In the real world, that often doesn't happen. As a result, attorney grievance commissions, courts and even juries are often left with the task of drawing the lines on the groundrules underlying these issues. In the next sections of this article, I discuss some of these groundrules.

When in the Process Are Clients to Be Notified?

Absent agreement between the parties, when in the process are clients to be notified? The answer varies widely from jurisdiction to jurisdiction. Moreover, even within the same jurisdiction, the answer may be different depending upon the context.

A good example can be seen in Oregon Formal Opinion 2005-70. There, Oregon authorities noted that “[d]epending on the nature and status of Lawyer's work, this [fiduciary] duty [to the clients] may well mean that advance notification is necessary to permit the clients to decide whether they wish to stay with Firm A, to go with Lawyer to Firm B, or to pursue some other alternative.” On the other hand, while he remains on A's payroll, Lawyer also owes contractual, fiduciary, and/or agency duties to Firm A. Opinion 2005-70 notes that Lawyer could be sued by the firm, even when his ethical obligations dictated pre-departure notification, for trying to take clients while still affiliated with the firm. Moreover, the Lawyer could be subject to additional discipline for trying to take clients ' at least in Oregon ' if his or her “conduct would, under the circumstances, amount to fraud, deceit or misrepresentation that reflects adversely on the lawyer's fitness to practice law ' “

Other authorities come down differently on these issues, from the perspective of both potential civil liability and ethics rules. Some ' such as Section 9(3) of The Restatement of the Law Governing Lawyers (Third) ' state that the law firm must be notified before clients. Others ' including ABA Formal Opinion 99-414 ' state otherwise.

So what's a departing attorney to do? In some jurisdictions, such as Florida, ethics rules or decisions specifically address the procedures and protocols to be followed when attorneys change firms. Unless there is clear authority in your jurisdiction that provides a safe harbor to pursue a different strategy, however, a cautious attorney will tell the firm before he or she tells clients ' unless a client will be harmed if the firm isn't told first. In my opinion, factual scenarios where such client harm can actually be demonstrated are few and far between.

Who Can Be Notified?

Again, if the old law firm and the departing attorney can come to an agreement on who should be notified, a lot of uncertainty can be avoided. Otherwise, tricky questions need to be addressed. For example, in the absence of agreement between the parties, does the proper population include “current” as well as “former clients”? Must all clients of the firm be notified, or only those on which the departing has performed meaningful work?

According to ABA Formal Opinion 99-414 and most, if not all other authorities, only current clients need be notified. Moreover, authorities generally recognize that notification need only be provided to those current clients for which the departing attorney had been directly responsible in active and pending matters at the time of the departure. Indeed, an attorney who contacts a firm client for which he or she does not have a prior attorney-client or personal relationship may violate the ethics rules in many jurisdictions that regulate direct contact with a prospective client.

But that does not end the inquiry. Even if the departing attorney has done work in the past for a client, whether or not a matter is “active” is sometimes a close question. Two good examples arise in the trust and estates field and patent prosecution practices.

The Ethics Committee of the Maryland State Bar Association recently addressed the former in the July 2008 edition of the Maryland Bar Journal. That Committee's position employed an ad hoc, case-by-case approach to the issue. If the trust and estates practitioner prepared the documents, but had no ongoing responsibilities after the client executed everything, the Committee suggested that notification of departure was not required. Subtle factual differences, however, can lead to different conclusions.

For example, the terms of the engagement letter between the lawyer and the client could define the scope of the engagement in such a way that notification would be required. Similarly, if the attorney has retained original estate planning documents, is named as a personal representative or executor, or is granted a power of attorney, notification might also be required.

When the departing attorney specializes in patent prosecutions, notification also can be required even after the patent has been issued. Again, the terms of the engagement letter could require notification. Or, because of trigger dates arising in the U.S. Patent and Trademark Office after the original patent has been issued, the client may need to be notified. Of course, failure to notify the client could have both ethical and liability ramifications if a patent lapses because the client wasn't notified.

What Must Clients Be Told?

ABA Formal Opinion 99-414 provides helpful guidance on what clients should and shouldn't be informed when attorneys leave the firm. Citing a California ethics opinion, the ABA Opinion notes that joint notification by the lawyer and the firm is far preferable. When joint notification is not practical or feasible, though, the ABA Opinion states that the departing attorney should ordinarily send the notice.

The ABA Opinion goes on to identify the following guidelines on what the initial in-person or written communication to current clients should include:

• The communication can indicate the departing attorney's willingness and ability to continue handling matters on which the attorney is working, but cannot urge the client to sever its relationship with the old firm;
• The communication should clearly specify that the client has the ultimate right to decide who will complete or work on the matter; and
• The communication must not disparage the old firm.

As the ABA Opinion states, the departing attorney must make sure that the new firm would not have any disqualifying conflicts of interest, and also has the competence to handle the matter. Moreover, if the client asks for additional information ' such as billing rates and a description of the resources available at the new firm to handle the matter ' the departing lawyer must provide it. As the ABA Opinion emphasizes on p.6, though, “[t]he departing lawyer nevertheless must continue to make clear in these discussions that the client has the right to choose whether the firm, the departing lawyer and the new firm, or some other lawyer will continue the representation.”

In communicating with clients, both the departing attorney and the old firm must be mindful of the lawyer advertising rules. In communicating with clients about a breakup, statements that omit material facts of that unfairly compare the departing lawyer to the old firm, for example, are particularly susceptible to grievances. In the August 1997 edition of Bench & Bar of Minnesota, Kenneth L. Jorgensen provided some cogent examples of this issue. Stating that “I'm the only attorney who knows anything about your case,” for example, can be problematic if billing statements reflect services performed by other firm lawyers. As another example, informing the client that “I'm the only lawyer from the old firm who practices in this area of law” can be grievable when the lawyer had told other clients that an associate at the old firm was quite capable and competent to handle a particular matter in the same area of law.

Conclusion

As long as lawyers continue to change law firms as frequently as they do, the prudent firm will continue to employ centralized systems to oversee these issues. Typically, the attorneys who interface through these systems with the departing lawyer will include someone versed in ethics rules, as well as someone from the departing lawyer's practice group and the attorney responsible for overseeing firm liability issues. Ideally, these attorneys will be able to collaborate with the departing lawyer to reach agreement on when to notify clients and what to say. In a perfect world, this agreement may even result in a communication that will please the marketing departments of both the old firm and the new firm of the departing attorney. But even if the departure is bitter and hotly contested, prudent firms and attorneys will remember that, when the rubber meets the road, we all have an ethical obligation to keep the needs of the client as our highest priority.

Jeffrey P. Ayres, a member of this newsletter's Board of Editors, is a partner at Venable LLP, with offices in New York, California, Washington, DC, Maryland, and Virginia. For many years, Mr. Ayres has chaired Venable's Ethics Committee. He regularly advises management (including law firms) on ethics and employment issues. He can be reached at [email protected].

Lawyers come and lawyers go. That's a fact of life in today's law firm. Whether they are rainmakers or foot soldiers, business generators in all industries ' from commercial real estate agents to pharmaceutical salesmen ' create myriad legal issues when they change employers. So why should law firms be any different?

Recent editions of Law Firm Partnership & Benefits Report have addressed various topics on this subject. In January 2008, for example, Wayne N. Outten and Mark R. Humowiecki published an article entitled Forfeiture-For-Competition Agreements. In June 2007, Mr. Outten and Cara E. Greene published Jumping Ship (and Taking the Crew): Can Law Firm Partners Solicit Their Firms' Employees? The article herein addresses the related questions of when and how can departing lawyers contact clients.

Clients (especially ones with the ability and willingness to pay) are the lifeblood of every law firm. That's why I say that the process through which clients decide to stay with the old firm or leave with the departing attorney are where the proverbial rubber meets the road. Because dollars and livelihoods are at stake, no matter how “friendly” a departure may seem to be on the surface, contacting clients always gets people excited. Sometimes, relationships deteriorate to levels reached only in the most bitter of marital or business divorces. In this article, I will discuss the ethical issues, which arise in collegial as well as vitriolic contexts, surrounding the contact of clients by departing attorneys.

The Mutual Duty to Notify

Most if not all jurisdictions recognize, at some point in the process, a mutual obligation on the part of the departing attorney and the old firm to notify clients that the attorney is leaving and to provide new contact information for the attorney. Through the satisfaction of this mutual duty, the client is able to exercise a meaningful choice ' to stay with the old firm, go with the departing lawyer, or move to a different firm.

As the highest court of Maryland stated in Attorney Grievance Comm'n. v. Potter , 380 Md. 128, 844 A. 2d 367 (2004):”The withdrawing attorney and the firm also have a duty to orderly maintain or transfer the clients' files in accordance with the clients' directions and to withdraw from representing those clients by whom they are discharged. Both the withdrawing attorney and the firm have a mutual duty, not only to the client, but to each other as well, to make certain that these tasks are completed in a competent and professional manner to the reasonable satisfaction of their client.”

The mutual obligation of the old firm and the departing attorney seems straightforward enough. But tricky questions persist. When in the process must clients be notified? Who are the “clients” to which notification must be sent? What should clients be informed when they are notified? In a perfect world, the old firm and the departing attorney would come to an agreement on all those questions. In the real world, that often doesn't happen. As a result, attorney grievance commissions, courts and even juries are often left with the task of drawing the lines on the groundrules underlying these issues. In the next sections of this article, I discuss some of these groundrules.

When in the Process Are Clients to Be Notified?

Absent agreement between the parties, when in the process are clients to be notified? The answer varies widely from jurisdiction to jurisdiction. Moreover, even within the same jurisdiction, the answer may be different depending upon the context.

A good example can be seen in Oregon Formal Opinion 2005-70. There, Oregon authorities noted that “[d]epending on the nature and status of Lawyer's work, this [fiduciary] duty [to the clients] may well mean that advance notification is necessary to permit the clients to decide whether they wish to stay with Firm A, to go with Lawyer to Firm B, or to pursue some other alternative.” On the other hand, while he remains on A's payroll, Lawyer also owes contractual, fiduciary, and/or agency duties to Firm A. Opinion 2005-70 notes that Lawyer could be sued by the firm, even when his ethical obligations dictated pre-departure notification, for trying to take clients while still affiliated with the firm. Moreover, the Lawyer could be subject to additional discipline for trying to take clients ' at least in Oregon ' if his or her “conduct would, under the circumstances, amount to fraud, deceit or misrepresentation that reflects adversely on the lawyer's fitness to practice law ' “

Other authorities come down differently on these issues, from the perspective of both potential civil liability and ethics rules. Some ' such as Section 9(3) of The Restatement of the Law Governing Lawyers (Third) ' state that the law firm must be notified before clients. Others ' including ABA Formal Opinion 99-414 ' state otherwise.

So what's a departing attorney to do? In some jurisdictions, such as Florida, ethics rules or decisions specifically address the procedures and protocols to be followed when attorneys change firms. Unless there is clear authority in your jurisdiction that provides a safe harbor to pursue a different strategy, however, a cautious attorney will tell the firm before he or she tells clients ' unless a client will be harmed if the firm isn't told first. In my opinion, factual scenarios where such client harm can actually be demonstrated are few and far between.

Who Can Be Notified?

Again, if the old law firm and the departing attorney can come to an agreement on who should be notified, a lot of uncertainty can be avoided. Otherwise, tricky questions need to be addressed. For example, in the absence of agreement between the parties, does the proper population include “current” as well as “former clients”? Must all clients of the firm be notified, or only those on which the departing has performed meaningful work?

According to ABA Formal Opinion 99-414 and most, if not all other authorities, only current clients need be notified. Moreover, authorities generally recognize that notification need only be provided to those current clients for which the departing attorney had been directly responsible in active and pending matters at the time of the departure. Indeed, an attorney who contacts a firm client for which he or she does not have a prior attorney-client or personal relationship may violate the ethics rules in many jurisdictions that regulate direct contact with a prospective client.

But that does not end the inquiry. Even if the departing attorney has done work in the past for a client, whether or not a matter is “active” is sometimes a close question. Two good examples arise in the trust and estates field and patent prosecution practices.

The Ethics Committee of the Maryland State Bar Association recently addressed the former in the July 2008 edition of the Maryland Bar Journal. That Committee's position employed an ad hoc, case-by-case approach to the issue. If the trust and estates practitioner prepared the documents, but had no ongoing responsibilities after the client executed everything, the Committee suggested that notification of departure was not required. Subtle factual differences, however, can lead to different conclusions.

For example, the terms of the engagement letter between the lawyer and the client could define the scope of the engagement in such a way that notification would be required. Similarly, if the attorney has retained original estate planning documents, is named as a personal representative or executor, or is granted a power of attorney, notification might also be required.

When the departing attorney specializes in patent prosecutions, notification also can be required even after the patent has been issued. Again, the terms of the engagement letter could require notification. Or, because of trigger dates arising in the U.S. Patent and Trademark Office after the original patent has been issued, the client may need to be notified. Of course, failure to notify the client could have both ethical and liability ramifications if a patent lapses because the client wasn't notified.

What Must Clients Be Told?

ABA Formal Opinion 99-414 provides helpful guidance on what clients should and shouldn't be informed when attorneys leave the firm. Citing a California ethics opinion, the ABA Opinion notes that joint notification by the lawyer and the firm is far preferable. When joint notification is not practical or feasible, though, the ABA Opinion states that the departing attorney should ordinarily send the notice.

The ABA Opinion goes on to identify the following guidelines on what the initial in-person or written communication to current clients should include:

• The communication can indicate the departing attorney's willingness and ability to continue handling matters on which the attorney is working, but cannot urge the client to sever its relationship with the old firm;
• The communication should clearly specify that the client has the ultimate right to decide who will complete or work on the matter; and
• The communication must not disparage the old firm.

As the ABA Opinion states, the departing attorney must make sure that the new firm would not have any disqualifying conflicts of interest, and also has the competence to handle the matter. Moreover, if the client asks for additional information ' such as billing rates and a description of the resources available at the new firm to handle the matter ' the departing lawyer must provide it. As the ABA Opinion emphasizes on p.6, though, “[t]he departing lawyer nevertheless must continue to make clear in these discussions that the client has the right to choose whether the firm, the departing lawyer and the new firm, or some other lawyer will continue the representation.”

In communicating with clients, both the departing attorney and the old firm must be mindful of the lawyer advertising rules. In communicating with clients about a breakup, statements that omit material facts of that unfairly compare the departing lawyer to the old firm, for example, are particularly susceptible to grievances. In the August 1997 edition of Bench & Bar of Minnesota, Kenneth L. Jorgensen provided some cogent examples of this issue. Stating that “I'm the only attorney who knows anything about your case,” for example, can be problematic if billing statements reflect services performed by other firm lawyers. As another example, informing the client that “I'm the only lawyer from the old firm who practices in this area of law” can be grievable when the lawyer had told other clients that an associate at the old firm was quite capable and competent to handle a particular matter in the same area of law.

Conclusion

As long as lawyers continue to change law firms as frequently as they do, the prudent firm will continue to employ centralized systems to oversee these issues. Typically, the attorneys who interface through these systems with the departing lawyer will include someone versed in ethics rules, as well as someone from the departing lawyer's practice group and the attorney responsible for overseeing firm liability issues. Ideally, these attorneys will be able to collaborate with the departing lawyer to reach agreement on when to notify clients and what to say. In a perfect world, this agreement may even result in a communication that will please the marketing departments of both the old firm and the new firm of the departing attorney. But even if the departure is bitter and hotly contested, prudent firms and attorneys will remember that, when the rubber meets the road, we all have an ethical obligation to keep the needs of the client as our highest priority.

Jeffrey P. Ayres, a member of this newsletter's Board of Editors, is a partner at Venable LLP, with offices in New York, California, Washington, DC, Maryland, and Virginia. For many years, Mr. Ayres has chaired Venable's Ethics Committee. He regularly advises management (including law firms) on ethics and employment issues. He can be reached at [email protected].