July 16, 2014 – This month’s Ethical Dilemmas question focuses on differing scenarios of a lawyer taking leave of a firm and how to ensure you are meeting your ethical responsibility your clients.
I am leaving my current law firm and starting my own practice. I would like to personally call my current clients, rather than write them a letter, to tell them. Is that permissible? Do I need to tell my firm before I tell my clients?
Under SCR 20:1.4(a)(3), a lawyer has a duty to keep current clients reasonably informed about the status of their matters. The departure of a lawyer who has primary or substantial responsibility for a client’s matter is a significant event in the representation that impacts the client’s right to choose his or her own counsel. Consequently, a departing lawyer has an ethical duty to notify current clients of the lawyer’s departure. This responsibility is shared by the firm. This is not to say that every current client of a departing lawyer must receive two notices – one from the lawyer and one from the firm. This simply means that a both the firm and the departing lawyer have an ethical duty to ensure that the affected clients receive timely notice.
Have an Ethical Dilemma?
Ethical dilemmas affect every lawyer’s practice. This series of questions and answers appears each month in InsideTrack. The answers, offered by the State Bar’s ethics counsel org tpierce wisbar Timothy Pierce and assistant ethics counsel org akaiser wisbar Aviva Kaiser, are intended to provide guidance only and are not legal authority. Each situation will depend on the facts and circumstances involved.
Perhaps the best way to protect clients’ interests is for the departing lawyer and her law firm to give joint notice of the lawyer's impending departure to all current clients for whom the lawyer has performed significant professional services while at the firm. Unfortunately, this is not always feasible when the departure is not amicable. When the departing lawyer reasonably anticipates that the firm will not cooperate on providing such a joint notice, she herself must provide notice to those clients for whose active matters she currently is responsible or plays a principal role in the delivery of legal services, and preferably should confirm the conversations in writing so as to memorialize the details of the communication and her compliance with SCR 20:7.3 and 7.1.
There is no required format for the notice to clients, although both the lawyer and the firm are well advised, for their own protection, to provide the notice in writing.
Any initial in-person or written notice informing clients of the departing lawyer's new affiliation that is sent before the lawyer's resigning from the firm should be limited to clients whose active matters the lawyer has direct professional responsibility at the time of the notice (i.e., the current clients). The notice generally should conform to the following guidelines:
The notice should contain the fact of and the date of the lawyer’s departure from the firm;
The departing lawyer should not urge the client to sever its relationship with the firm, but may indicate the lawyer's willingness and ability to continue her responsibility for the matters upon which she currently is working;
The notice should make clear that the client alone has the right to decide whether to follow the departing lawyer, remain with the firm, or seek other counsel; and
The notice should be neutral in tone, must not disparage the lawyer’s former firm and must not contain any false, misleading, or deceptive statements.
Such notice to current clients of the departing lawyer is not impermissible solicitation. SCR 20:7.3(a)(2) explicitly allows a lawyer to solicit, in-person or by telephone, professional employment from persons with whom the lawyer has a prior professional relationship, and a lawyers’ present professional relationship also allows for such solicitation. Such in-person or telephonic solicitation is not permitted, however, with respect to person with whom the lawyer has no professional relationship.
There is nothing in the Rules of Professional Conduct that requires the lawyer to provide notice to the lawyer’s firm before providing notice to current clients. As noted above, the notice to clients is not impermissible solicitation, and it is necessary to fulfill the lawyer’s duty to communicate with the clients. A lawyer does not violate any other Rules by providing notice to clients first.
That being said, other bodies of law may pose hazards for the departing lawyer if the lawyer actively solicits clients prior to notifying the firm. There is case law from other jurisdictions finding viable civil causes of action against departing lawyers for soliciting firm clients before notifying the firm of the lawyer’s departure.1 These cases are based upon bodies of law other than legal ethics, such as agency, partnership, contracts, business torts and property, usually deal with fairly egregious facts and tend to draw a distinction between “notice” and “solicitation.”2
It is also worth noting that the Restatement (Third) of the Law Governing Lawyers, §9, takes the position that a departing lawyer may not “solicit” clients until providing adequate and timely notice to the firm. It is unlikely, however, that a lawyer simply notifying clients, in a neutral manner, of the lawyer’s pending departure runs much risk of civil liability.
Because there is some tension between the law of “ethics,” as defined by the Rules of Professional Conduct, and other bodies of civil law, the safest course for the departing lawyer is notify the firm before notifying clients, but the Rules of Professional Conduct do not mandate this course.
1 See e.g. Shein v. Myers, 394 Pa. Super. 549, 576 A.2d 985 (Pa. 1990); Siegel v. Arter & Hadden, 85 Ohio St. 3d 171, 707 N.E. 853 (Ohio Sup. Ct. 1999); Dowd & Dowd v. Gleason, 181 Ill.2d 460, 693 N.E.2d 358 (Ill. 1998); Meehan v. Shaughnessy, 404 Mass 419, 535 N.E.2d 1255 (1989); Graubard, Mollen, Dannett & Horowitz v. Moskovitz, 653 N.E.2d 1179 (N.Y. 1995).
2 This distinction is usually framed as the difference between telling a client “I’m leaving this firm” and “I’m leaving this firm, and I would like you to commit to come with me to my new firm.”