By Daniel J. Siegel
The frequency with which lawyers change firms continues to have a dramatic impact on the profession. The increasing mobility also means that more law firms are “downsizing,” dissolving, or splitting into smaller, separate firms, or unfortunately closing. While in the past attorneys’ entire careers often spanned only one or perhaps two firms, the converse is now the norm. Consequently, a lawyer who spends an entire career with one firm is viewed as an anomaly.
When lawyers change firms, there are practical considerations and ethical considerations. In this column, I highlight some of the key ethical considerations.
Generally, lawyer departures are the result of a variety of factors, predominantly financial or personal. Some lawyers leave their firms to seek greener pastures, or to compete for clients and a greater share of the presumably lucrative fees that often accompany them. Others depart for personal reasons, such as conflicts in personality or style, while others cite family or lifestyle reasons. And in the light of the recent pandemic, which continues to impact firms of all sizes, lawyers are increasingly citing quality of life as a primary reason for changing firms.
Numerous Pennsylvania Rules of Professional Conduct apply to lawyers who leave firms, and to the lawyers in the firms from which they leave. While some apply directly to lawyer departures, others provide guidance when less common situations arise. For example, Rule 1.6 (Confidentiality of Information) governs what disclosures a lawyer may make about existing clients. Rule 1.10 (Imputation of Conflicts of Interest: General Rule) addresses different conflicts of interest that may arise not only during negotiations but also during transitions and after the departure. Rule 1.4 (Communication) addresses communications with a client about the client’s representation. In addition, the departing lawyer continues to have an obligation to former clients to address conflicts of interest under Rule 1.9 (Duties to Former Clients). Further, Rules 7.1 through 7.5 govern the contents of advertising and related materials.
Regardless of why lawyers change firms, in virtually every instance, these departures raise legal and ethical concerns, including questions about the old and new firms’ obligations to clients and to the respective firms. There are also financial issues, ranging from fee disputes to questions about compensation and benefits.
In some circumstances, these disputes cannot be resolved amicably, and the courts must intervene. In more and more cases, the issues do not fit neatly into the framework and text of the existing Rules of Professional Conduct. At times, there is a real or perceived overlap between the Rules of Professional Conduct and the applicable substantive law. Moreover, because lawyers are frequently licensed in more than one state, and each state applies different rules and statutes to these disputes, resolution can be difficult.
When an attorney changes firms, the central question that arises is, “What happens to the clients?” The answer is that the client’s right to choose counsel is paramount, and all other considerations are secondary. Clients have the right to choose their counsel and may select the departing attorney, the departing attorney’s old firm, or a new firm. To exercise this right, attorneys and law firms must provide clients with adequate and accurate information in a timely manner so that no prejudice will arise, regardless of the client’s decision.
To ensure that the client is adequately informed about the transition, both the departing lawyer and the former law firm should communicate to the clients their various options for retaining counsel. In recognizing a client’s right to choose counsel, attorneys, and law firms should heed the following guidelines:
In order to safeguard the client’s right to choose counsel and to recognize that lawyers associate with—and dissociate from—law firms for a variety of reasons, the courts and the Pennsylvania Rules of Professional Conduct encourage lawyer mobility. Courts will generally not sanction agreements that limit an attorney’s ability to practice, limit a client’s ability to select an attorney of their choosing or include onerous financial conditions that preclude an attorney from continuing to represent a client. However, a lawyer’s right to move does not override the Rules of Professional Conduct. A lawyer must abide by the rules and decline to accept representation when a conflict of interest or other circumstances exist that preclude the lawyer or a law firm from accepting a particular representation.
Every lawyer is obligated to refrain from competing with the firm during the partnership or employment relationship. They must deal openly with the firm about matters affecting its business, and avoid misleading the firm. This fiduciary duty (a) precludes lawyers from discussing their plans with clients before informing their partners/employers about the impending change, (b) requires that lawyers do not sign up clients with the lawyer’s new firm before the lawyer exits from the current firm (without specific approval to do so), (c) prevents lawyers who are planning to switch firms from misusing, removing, or destroying the firm’s property or confidential information, and (d) generally limits the circumstances under which a lawyer may communicate with clients about the lawyer’s impending departure before the firm is aware of the departure.
Every lawyer is also obligated to provide timely and accurate notice to clients on whose active matters the attorney is working about the attorney’s departure and the client’s right to choose counsel, avoid conflicts of interest that may arise as a result of the change in firm, and protect client information, files, and other client property. In sum, there are multiple considerations for lawyers and their present and future firms when contemplating a move. If handled correctly, transitions can go more smoothly. This is not an area where attorneys want to make the legal news headlines.
Daniel J. Siegel, a member of the Board of The Philadelphia Lawyer, is the principal of the Law Offices of Daniel J. Siegel, LLC, and chair of the Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility. He provides ethical, techno-ethical, and disciplinary guidance and representation, as well as appellate, writing, and trial preparation services to other attorneys. He can be reached at dan@danieljsiegel.com.
