Ethical Considerations of Lawyers Moving From One Private Law Firm to Another
(The March 2002 “Speaking of Ethics” column centered on Opinion 273, which focused on a lawyer’s departure from a firm. Diverse ethical, property, and client-relationship issues attend to the lawyer’s departure and possible association with another firm. Many rules are cited in Opinion 273.)
Under the Rules of Professional Conduct, a lawyer responsible for a client’s matter would be obligated t o inform that lawyer’s clients of his/her planned departure and of the lawyer’s prospective new affiliation, and to advise the client whether the lawyer will be able to continue to represent it. Rule of Professional Conduct 1.4, “Communication,” obligates a lawyer to keep a client informed “about the status of a matter” and to “explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” …
Thus, not only does Rule 1.4 require the lawyer to communicate his prospective change of affiliation to the client, but such communication must occur sufficiently in advance of the departure to give the client adequate opportunity to consider whether it wants to continue the representation by the departing lawyer and, if not, to make other representation arrangements.
Advance communication is also necessary when the departing lawyer does not intend to continue a representation in his post-departure affiliation, as Rule 1.16(d) requires a lawyer, when terminating a representation, to give “reasonable notice to the client”, and to allow “time for employment of other counsel . . . .” (This discussion assumes that the departing lawyer’s withdrawal is otherwise proper under Rule 1.16(a) and (b).)
… The client would also need to be informed of any conflict of interest matters affecting its representation at the new firm. Any communication which exceeds that required by ethical rules—for example, an active solicitation of the client to leave the lawyer’s current firm and join the lawyer at the new firm—could run afoul of the lawyer’s obligations under partnership law (for departing partners), corporate law (for shareholders of a professional corporation) and the common law of obligations of employees (for lawyers who are employees of a firm)… Under partnership or other law, a departing lawyer may also be obliged to inform the lawyer’s firm, at or around the time the lawyer so notifies clients, of his/her planned departure from the firm. …
… (T)he lawyer(s) terminating a relationship must “surrender. . . papers and property to which the client is entitled . . . ” (Rule 1.16(d)), meaning that the client files must remain with or be transferred to the lawyer(s) who will be continuing the representation. …
Where the lawyer or law firm whose relationship with the client is
being terminated in this process is owed money for legal services provided,
a retaining lien against client files is available only to a very limited
extent in the District of Columbia. Under Rule of Professional Conduct
A lawyer may acquire and enforce a lien granted by law to secure the lawyer’s fees or expenses, but a lawyer shall not impose a lien upon any part of a client’s files, except upon the lawyer’s own work product, and then only to the extent that the work product has not been paid for. This work product exception shall not apply when the client has become unable to pay, or when withholding the lawyer’s work product would present a significant risk to the client of irreparable harm.
It would not be unethical for the lawyer terminating the representation to retain copies of documents from the client’s file, although these (like any documents of a former client that contain confidential or secret information under Rule 1.6) would need to continue to be accorded the status and protection due them. …
… Some ownership and control questions may be resolved by reference to statutory and common law rules of personal property. And, where the departing lawyer is a partner, partnership law principles would be relevant. … (A) lawyer’s removal or copying, without the firm’s consent, of materials from a law firm that do not belong to the lawyer, that are the property of the law firm, and that are intended to be used by the lawyer in his new affiliation, could constitute dishonesty, which is professional misconduct under Rule 8.4(c).
…When a lawyer departs one firm to affiliate with another, conflict
of interest issues are raised for both firms… whether the lawyer
arrives with or without clients. The relevant Rules of Professional
Conduct are 1.10(b) and 1.7. For the lawyer who arrives without clients,
the work the lawyer performed at the former firm may affect the ability
of the new firm to represent its clients. Rule 1.10(b) extends a variation
of the “former client” provisions of Rule 1.9 to the new
firm by prohibiting it from representing a person in a matter:
which is the same as, or substantially related to a matter with respect to which the lawyer had previously represented a client whose interests are materially adverse to that person and about whom the lawyer has in fact acquired information protected by Rule 1.6 [Confidentiality] that is material to the matter.
The Rule applies a four-part conjunctive test for disqualification based on the newly arrived lawyer’s former legal work: (1) the lawyer must have formerly represented the client; (2) the new matter must be the same as or substantially related to the prior representation; (3) the position of the prospective new client must be adverse to that of the former client; and (4) the lawyer must actually (not just imputedly) have learned information confidential to the former client which is material to the new representation.
(A) conflict of interest disqualification of a firm cannot be cured by screening from a matter the lawyer whose prior representation created the conflict. The affected former client may, however, consent to the new law firm’s representation of the new client (Rule 1.10(d)), and might seek such screening as a condition to its consent. …
A different conflict scenario is presented with respect to clients who accompany a lawyer to a new firm. The new firm must treat each of those representations as new ones for it, testing its ability to undertake those representations against the requirements of Rules 1.7 and 1.9.
Finally, the firm from which the lawyer departed is subject to an ethical constraint in respect of the representations of persons who became former clients when the lawyer departed. Under Rules 1.9 and 1.10(c), the firm may not represent persons with interests materially adverse to those of a former client in matters which are the same or substantially related to those in which the formerly associated lawyer represented the client while at the firm. The firm also has continuing obligations under Rule 1.6 to preserve the confidences of its former clients.
,…(W)here a lawyer who departs one firm for another, leaving the representation of certain clients with the former firm, that lawyer must insure that he/she continues to guard against unauthorized use or disclosure of information protected under Rule 1.6. … …
Another question … is whether a departing lawyer may, prior to departure, recruit lawyers or non-lawyer personnel to … to the new firm. We believe that this issue is resolved primarily, if not entirely, under law other than ethics law, such as the common law of interference with business relations and fiduciary obligations.
…Rule 7.5(a),… prohibits the use of a firm name or letterhead which is false or misleading. … See Rule 7.5, Comment : “[I]t is misleading to use the name of a lawyer not associated with the firm or a predecessor of the firm.”
Inquiry No. 97-1-1
Adopted: September 17, 1997