Departing a law firm is stressful for clients, departing lawyers, and the law firm. Among the many items to navigate, there are financial concerns, personal feelings, and client relationships that need to be managed.
With so many things to worry about, the transition can seem overwhelming. Fortunately, for all parties involved, Maryland provides good guidance on ethically departing a law firm.
Clients should come first, and inevitably the issue of who will continue to represent the client arises. See Attorney Grievance Commission of Maryland v. Potter, 380 Md. 128, 156 (Md. 2004) citing In the Matter of Cupples, 952 S.W.2d 226 (Mo. 1997). Potter is a disciplinary case in which the lawyer received a 90-day suspension for violating Rule 8.4(d) in part because he took client files without authorization when departing his law firm.
Attorney Potter’s primary mistake was forgetting that the clients’ needs are more important than his own. Potter was too concerned with making sure clients came with him to his new firm. Potter took client files without permission.
Although the trial court found Potter did not violate any Rule of Professional Conduct, the Supreme Court of Maryland sustained bar counsel’s exceptions, and concluded Potter violated Rule 8.4(b)(c) and (d). In disciplining Potter for conduct which prejudiced the administration of justice, the court reminded lawyers that clients are not anyone’s possession ; rather, the clients pick who their lawyer is.
Potter is a must read because it outlines a lawyer’s duty when changing firms. First, lawyers have the duty to clients to assist in the orderly transfer of files. Second, lawyers have a duty to each other to assist in the orderly transition of cases. Third, files belong to the clients, not lawyers. Fourth, lawyers who are dishonest during the separation process can face discipline under Rule 8.4.
To assist in the orderly transfer of files, we regularly counsel attorneys and firms to prepare a neutral, joint letter to the clients that work with a departing lawyer. Such letters advise the client that (1) the lawyer is departing and (2) the client has the choice to have the case handled by the current firm, the departing lawyer. or a third firm.
Giving the client directions for obtaining the file is almost always the best choice. Additionally, a joint letter to clients along these lines helps the lawyer fulfil Md. Rule 19-301.16(d)’s obligation to take reasonable steps to protect the client’s interests when terminating the attorney-client relationship.
Another area of concern for lawyers and law firms stems from the financial impact of the separation.
Many firms have written partnership agreements, which should govern. Rule 5.6 clearly prohibits agreements that limit a lawyer’s right to practice. What is less known among lawyers is that a departing lawyer cannot be penalized financially for a client’s choice to retain or remain with a departing lawyer. See Jacobson Holman PLLC v. Gentner, 244 A.3d 690 (D.C. 2021).
In Jacobson Holman, the District of Columbia Court of Appeals scrutinized the firm’s partnership agreement and invalidated a provision in which the departing lawyer forfeited capital because clients chose to leave the firm. The court held the provision violated D.C. Rule of Professional Conduct 5.6 because it served as an unfair penalty. The Court of Appeals’ decision is consistent with many other courts around the country.
There is no question that separating from colleagues is a challenge. Many long-term relationships do not recover from a business divorce. But frustration over losing a colleague or business partner does not come with the ability to ignore one’s ethical obligations to clients or the judicial system in general.
If a decision to depart is made, handle it honestly internally and with clients. Take the high road by acknowledging there will be some challenges. Work together to get the letters sent and files transitioned and be fair about the dollars. These simple steps will allow lawyers to solve the problems themselves, rather than end up in the disciplinary system.
Craig Brodsky is a partner with Goodell, DeVries, Leech & Dann LLP in Baltimore. For over 25 years, Brodsky has represented attorneys in disciplinary cases and legal malpractice cases, and he has served as ethics counsel to numerous clients. His column appears on the first Thursday of every month. He can be reached at [email protected].