Presenting a live 90-minute webinar with interactive Q&A Ethical Issues When an Attorney Leaves the Firm: Managing Client Communications and Files, Work Product, Conflicts of Interest WEDNESDAY, MARCH 8, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Geri S. Krauss, Esq., Krauss , New York William P . Schuman, PC, Partner, McDermott Will & Emery , Chicago The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Ethical Issues When an Attorney Leaves the Firm Managing Client Communications, Client Files, Work Product and Conflicts of Interest Presented By: William P. Schuman McDermott Will & Emery LLP Geri S. Krauss Krauss PLLC
INTRODUCTION: Priority One The Client’s Best Interests • Attorneys change firms on a regular basis, and whether it is agreeable or disagreeable, the primary focus must always be the client’s best interests. • Both the departing attorney and the firm have ethical responsibilities to the client to assure that their representation is not adversely affected by the attorney’s departure. • Dowd & Dowd, Ltd. v. Gleason , 693 N.E.2d 358 (Ill. 1998) – The fact that multiple clients were deposed as part of this lawsuit speaks volumes to the damage to client relations that can occur 6
The Problems • Tension between fiduciary duties to your clients vs. fiduciary duties to your partners and your firm • Clients win, but it is close • Your personal interests come last • Real world departing attorney issues often do not fit easily within the guidance offered by cases and ethics opinions • Guidance is conflicting from state to state 7
I. Notice and Communication 8
I. Notice and Communication • A. Notice by the departing attorney to the firm; • B. Notice by the departing attorney to the client; • C. Notice by the law firm to the clients; • D. Post-Notice communications with clients; • E. Attorney solicitation of clients; • F. Attorney solicitation of employees. 9
A Good Starting Point • ABA Formal Opinion 99-414 (1999) – A departing lawyer has an ethical obligation along with responsible members of the law firm who remain at the old firm to assure that clients are informed that the lawyer is leaving the firm. • This can be accomplished by the departing lawyer alone, the responsible members of the firm, or the lawyer and old firm members jointly • Because the client has the ultimate right to select counsel of their choice, information concerning the lawyer’s departure and where they are going is critical in allowing client to make an informed decision 10
A Good Starting Point • ABA Formal Opinion 99-414 (1999) – Model Rule 1.16(d) - Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by other law. – A departing lawyer must, under Model Rule 1.16(d) take steps, to the extent practicable, to protect the current clients’ interests. – The responsible members of the former firm must also comply with Rule 1.16(d) respecting all clients who select the departing lawyer to represent them 11
A Good Starting Point • ABA Formal Opinion 99-414 (1999) – 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 generally should conform to the following: • the notice 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 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 departing lawyer must make clear that the client has the ultimate right to decide who will complete or continue the matters; and • the departing lawyer must not disparage the lawyer’s former firm. 12
A Good Starting Point • ABA Formal Opinion 99-414 (1999) – The departing lawyer must continue to make clear in discussions with the client that the client has the right to choose whether the old firm, the departing lawyer, or some other lawyer will continue the representation. 13
A Good Starting Point • ABA Formal Opinion 99-414 (1999) – A lawyer moving to a new firm also may wish to take with her files and her documents such as research memoranda, pleadings, and forms. To the extent that these documents were prepared by the lawyer and are considered the lawyer’s property or are in the public domain, she may take copies with her. 14
A. Notice by the Departing Attorney to the Firm • The preference in many jurisdictions is that the firm is to be noticed first • “It would be improper for the departing attorney to announce to clients of the firm, his or her pending departure, before the law firm is told.” Supreme Court of Ohio Board of Commissioners on Grievances and Discipline Advisory. Opinion 98-5 • The general rule in New York, when an attorney departs from an existing practice, he should give notice to the clients after notice is given to the former firm. Graubard Mollen Dannett & Horowitz , 86 N.Y.2d 112, 120 (N.Y. 1995). 15
A. Notice by the Departing Attorney to the Firm • It has been held to be a breach of fiduciary duty to the firm for the departing attorney to notify clients that he is leaving before the attorney first notifies the firm. In The Matter of Gary M. Cupples , 952 S.W.2d 226 (Mo. 1997). • ABA Formal Opinion 99-414 (1999) - The departing lawyer also must recognize the requirements of other principles of law as she prepares to leave, especially if she notifies her current clients before telling her firm she is leaving. For example, the departing lawyer may avoid charges of engaging in unfair competition and appropriation of trade secrets if she does not use any client lists or other proprietary information in advising clients of her new association, but uses instead only publicly available information and what she personally knows about the clients’ matters. 16
Notice by the Departing Attorney to the Firm • In The Matter of Gary M. Cupples , 952 S.W.2d 226 (Mo. 1997)- a breach of fiduciary duty to the firm for the departing attorney to notify clients of his impending departure before the attorney notifies the firm of same. • But see Dowd & Dowd v. Gleason , 693 N.E.2d 358, 367 (Ill. 1998) - 17
• The next step in the process after notifying the firm of the attorney’s impending departure, is to now notify the clients, with whom the attorney was actively working with, of his impending departure. 18
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