How should a lawyer go about the business of leaving a law firm, especially with the intention of starting his or her own?
On one hand, it's nice to know whether there will be enough business to pay the bills and eat. On the other, there is the delicate matter of solicitation.
Handled improperly, the whole issue can wind up as a federal case - literally.
Pending before the Supreme Court now is a matter involving a bunch of Philadelphia lawyers who decided to leave their law firm, but not without first asking some of the firm's clients if they cared to leave also. Without giving notice to their old firm, a Philadelphia court later found, the lawyers leased office space and obtained a line of credit at a local bank by listing more than 80 cases that were expected to produce about $500,000 in revenue.
The problem, according to the court, was that the clients were clients of the firm, not of the departing lawyers.
One of the lawyers, according to the court, "initiated contacts with clients of [Adler, Barish, Daniels, Levin and Creskoff] by telephone and in person. He advised them that he was leaving Adler, Barish and further advised them that they could choose to be represented by him, by Adler, Barish, or by any other attorney."
The lawyer followed up those contacts by mailing form letters to the clients - one letter discharging Adler, Barish and another establishing a contingent fee relationship between the client and the lawyer.
The Court of Common Pleas of Philadelphia was not pleased. "It is noble and daring to embark on a career of law by cutting the umbilical cord that ties one to an employment contract," the court said. "But taking the heart and soul of the benefactor is immoral, illegal and repulsive. If they want their own firm, let them get their own clients."
The problem may be more complicated than that. A lawyer with a large, prestigious firm may bring a client in but cannot be sure whether it was the firm or his ability that attracted the client. When the lawyer gets ready to leave, he or she may wonder if the client will come along.When can the lawyer approach the client - if at all? If he waits until after announcing his departure, he may discover he's opening a business without a clientele. If he approaches the client too soon, he may get his knuckles rapped.
In the Philadelphia case, the court issued an injuction against the lawyers forbidding them to form a new firm by contacting the old firm's clients. An appellate court reversed the lower court and dissolved the injunction, but then the Supreme Court of Pennsylvania reinstated the injunction.
The consensus in Washington seems to be that if one wants to be perfectly honorable and forth-right , the lawyer informs his firm that he is leaving, lets the firm notify the client and lets the client decide who will represent him. Even then, though, problems come up. One conscientious lawyer who left a large firm to open a new one with some of the old firm's partners was concerned that some clients might think he was dumping them in mid-litigation. He offered to continue to represent them through his old firm if the client wished.
In another case, when some lawyers left a large, prestigious firm here, they worried about which clients would come with them.
"When you start your own firm, you don't have any confidence they're going to go with you," one lawyer said. "I thought I'd have to sell my house and move to another location."
As it turned out, though, he did not. He let his firm tell the client he was leaving and each client he was representing decided to follow him to the new firm.
The new firm is doing well, and no one is missing any meals at the old firm, either.
Update - The Judical Conference for the District of Columbia Circuit met last week in Richmond to consider, among other things, the recommendations of the Committee of the Judicial Conference of the United States to Consider Standards for Admission to Practice in the Federal Courts - the Devitt committee for short.
The circuit's judicial conference voted against the Devitt committee's recommendations, which include establishing minimum competency standards for lawyers, adoption of the standards, creation of a committee on admission in each district and creation of a peer group performance review system.
The conference adopted the local bar's recommendation that admission to federal practice be conditioned on completion of "an appropriately certified program of trial advocacy."
The recommendation of the District of Columbia Circuit and the other 10 U.S. judicial circuits will be taken up in September by the U.S. Judicial Conference, which will take its own vote on the Devitt committee suggestions. It then will be up to the individual federal district courts across the country to decide what changes they want to make.