Worst case scenarios when you decide to leave your firm

PARTNER DEPARTURE LAW

For partners and groups leaving law firms, careful planning and preparation can help to avoid, or at least to mitigate, the potential negative effects of leaving the firm, and potential bad outcomes. But if you're thinking about leaving your firm, or actively planning to depart your firm, alone or in a group, you may not be convinced that you need a carefully considered plan to make a successful transition.

After all, you know and trust your partners, right? And they may have been fair to you and honest with you. You also know and trust your clients, right? You look out for their best interests, and they reward your hard work and expertise with their loyalty and trust. And of course, you trust your team, right? You have mentored them, provided professional development and opportunity, and they will reward you with their diligence and loyalty.

These sentiments are a good starting point, and this trust may be well placed in each instance. You may be able to trust your partners' good will, your clients' loyalty, and your team's fidelity. But when partners or groups leave a law firm, the incentive for self-interested behavior rises for the firm, for clients, and for your team. That makes sense, because by definition, the trigger for the partner departure process is your announcement that you have decided to pursue your self-interest. It's prudent to assume that everyone else will too.

So, it's wise to consider some of the potential worst-case scenarios that could arise in the process of departing your firm. Start with the potential reactions by your firm. What's the worst that can happen?

Your firm throws you out. Sometimes the departure of a partner or group with the strongest trust relationships with their partners and firms provokes the strongest negative reaction from the firm. They trusted you, as you trusted them, and they may view your departure announcement as a betrayal of that trust. This can lead to outsized emotional reactions, even among otherwise dispassionate reasonable people. One of the most common such reactions is to throw you out of the firm immediately. Many partnership agreements have broadly-worded partner termination provisions, which give the firm significant flexibility to show you the door quickly, even in real time.

If that were to happen, would you be able to handle your client matters, or even to contact your clients? Would you have the resources available quickly to transition your practice, or might you find yourself standing bewildered in the parking garage trying to remember client phone numbers? There are certain limits to what you can do to prepare, but if not, the parking garage awaits.

Your firm makes you stay. Many firms now also have long notice provisions for departing partners, typically one-sided in favor of the firm, and which may require you to say in place for 30, 60, 90 days or more. Notice provisions may have legitimate purposes, for example to permit the firm enough time to conduct an orderly transition of client matters. But from a practical perspective, these provisions can also mean that you are frozen in place while your firm tries to convince your clients to stay with the firm, and assembles the right team to replace you. Cynical? Yes. Uncommon? No.

Your firm targets your clients. Trying to keep clients, with whom you had the primary attorney client relationship, at the firm, is a fairly obvious, and common, but frequently underestimated firm reaction. You have decided to leave, and take firm revenue with you. Isn't it reasonable to expect that the firm will grant your wish to leave, but try to keep the revenue? In most cases, firms have every incentive, once you announce that you will depart, to keep clients at the firm, and their revenue too. The more money you are planning to take, the greater this incentive, of course.

Your firm targets your team. The same is true about your team. After all, the firm will need an experienced team to pitch the clients to stay, and who better than yours? You have decided to leave to pursue greener pastures, but the firm may be willing and able to offer greener pastures for your team right where they are. A common firm reaction is to approach the second-in-command lawyer in a group and offer to make that partner or attorney first-in-command. If your firm were to make that offer to your lieutenants, are you sure they would decline?

And it gets worse. In some situations, the firm can resort to truly negative steps. Withholding the return of your capital, slow-paying that capital back to you, and deducting offsets at the firm's discretion are common firm reactions. Sometimes this is even supported by the terms of the partnership agreement. Less common, but more problematic, is a lawsuit (or arbitration claim) by the firm against you, your team, and your new firm. Litigation between departed partners and firms is not common, but even if the suit has only arguable merit, it can be an incredibly expensive distraction.

Don't head for the ledge just yet. Not every departure announcement provokes these negative scenarios, of course. Your trusted partners and colleagues may have your best interests at heart, or place professional civility and decorum ahead of their own disappointment, potential feelings of betrayal and/or their interests in preserving firm revenue. Or, hopefully, at the very least, they have the clients' best interests at heart and will honor the clients' desire for choice of counsel. But, unfortunately, you can't always bet on it.

To be quite cynical about it, if your firm has a neutral or positive reaction to your departure, it may also mean that they recognized the same problems that you did, and have concluded that everyone will be better off if you leave. And the cynical approach may be warranted here, because it leads to planning and preparation. If all goes well, you'll be pleasantly surprised. If not, you'll be ready.