Ethical duties to clients remain paramount to other obligations for departing attorneys

Lawyers, like baseball free agents such as Gerrit Cole and Anthony Rendon, often believe that there are greener pastures (and allure of bigger dollars) elsewhere. In this regard, as pitchers and catchers have just reported to spring training, a few weeks ago — in late January — the State Bar Board of Trustees approved the publication of Ethics Opinion 2020-201 written by the State Bar of California’s Committee on Professional Responsibility and Conduct. The opinion discusses the ethical obligations of both an attorney departing a law firm, akin to a baseball free agent, as well as the duties of the attorney’s former law firm. It acknowledges that, although the departing lawyer may owe the law firm fiduciary or contractual duties, “the client’s interests must come first.” The directives of the opinion are “client-centered” and it repeatedly refers back to the important principle of a client’s right to the counsel of its choice.

Opinion 2020-201 acknowledges that “[l]awyer mobility is a reality in today’s legal marketplace.” Stereotypes of millennial lawyers making more career changes than their older colleagues have been proven accurate when looking at data, but lateral transfers are more prevalent among all generations of lawyers now more than ever. Thus, after reading the opinion, law firms and lawyers who are contemplating a career move should ensure that they have systems in place to comply with their ethical duties.

Competing Duties

Despite acknowledging that attorneys may have contractual duties to their firms, Opinion 2020-201 states that firms “should not attempt to enforce contractual obligations on [a] Departing Lawyer that would prevent Departing Lawyer from complying with ethical obligations to clients or interfere with the client’s right to choice of counsel.” American Bar Association Standing Committee on Ethics and Professional Responsibility Formal Opinion 489 issued in December takes this idea a step farther than Opinion 2020-201 and opines that ethics rules do not allow noncompetition clauses in partnership or employment agreements. Ethics Opinion 2020-201 does not opine about the propriety of specific clauses in these types of agreements.

Duty to Communicate News of the Departure to the Client

California Rules of Professional Conduct, Rule 1.4(a)(3) states, in relevant part that a lawyer shall, “keep the client reasonably informed about significant developments relating to the representation.” Opinion 2020-201 holds that “the departure of a lawyer is a ‘significant development’ with respect to current clients of the law firm for whom the lawyer is providing meaningful legal services.” What are meaningful legal services? The opinion holds that matters the departing lawyer is responsible for and matters where the lawyer plays a principal role meet this standard. Further, notice is required where the departing lawyer reasonably believes that the client may wish to transfer its files to departing lawyer’s new firm. Any doubts about whether to inform a client should be resolved in favor of informing the client.

ABA Formal Opinion 489 takes a similar approach, but holds that notice must be given to any client with whom the departing attorney has had “significant client contact.” Where an attorney has merely worked on a research memo, but has never spoken directly with a client, this would not rise to the level of significant client contact.

Opinion 2020-201 states that the timing of the notice to the client should be timely, fair and reasonable under the circumstances. At times, a lawyer’s departure can be quite acrimonious. Some law firms have directed the departing attorney not to communicate with the clients (impliedly or expressly suggesting that the firm alone would handle the communication). Without making an absolute determination on this issue, the opinion states that, “any directive to Departing Lawyer not to contact a client … should be viewed skeptically and as potentially violating rule 1.4(a)(3).” However, it makes clear that the departing attorney should not tell clients of her impending departure until after she has notified her firm.

Form of Notice

Joint, written notice from the departing lawyer and the law firm is the most preferable form of notice. Opinion 2020-201 acknowledges that this may not be possible due to acrimony surrounding the departure, disagreement over the drafting of the notice and/or one party using the drafting of the joint notice as a delay tactic in informing the client. Thus, in certain circumstances, it is ethically permissible for either party, departing attorney or firm, to give unilateral notice.

The content of the notice should include the following:

• Departing lawyer is leaving;

• The timing of the departure;

• Where Departing Lawyer is going and related contact information;

• Departing Lawyer’s and Law Firm’s ability and willingness or inability and unwillingness to continue to represent the client;

• That the client may choose to stay with Law Firm, go with Departing Lawyer or choose another lawyer or law firm entirely; and

• Where the client’s file will be and who will be handling the client’s matter until the client expresses a choice.

Solicitation

It is ethically permissible, subject to the relevant Rules of Professional Conduct (7.1-7.3), for the departing attorney to solicit clients, either before or after the departure from the law firm, with whom the departing lawyer has a “prior professional relationship.” It is important to note that the departing lawyer may have prior professional relationships with firm clients even if the lawyer is not currently providing meaningful legal services to those clients. For example, the departing lawyer may have a professional relationship with a client but the lawyer has his or her partner service that client because the departing lawyer does not practice in the substantive legal area in which the client needs services. Thus, the universe of firm clients the departing attorney may plausibly solicit includes not only some or all of the clients the attorney and/or the firm needs to notify of the attorney’s departure, but any other client with whom the attorney has had a prior professional relationship.

When the departing lawyer wants to solicit firm clients before the departing lawyer has left the firm, Opinion 2020-201 states that “this situation involves a decided intersection between the ethical rules requiring notice and permitting solicitation, the scope of fiduciary duties among partners and potential contractual obligations between the parties.” Ethics Opinion 2020-201 does, however, argue that “prohibiting lawyers who have already given notice to the law firm of their departure from properly soliciting clients and competing for clients on equal footing as the law firm[,] undermines client choice.”

Other Considerations

Ethical considerations of the departing attorney and the law firm relating to transitioning client matters to a new attorney at the firm or to the departing attorney’s new firm are discussed in Opinion 2020-201. At its core, this ethical duty requires the departing attorney and the law firm to cooperate with each other during the transition process to protect the client’s interest.

Conclusion

In 2020, it is quite rare for a baseball player to spend his entire career with one team as Tony Gwynn did with the Padres, and as Mike Trout and Clayton Kershaw probably will with the Angels and the Dodgers, respectively. Similarly, it is becoming equally rare for a lawyer to spend his or her entire career with one law firm. For the majority of lawyers who may one day depart a law firm, it should be noted that although Opinion 2020-201 does not change established norms of ethical considerations when an attorney is departing a law firm, it is a good reminder that both the departing attorney and the law firm need to place the client’s interests before any others. If attorneys follow the guidance of this opinion, 20/20 hindsight will not be necessary as they will be armed with the knowledge of their ethical duties prior to the departure. 