Exercise caution on taking those clients because competing with the former employer may expose you to civil liability
By JAMES M. FISCHER
Leaving a law firm with the expectation that clients will follow raises, for the associate lawyer, a number of issues that must be resolved pre-departure.
As an employee of the law firm, an associate owes his or her employer a duty of loyalty. Competing with the former employer may expose the departing associate to civil liability. This is so even though Rule 1500 of the Rules of Professional Conduct expressly bars the use of agreements or restraints that prevent competition among lawyers for legal services.
The first issue the departing associate should address is notice. We should distinguish here between notice to a person that the associate is leaving the firm and soliciting that person to follow the associate to his or her new employment.
Pure notification to the client that the associate will be leaving the firm raises no issue of breach of loyalty or breach of professional ethics; moreover, notice may be ethically required in those matters where the associate has had substantial involvement and responsibility for the client's representation.
The second issue for the departing associate is that of solicitation. The resolution of this issue is more difficult.
We may ease the difficulty somewhat by distinguishing between pre-departure and post-departure solicitation.
Rule 1400 provides that a lawyer may, through in-person or telephonic means, contact a person concerning the availability of professional services for pecuniary gain when the lawyer has a "prior professional relationship" with that person.
The term "prior professional relationship" is broader than the term "former client."
How heavily involved in the former firm's client affairs the lawyer must be to satisfy the "prior professional relationship" is not clear. Merely working on the client's file probably is not sufficient; being the lawyer primarily responsible for the client's representation surely satisfies the standard.
Good judgment and common sense should be used for cases in between these two examples. Cautious lawyers will await the termination of their employment with the firm before soliciting the firm's clients for legal representation.
Pre-departure solicitations of clients present the most likely case of civil liability for the departing associate.
Several courts have noted that the associate's fiduciary obligations as an employee preclude pre-departure, surreptitious competition for the firm's clients. This obligation has been held to outweigh the client's right to determine whether the law firm or departing lawyer will continue with the representation.
If due to a pre-departure solicitation the client goes with the departing lawyer, the departing lawyer may become civilly liable to the former firm for the firm's loss of business. It should be added, however, that the interaction of a professional rule permitting solicitation and civil liability for that solicitation has not been addressed in California. Hence, comments here must be guarded.
Many of the out-of-state decisions discussing the issues of the departing lawyer's civil liability for soliciting the former firm's clients expressly relied on Rules of Professional Conduct governing client solicitation that have been declared invalid by more recent Supreme Court decisions.
While this might suggest some flexibility in the precedents, the fact remains that the primary justification for the no solicitation rule - the associate's fiduciary duties to the firm - is not affected by the Supreme Court's attorney advertising decisions. Again, the cautious lawyer will await termination of employment before soliciting clients of the former firm with whom the departing lawyer had a "prior professional relationship."
James M. Fischer is a professor at Southwestern University Law School and a member of the State Bar Committee on Professional Liability Insurance.