Departure is such sweet sorrow: leaving your law firm.
Byline: Edward S. Cheng
You may have just been invited to leave your current firm to join a prestigious big firm. Or maybe you have decided to take that great leap into the unknown and start your own firm with a close friend. Such scenarios are increasingly frequent as law firm departures have become commonplace. But now that you have decided to leave your firm, how do you ethically depart with your practice intact?
The longstanding case providing insight on this matter is the 1989 Supreme Judicial Court decision in Meehan, et al. v. Shaughnessy, et al., 404 Mass. 419.
In Meehan, plaintiffs James F. Meehan and Leo V. Boyle decided to leave Parker, Coulter, Daley & White to form their own firm. The court reviewed Meehan and Boyle's conduct in preparation for departure as well as their efforts to bring clients to their new firm, thus setting guidelines for attorney departures ever since.
You still have duties to your firm
The central principle established in Meehan is that "partners owe each other a fiduciary duty of 'the upmost good faith and loyalty,'" which applies to partners until their actual departure.
"As a fiduciary, a partner must consider his or her partners' welfare, and refrain from acting for purely private gain." This requires the departing attorneys to handle their cases, matter assignments, billing and collections for the benefit of the firm, and not for their own benefit in preparation for departure.
The departing attorney cannot engage in self-serving practices like delaying work until after departure, or funneling cases to himself and others leaving with him; any deviation from the attorney's normal practices may be scrutinized with 20/20 hindsight.
Indeed, the fiduciary duty to other partners is so deep-seated that the court wrote that "[a] partner has an obligation to render on demand true and full information on all things affecting the partnership to any partner," frowning on Meehan and Boyle's affirmative denials to their partners that they had plans to leave the firm.
Note that the partner is not required to step forward to disclose departure plans but must honestly respond if directly asked.
This does not mean, however, that the departing attorney cannot take steps to prepare for the departure. "Fiduciaries may plan to compete with the entity to which they owe allegiance, provided that in the course of such arrangements they do not otherwise act in violation of their fiduciary duties."
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