Ethics

• Publication year: 2020
• Author: Kermit D. Marsh, Esq.

Ethics

Kermit D. Marsh, Esq.

“You Don’t Own Me” – The Client Selects Future Representation When the Lawyer and the Law Firm Part Ways.

When lawyers and firms part ways, often a major point of contention is whether any particular client “belongs” to the departing lawyer (“Departing Lawyer”) or to the law firm (“Law Firm”). In California State Bar Formal Opinion No. 2020-201 (“Opinion 2020-201”), the Standing Committee on Professional Responsibility and Conduct (“Standing Committee”) provides its advisory opinion that the answer is “neither.” With due respect to Lesley Gore, when the Law Firm and the Departing Lawyer contend over who will keep the client’s work, the client may rightfully assert: “You don’t own me.”

State Bar ethics opinions are “advisory” and address “hypothetical attorney conduct.”¹ Such opinions, “although not binding, are often cited in the decisions of the Supreme Court, the State Bar Court Review Department and the Court of Appeal.”² Counsel should therefore consider the State Bar’s Formal Opinions carefully.

The Client Decides Whether to Remain with the Departing Lawyer or the Law Firm, or Hire New Counsel.

In Opinion 2020-201, the Standing Committee reiterates that “The guiding ethical principles governing any attorney departure are the protection of the client’s best interests and the client’s right to the counsel of its choice.”³ This is consistent with a previous opinions by the Standing Committee, California State Bar Formal Opinion No. 1985-86, which states that “the interests of the client must prevail over all competing considerations . . . if the practitioner’s withdrawal from the firm is to be accomplished in a manner consistent with professional responsibility.”⁴ Citing the California Supreme Court’s decision in Heller Ehrman v. Davis Wright (2018) 4 Cal.5th 467, 556, Opinion 2020-201 states that “clients are not the property of any law firm or lawyer.”⁵

Law Firm and Departing Lawyer Both Have a Duty to Notify the Client.

Both the Law Firm and the Departing Lawyer have an obligation to notify the client of the departure. Rule 1.4 of the California Rules of Professional Conduct addresses “Communications with Clients,” and Rule 1.4(a)(3) expressly requires lawyers to “keep the client reasonably informed about significant developments relating to the representation, including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed.”⁶ “[U] nder rule 1.4(a)(3), Departing Lawyer and Law Firm must inform certain clients about Lawyer’s departure as soon as reasonably practical to allow clients to make an informed choice in counsel and to provide for a smooth transition to avoid prejudice to clients.”⁷ This is because “the departure of a lawyer is a ‘significant development.’”⁸ This notice requirement keeps the client informed of this important development and allows the client to “make an informed choice of counsel.”⁹ (Opinion 2020-201, p.4, citing Jewel v. Boxer (1984) 156 Cal.App.3d 171 and Little v. Caldwell (1894) 101 Cal. 553.)

In an ideal situation, the Law Firm and Departing Lawyer would agree to a joint notice to the client; however, attorney departures are often far from ideal and may be contentious. In such situations, the Standing Committee clarifies that neither can prevent the other from providing notice to the client: “Departing Lawyer does not violate rule 7.3 [California Rules of Professional Conduct, Rule 7.3, “Solicitation of Clients”] by notifying current clients of her departure from Law Firm. Such notification does not constitute an impermissible solicitation and . . . Departing Lawyer is ethically obligated to communicate this information to current clients.”¹⁰

Although Law Firm and Departing Lawyer are not both required to send separate notices, neither party can merely assume that the other will do so. “It is not imperative that both Departing Lawyer and Law Firm notify the client of an impending departure, although both are permitted to if they so choose. However, if one fails to notify a client, or refuses to do so, the other one must.”¹¹

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Contracts Between Departing Lawyers and Law Firms Regarding Assignment of Client Matters Upon Separation May Not Be Enforceable.

There is often a contract governing the relationship between the Departing Attorney and the Law Firm, which may be characterized as an employment agreements, a shareholder agreements, a partnership agreements, or even a non-disclosure agreement. The relationship termination clause in such a contract may assert that either the Law Firm or the Departing Attorney will notify the client when the two part ways. Opinion 2020-201 advises that such notification arrangements may be problematic. Opinion 2020-201 states: "For example, Law Firm should not attempt to enforce contractual obligations on Departing Lawyer that would prevent Departing Lawyer from complying with ethical obligations on Departing Lawyer that would prevent Departing Lawyer from complying with ethical obligations to clients or interfere...