Struggles in the Legal World. Attorney Can Take Business Without Compensating Former Firm

• Pages: 8-8
• Date: 01 July 2025
• Published date: 01 July 2025
• Author: Leah E. Trahan
• Subject Matter: Administrative & Public Law

Published i n Litigation News Volu me 50, Number 4 , Summer 2025. © 2 025 by the Americ an Bar Associa tion. Reprodu ced with permiss ion. All rights r eserved. Thi s information or any p ortion

thereof may not b e copied or dis seminated in a ny form or by any mea ns or stored in a n electroni c database or r etrieval syst em without the ex press writt en consent of th e American B ar Associa tion.

state supreme court recently

rejected an attempt by a law

f‌irm to charge a depart-

ing associate attorney for

lost “marketing expenses”

when the associate took clients to a

new f‌irm. In Johnson Family Law, P.C.

v. Bursek, the court refused to enforce

a “reimbursement agreement” when a

resigning associate took clients with

him, concluding the agreement unrea-

sonably restricted the attorney’s abil-

ity to practice law. The court reasoned

that charging undierentiated fees to

departing attorneys substantially dis-

incentivized lawyers from continuing

their representation of clients. ABA

Litigation Section leaders agree with

the decision but note law f‌irms may still

be permitted to recover fees in limited

circumstances. Litigation Section lead-

ers further note that law f‌irms can seek

to retain associates—and thus clients—

in other ways that do not run afoul of

ethics rules.

When an associate left his former

family law f‌irm in Denver, 18 clients fol-

lowed. But the f‌irm claimed the attor-

ney owed $18,936 for the privilege of

taking clients. The f‌irm argued it should

be repaid $1,052 per client for “market-

ing expenses” under the reimburse-

ment agreement. These expenses, the

f‌irm asserted, represented “historic

costs” for promotion. The associate

challenged the agreement, claiming it

violated Colorado Rule of Professional

Conduct 5.6, which prohibits a lawyer

from entering into an agreement “that

restricts the right of a lawyer to prac-

tice after termination of the [employ-

ment] relationship.”

The f‌irm sued the associate in

Colorado state court for breach of

contract. “At trial, both parties asked

the court to determine whether the

agreement was enforceable under Rule

5.6(a).” The trial court agreed with the

associate and concluded the per-client

reimbursement scheme unfairly con-

strained the attorney’s practice. On

Attorney Can Take Business Without

Compensating Former Firm

appeal, the Colorado court of appeals

agreed, f‌inding no justif‌ication for the

agreement except to penalize competi-

tion.

The Colorado Supreme Court next

weighed in on the enforceability of the

reimbursement agreement. As a case

of f‌irst impression in the state, the state

high court looked to other states for

guidance. Some states consider any

f‌inancial burden on professional auton-

omy ethically suspect. Others weigh

client choice and attorney autonomy

against the f‌inancial stability of left-

behind f‌irms.

Ultimately, the agreement at issue

could not survive either standard. The

court noted this rule protects both an

attorney’s professional autonomy and

the freedom of clients to choose their

lawyer. The type of undierentiated

fee demanded by the law f‌irm was cat-

egorically at odds with both goals. “Of

particular concern,” noted the court,

was that “such a fee forces attorneys

to make individualized determinations

of whether a client is ‘worth’ retaining

and incentivizes them to retain clients

in high-fee cases and jettison clients

with less lucrative claims.” This “might

indirectly aect client choice by mak-

ing it more costly for an attorney to

leave a f‌irm.” However, the court left

for another day the issue of what costs

actually incurred for a client could be

reimbursed without violating the rule.

A fee agreement like the one at issue

“chills our ability to move from f‌irm

to f‌irm or to hang our own shingle,”

explains Rita M. Aquilio, Watchung, NJ,

Co-Chair of the Section’s Family Law

Litigation Committee. “Really trou-

bling,” adds Aquilio, is a concern that

attorneys “could even be responsible

for compounded interest, for court

costs, for their attorney fees.”

But a f‌irm’s f‌inancial interests can

still be protected from the loss of a

client through less restrictive reim-

bursement agreements. “It might be

reasonable for law f‌irms to require

By Leah E. Trahan, Litigatio n News Associate Editor

attorneys departing with some of

their former clients to reimburse dis-

crete costs that are attributable to

each of the clients leaving with the

departing attorneys,” explains Eshigo

P. Okasili, Silver Spring, MD, Co-Chair

of the Section’s Family Law Litigation

Committee. The big dierence in this

case is that the fees were undierenti-

ated, but other types of fees might be

recoverable “including, but not limited

to, depositions, transcripts, phone calls,

copying, f‌iling fees, experts’ fees attrib-

utable to each client,” Okasili adds.

If a law f‌irm’s goal is to disincentiv-

ize attorneys from departing in the f‌irst

place, there may be better solutions

than restrictive reimbursement agree-

ments. “Firms should communicate

with their lawyers eectively to f‌ind out

why they want to leave and see if they

can accommodate their needs,” urges

Okasili. “For instance, oering f‌lex-

ible work schedules, attainable billable

hours, extended vacation time and/

or parental leave, enhanced benef‌its,

in-house recreational facilities, reason-

able accommodations could incentivize

attorneys to stay,” she notes. “Flip the

script and say, ‘We want you to grow

your business so that you’re so success-

ful that we all benef‌it from it,’” endorses

Aquilio.

RESOURCES

Comment on A m. Bar Ass’n Model Ru le of

Prof. Conduct 5 .6.

Onika K. Wil liams, “Firms May For ce

Lawyers to Sign N on-Solicitation

Contracts,” Litigatio n News (Oct. 16,

2019).

Kelso L. Ande rson, “Need a Law yer?

There’s an (Unauthorized) App for That,”

Litigation News (Se pt. 2, 2022).

Daniel S. Wi ttenberg, “The Vi rtual Practice

of Law,” Litigation News (Ma r. 22, 2017).

SUMMER 2 025 • VOL. 50 NO. 4

8 | A BA LITIGATION SECTION

ETHICS STRU GGLES IN THE LEGAL WOR LD