The Long Goodbye

• Author: Angela Morris
• Pages: 34-35

Business of Law

34 || ABA JOURNAL APRIL 2019

PHOTO BY JOSE PEREZ

The Long Goodbye

Are law firms invoking obscure contractual

clauses to delay partners from moving to

rival firms? Or does it just seem that way?

By Angela Morris

When New York City intellectual pr operty litigator

Jayadeep “Jay” Deshmukh wanted to t rade his partnership

at Arent Fox for one at Kasowitz B enson Torres, his old firm

put the brakes on a speedy exit .

What happened next bec ame lawsuit fodder.

Deshmukh’s partnership ag reement said he would need to give a 60-day

notice before leaving his job at A rent Fox. The firm was willing to w aive the

provision, but only if he paid $96,000.

Claiming that D eshmukh paid just $5,000 on his first of six $16,000

installment s, Arent Fox sued their former partner for breach of contra ct.

The complaint, which was fi led in January in the U.S. Distric t Court for the

District of Columbia , seeks to collect the remai ning $91,000, plus attorney

fees and interest .

Arent Fox spokesman Nathan C arlile declined to comment, and

Deshmukh, now a par tner at Kasowitz Benson Torres, didn’t respond to a

request for com ment.

Of course, the lawsu it made news in the legal industry pres s—which, in

recent years, ha s reported on other BigLaw firms that invoked va rious con-

tractual c lauses to delay lateral partner s from moving to new firms. Such

headlines may cre ate an impression that it’s a growing trend for law firm s

to enforce their notice prov isions. However, three experts told the ABA

Journ al that holds are not new.

Enforcement of notice provisions t ypically flies under the rada r, but it hap-

pens more than you thin k, says Robert Hillman, co -author of Hillman on

Lawyer Mobility: The Law and Ethic s of Partner Withdrawals and Law

Firm Breakups.

“Sometimes they ar e enforced, and sometimes they are not enforc ed,” says

Hillman, a profes sor at the University of California at Davi s School of Law.

“It’s something of a reflection of the competit ive marketplace. When laterals

are hot, it’s becoming more of a problem for firm s.”

For example, last summer Weil, Gotsh al & Manges tried to enforce a

six-month notice provision on a par tner

who lateraled to K irkland & Ellis in Dalla s,

accordi ng to the American Lawye r.

Kirkland spoke swoman Olivia Clarke

declined to comment, a nd a Weil spokes-

person didn’t return a re quest for com-

ment. In the past two yea rs, Baker Botts

enforced a 90-day hold prov ision on a

number of lawyers who joined other fir ms

in Houston, accordi ng to a Texas Lawyer

article.

CIRCLING THE WAGONS

Hillman ex plains there are legitimate

reasons for a firm to en force a notice pro-

vision, namely ensur ing an orderly tran-

sition of the departing law yer’s work and

trying to p ersuade his or her clients to stay.

However, he argues that it is illeg itimate to

enforce a hold just to obstruc t the partner’s

departure. Plus, t here’s an ethical issue in

trying to ke ep a departing lawyer’s clients,

since after a ll, clients have a right to choose

their own lawyer.

Even the firms that enforce holds t yp-

ically wind up ba cking o in the end,

says Joel Zeldin, who represents pa rt-

ners in disputes wit h firms they’re leav-

ing. Lawyers ty pically want to get out as

quickly as they c an, while firms want a

quiet and respect ful departure. Enforc ing

“It’s something of a reflection

of the competitive marketplace.

When laterals are hot, it’s becoming

more of a problem for firms.”

– Robert Hillman

Law Firms

Robert Hillman , co-author of Hill man on

Lawyer Mobility: The Law and Ethics of Par tner

Withdrawals and Law Firm Breakups