RPC 1.4, 1.4(a)(3), 1.16(d), 1.16(a)(3), 1.16(b)(7), 7.3(a)
Lawyers Moving from Firm-to-Firm in Private Practice
One of the most prominent features of law practice over the past generation has been the increasing frequency of lawyers moving from firm-to-firm in private practice. [n.1] Increased lawyer mobility has spawned a host of issues for the “old” law firms involved, the lawyers moving laterally and their “new” firms. This advisory opinion surveys three recurring questions when a lawyer (Lawyer) leaves an “old” firm (Old Firm) to either join or establish a “new” firm (New Firm) [n.2] :
1. What notice must the Lawyer and the Old Firm provide to the clients for whom the Lawyer is the principal handling attorney [n.3] and when must that notice be provided?
2. How are file transitions handled in this context?
3. After the Lawyer has left the Old Firm, may the Lawyer discuss the possibility of handling work for clients of the Old Firm with whom the Lawyer has had a prior professional relationship?
A. Notice Regarding Departure
1. Responsibility for Notice
Neither the Washington RPCs nor the ABA Model Rules include a specific rule comprehensively addressing the duties of a departing lawyer or the firms involved. [n.4] RPC 1.4(a)(3), however, requires a lawyer to “keep the client reasonably informed about the status of the matter[.]” Comment 3 to RPC 1.4 notes in this regard that “paragraph (a)(3) requires that the lawyer keep the client reasonably informed about the status of the matter, such as significant developments affecting the timing or the substance of the representation.” As ABA Formal Opinion 99-414 puts it:
“The impending departure of a lawyer who is responsible for the client’s representation or who plays a principal role in the law firm’s delivery of legal services currently in a matter (i.e., the lawyer’s current clients), is information that may affect the status of a client’s matter as contemplated by [ABA Model] Rule 1.4. A lawyer who is departing one law firm for another has an ethical obligation, along with responsible members of the law firm who remain, to assure that those clients are informed that the lawyer is leaving the firm.” Id. at 2 (footnote omitted). [n.5]
Therefore, both the Lawyer and the Old Firm have a duty under RPC 1.4(a)(3) to inform the clients affected of the Lawyer’s departure.
2. Form and Content of Notice
RPC 1.4(a)(3) does not specify a particular form for the requisite notice to the clients involved. Again, however, ABA Formal Opinion 99-414 offers useful guidance:
“This can be accomplished by the lawyer herself, the responsible members of the firm, or the lawyer and those members jointly. Because a client has the ultimate right to select counsel of his choice, information that the lawyer is leaving and where she will be practicing will assist the client in determining whether his legal work should remain with the law firm, be transferred with the lawyer to her new firm, or be transferred elsewhere.” Id. at 3 (footnote omitted).
ABA Formal Opinion 99-414 offers equally useful guidance on the content of notice sent before the Lawyer leaves the Old Firm [n.6] :
“Any initial in-person or written notice informing clients of the departing lawyer’s new affiliation that is sent before the lawyer’s resigning from the firm generally should conform to the following:
“1) the notice should be limited to clients whose active matters the lawyer has direct professional responsibility at the time of the notice (i.e., the current clients);
“2) the departing lawyer should not urge the client to sever its relationship with the firm, but may indicate the lawyer’s willingness and ability to continue her responsibility for the matters upon which she is currently working;
“3) the departing lawyer must make clear that the client has the ultimate right to decide who will complete or continue the matters; and
“4) the departing lawyer must not disparage the lawyer’s former firm.”
. . .
“If the client requests further information about the departing lawyer’s new firm, the lawyer should provide whatever is reasonably necessary to assist the client in making an informed decision about future representation, including, for example, billing rates and a description of the resources available at the new firm to handle the client matter.” Id. at 5, 6 (footnotes omitted; emphasis in original). [n.7]
Although ABA Formal Opinion 99-414 suggests that joint notice from the Lawyer and the Old Firm is “preferred,” it also recognizes that the personal dynamics of a particular situation may not make that feasible. Therefore, joint notice is not required. Id. at 6-7. [n.8]
3. Timing of Notice [n.9]
As noted, RPC 1.4(a)(3) requires that a lawyer “keep the client reasonably informed[.]” RPC 1.4(a)(3) does not set a specific timeline. Rather, Comment 5 to RPC 1.4 suggests that the timing of communication must be reasonable under the circumstances: “The guiding principle is that the lawyer should fulfill reasonable client expectations for information consistent with the duty to act in the client’s best interests, and the client’s overall requirements as to the character of the representation.” ABA Formal Opinion 99-414 notes generally that “informing the client of the lawyer’s departure in a timely manner is critical to allowing the client decide who will represent him.” Id. at 3 (footnote omitted). Although notice would ordinarily occur prior to the Lawyer’s departure from the Old Firm, it could occur afterward if the Lawyer’s resignation or termination took effect without advance notice to the other party.
B. File Transitions
1. Preeminence of Client-Decisions
File transitions from the Old Firm to the New Firm that result from the Lawyer’s lateral move are generally subject to the same considerations as when a client moves a matter from an Old Firm to a New Firm for other reasons. [n.10] As noted earlier, the decision on whether the client chooses to keep the work involved at the Old Firm, move it with the departing Lawyer to the New Firm or shift it to another firm altogether is the client’s alone. The Washington Supreme Court in Barr v. Day, 124 Wn.2d 318, 329, 879 P.2d 912 (1994), described this preeminent right of a client to choose legal counsel: “Unlike general contract law, under a contract between an attorney and a client, a client may discharge the attorney at any time with or without cause.” See also RPC 1.16(a)(3) (requiring withdrawal if a lawyer is discharged).
2. Client Files
File transition issues are addressed in detail in WSBA Advisory Opinion 181 (rev. 2009) and this opinion will not repeat that comprehensive discussion. In brief, however, Advisory Opinion 181 notes that RPC 1.16(d) requires a lawyer when an attorney-client relationship has been terminated to “take steps to the extent reasonably practicable to protect a client’s interests, such as . . . surrendering papers and property to which the client is entitled and refunding any advance payment of fee that has not been earned or incurred.” Advisory Opinion 181 defines “the file” broadly and provides guidelines for what must be provided to a former client (or a New Firm at the former client’s direction). Generally, Advisory Opinion 181 counsels that the entire file—including the electronic portions—should be provided subject to limited exceptions. The principal exceptions Advisory Opinion 181 identifies are: (1) documents subject to a protective order or similar confidentiality obligation that may control the distribution of particular documents within the file; and (2) “[m]iscellaneous material that would be of no value to the client,” which Advisory Opinion 181 describes as “papers [that] will not prejudice the client” including “drafts of papers, duplicate copies, photocopies of research material, and lawyers’ personal notes containing subjective impressions such as comments about identifiable persons.” [n.11]
RPC 1.16(d) also notes that a “lawyer may retain papers relating to the client to the extent permitted by law.” Advisory Opinion 181 counsels in regard to an Old Firm’s possessory lien rights concerning a client’s file under RCW 60.40.010(1)(a) that “[i]f assertion of the lien would prejudice the former client, the duty to protect the former client’s interests supersedes the right to assert the lien.” Id. at 1. [n.12]
Upon receipt of a client’s written instruction to transfer a file to New Firm or a third law firm, Old Firm has a duty to transfer the file as soon as reasonably possible to avoid prejudice to the client and departing Lawyer has a duty to cooperate as needed to facilitate a timely transfer. In addition, Old Firm has a duty under RPC 1.4 to keep the client reasonably informed about the status of the file transfer.
3. Client Names for Conflict Checks
RPC 1.6(b)(7) generally allows client names and limited matter information to be shared with a New Firm for conflict-checking purposes:
“(b) A lawyer to the extent the lawyer reasonably believes necessary:
. . .
“(7) may reveal information relating to the representation to detect and resolve conflicts of interest arising from the lawyer’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client.” [n.13]
Comment 13 to RPC 1.6 notes in this regard:
“Any such disclosure should ordinarily include no more than the identity of the persons and entities involved in a matter, a brief summary of the general issues involved, and information about whether the matter is terminated. Even this limited information, however should be disclosed only to the extent reasonably necessary to detect and resolve conflicts of interest that might arise from the possible new relationship.”
Therefore, unless the identity of a particular client or the nature of a particular client or matter is itself confidential, [n.14] a departing Lawyer may provide a New Firm with a list of clients and matters for conflict-checking purposes before Lawyer actually joins the New Firm. As a matter of best practice, firms are encouraged to work cooperatively with a departing Lawyer to provide lists of clients and matters (including, if/as needed, the names of adverse and involved persons) on which the Lawyer is working or has worked in the reasonably near past [n.15] so that appropriate conflict-checks can be performed. [n.16]
C. Contact with Old Firm Clients
After Lawyer has left the Old Firm, RPC 7.3(a) governs a Lawyer’s ability to contact Old Firm clients for whom s/he was not the principal handling attorney. At this writing, the Washington State Bar Association’s Board of Governors has recommended that the Washington Supreme Court amend RPC 7.3(a) in a way that would broaden Lawyer’s ability to solicit professional employment from Old Firm clients so long as the solicitation does not violate any of the four prohibitions in the proposed revision. Readers are encouraged to consult the most recent version of this rule available on the Washington courts’ website.
The personal dynamics of a lawyer departing a firm have the potential to outrun the important professional obligations all concerned have toward the clients involved. Lawyers and their respective Old and New Firms must ensure that client considerations remain paramount despite the often-difficult personal dynamics involved.
1. See generally Robert W. Hillman and Allison Martin Rhodes, Hillman on Lawyer Mobility (rev. 2d ed. 2017); Geoffrey C. Hazard, Jr., W. William Hodes and Peter R. Jarvis, The Law of Lawyering, § 15.11 (rev. 4th ed. 2016).
2. This advisory opinion focuses primarily on the departure aspect of lawyer mobility and the corresponding duties of the departing Lawyer and the Old Firm. The New Firm, too, has obligations in this setting. For example, job negotiations with a potential new-hire who is handling a matter opposite the New Firm may trigger conflict waiver obligations. See ABA Formal Op. 96-400 (1996) (surveying conflict issues arising from job negotiations with a lawyer representing an adverse party). Similarly, the New Firm should also be attentive to imputed conflicts under RPC 1.10(a) and potential screening to address those conflicts under RPC 1.10(d). See generally Daines v. Alcatel, 194 F.R.D. 678 (E.D. Wash. 2000) (applying Washington law and discussing lateral-hire screening).
3. For purposes of this advisory opinion, the term “principal handling attorney” means a lawyer who is primarily responsible for a particular matter or who is the firm’s primary contact with the client for the client’s work at the firm. See ABA Formal Op. 99-414 (1999) at 2-3 (addressing lawyer departure issues under the ABA Model Rules and defining its scope in similar terms). This definition would apply, for example, to a partner who has primary contact with a client on a matter. By contrast, it would not apply to a junior associate who worked on occasional legal research projects under the partner’s supervision in the matter involved. The dividing line, however, is inherently fact-specific—subject to the general legal standard of whether a particular lawyer’s departure triggers a duty to keep the client informed of “significant developments affecting the . . . substance of the representation.” RPC 1.4, Comment 3.
4. Cf. Florida RPC 4-5.8; Virginia RPC 5.8. ABA Formal Opinion 99-414 has provided guidance nationally in this area since its adoption in 1999. Washington lawyers with offices in other states are encouraged to consult resources available in those states if the matters affected by a lawyer’s departure are being handled in other states. Regionally, Alaska and Oregon have advisory opinions discussing the issues involved. See Alaska Bar Ethics Op. 2005-2 (2005); Oregon State Bar Formal Op. 2005-70 (rev. 2015). Court rules, such as CR 71(d) on withdrawal and substitution, may also apply if the matter involved is in litigation. See RPC 1.16(c) (requiring compliance with court rules on withdrawal).
5. Washington RPC 1.4 is patterned on the corresponding ABA Model Rule.
6. The guidance quoted implicitly assumes that the Lawyer is still at the Old Firm at the time the notice is provided and, accordingly, still has fiduciary duties to the Old Firm. See generally Holman v. Coie, 11 Wn. App. 195, 522 P.2d 515 (1974) (discussing intra-law firm fiduciary duties); see also In re Smith, 315 Or. 260, 266, 843 P.2d 449 (1992) (disciplining lawyer for misrepresentation by secretly having clients of old firm sign fee agreements with his soon-to-be new firm and noting “such conduct is a violation of the duty of loyalty owed by a lawyer to his or her firm based on their contractual or agency relationship.”). If the Lawyer has already departed the Old Firm and is no longer bound by those fiduciary duties, the nature of the competitive information provided may be broader as long as it is truthful.
7. Many malpractice carriers have template forms for notification letters available for their law firm insureds. The Oregon State Bar Professional Liability Fund, for example, has templates available for both joint and separate client notice letters on its web site at www.osbplf.org. The Oregon templates are not state-specific and are generally consistent with both this opinion and ABA Formal Opinion 99-414.
8. A departing Lawyer is not obliged to take a client to a New Firm and may be precluded from doing so in some instances due to non-waivable conflicts. Similarly, an Old Firm may conclude that it is no longer able to competently handle a client’s work due to a departure even if a client does not move with a departing Lawyer. For example, a departing Lawyer may have been the only person at the Old Firm with the specialized expertise needed by the client concerned. When neither the New Firm nor the Old Firm is able to continue the representation, both the Old Firm and the departing Lawyer should work cooperatively to assist the client in obtaining new counsel.
9. This advisory opinion discusses notice to the clients affected as distinguished from the Lawyer’s notice to the Old Firm that the Lawyer is departing. The RPCs do not address the latter except that any contractual notice requirement cannot be so lengthy as to amount to a prohibited restriction on the Lawyer’s right to practice under RPC 5.6(a). See generally WSBA Advisory Op. 2118 (2006) (discussing RPC 5.6(a) within the context of contractual non-competition provisions); see also ABA Formal Op. 94-381 (1994) (discussing ABA Model Rule 5.6(a) and noting that courts have often refused to enforce restrictions that violate state variants of the ABA Model Rule). The question of whether the Lawyer has a fiduciary duty to inform the Old Firm of the planned departure before notifying the clients involved is a substantive issue of fiduciary and contract law beyond the scope of the RPCs. See generally Holman v. Coie, supra, 11 Wn. App. 195 (discussing intra-law firm fiduciary duties); RPC 1.6, cmt. 13 (“A lawyer’s fiduciary duty to the lawyer’s firm may also govern a lawyer’s conduct when exploring an association with another firm and is beyond the scope of these Rules.”). As a matter of prudent practice, however, a lawyer contemplating leaving a firm should carefully examine any applicable fiduciary and contract considerations as well as the RPCs noted in this opinion. Similar fiduciary considerations apply to recruitment of Old Firm lawyers or staff while still with the Old Firm. In any event, a lawyer may not lie about the lawyer’s intentions. See RPC 8.4(c). ABA Formal Opinion 99-414 notes, for example, that a lawyer may generally conduct negotiations or explore alternative office space without telling the soon-to-be “old” firm, but the lawyer cannot lie about the lawyer’s intentions if confronted. Id. at 7 n.17.
10. This advisory opinion uses the term “files” to denote paper or electronic client files. It does not address the application of property or trade secret law to form templates or other generic materials that may be deemed proprietary by the Old Firm. See generally Robert W. Hillman, The Property Wars of Law Firms: Of Client Lists, Trade Secrets and the Fiduciary Duty of Law Partners, 30 Fla. St. U. L. Rev. 767 (2003). By contrast, “form” materials containing information classified as confidential under RPC 1.6 or applicable privilege law, should only be taken with the permission of the clients concerned.
11. Presumably, the first category could be addressed through amendment of the protective order or other confidentiality agreement involved to cover a New Firm. The second category is discretionary and may have less relevance when the same Lawyer is to handle the same matter at the New Firm.
12. Issues regarding accrued compensation, return of capital and entitlement to accounts receivable or other anticipated future fee income are matters of substantive contract and statutory law beyond the scope of the RPCs. See generally Dixon v. Crawford, McGilliard, Peterson & Yelish, 163 Wn. App. 912, 262 P.3d 108 (2011) (discussing the valuation of law firm partnership interest upon the withdrawal of one of the firm’s partners); McCormick v. Dunn & Black, P.S., 140 Wn. App. 873, 167 P.3d 610 (2007) (discussing valuation of law firm shareholder interest upon withdrawal of one of the law firm’s shareholders).
13. See also ABA Formal Op. 09-455 (2009) (discussing this issue generally prior to amendments to ABA Model Rule 1.6 and the Washington RPC 1.6 now reflected in RPC 1.6(b)(7)).
14. Comment 13 to RPC 1.6 cautions that in some circumstances the very fact of consultation may be confidential:
“[T]he disclosure of any information is prohibited if it would compromise the attorney- client privilege or otherwise prejudice the client (e.g., the fact that a corporate client is seeking advice on a corporate takeover that has not been publicly announced; that a person has consulted a lawyer about the possibility of divorce before the person’s intentions are known to the person’s spouse; or that a person has consulted a lawyer about a criminal investigation that has not led to a public charge). Under those circumstances, paragraph (a) prohibits disclosure unless the client or the former client gives informed consent.”
For a discussion of related issues of client identity specific to the attorney-client privilege, see generally Robert H. Aronson and Maureen A. Howard, The Law of Evidence in Washington, § 9.05[a] (rev. 5th ed. 2017).
15. Depending on the circumstances, lists of former clients and matters may need to be expanded in terms of the time covered so that potential former client conflicts under RPC 1.9 can be assessed.
16. If it is not possible for departing Lawyer and new Firm to evaluate a potential conflict of interest without disclosing client confidences to each other, one option might be to retain an intermediary lawyer to whom they may disclose client confidences pursuant to RPC 1.6(b)(4) and who may then analyze the conflict on their behalf. ABA Formal Op. 2009-455 (2009) at 5.