HOW TO LEAVE YOUR LAW FIRM and Live to Tell the Tale

Lawyer mobility is a commonplace in the modern legal economy. And while some partings are bound to be emotionally fraught, careful adherence to best practices can minimize any legal or ethical jeopardy. Here’s how.

BY CHARLES E. LUNDBERG AND ARAM V. D ESTEIAN

16 Bench&Bar of Minnesota V September 2015 www.mnbar.org n today’s legal market, the idea Notifying Current Clients: form and contents of the communication of an associate or a partner leav- How and When? are critically important. ing their firm to join another has The process of informing the client The first question is, who is a “cli- become almost routine. Largely of the lawyer’s departure can implicate ent” of the leaving lawyer? ABA Formal gone are the days when an attor- numerous ethical rules and legal consid- Opinion 99-414 provides some guidance ney spent her entire career with erations relating to solicitation of clients, for determining who the leaving lawyer is aI single law firm. But the mere fact that fiduciary duties, conflicts of interest, and ethically obligated to inform. The formal something has become routine does not unfair competition. It is universally rec- opinion indicates that the lawyer must mean it is not potentially dangerous. A ognized that at some point after an attor- provide notice to “those clients for whose lawyer’s decision to leave her firm to join ney has made the decision to join a new active matters she currently is responsi- another, often termed “lawyer mobility,” law firm, the lawyer is under an ethical ble or plays a principal role in the delivery is fraught with potential legal and ethical obligation to inform her current clients of legal services,” and makes clear that pitfalls. of the departure. Under the MRPC, for the leaving lawyer to contact current Whether you are the “leaving lawyer,” this obligation is derived from Rule 1.4, clients regarding her departure does not the “departed firm,” or the lawyer’s which requires a lawyer to communicate constitute impermissible solicitation.3 “new firm,” there are legal and ethical information to the client that may affect Under MRPC 7.3, the parties are also ramifications for the decisions you the status of that client’s matter. Simi- limited in how they communicate with make in this situation. Accordingly, this larly, ABA Formal Opinion No. 99-414, the affected clients. Rule 7.3 allows the article seeks to provide a background of which was published to provide guidance leaving lawyer to contact her current or the issues that arise from an attorney’s on the ethical issues raised by lawyer mo- former clients in person or by telephone decision to change firms, as well as bility, states that “notification of current without fear of violating the standard of a summary of “best practices” that clients is required.” The key questions in- conduct relating to solicitation. Under minimize the potential problems arising volve how and when the leaving lawyer’s MRPC 7.3(a)(2), a lawyer may solicit from this situation. clients should be informed of the lawyer’s any individual with whom the lawyer has departure. a “family, close personal, or prior profes- CHALLENGES FOR THE sional relationship.” LEAVING LAWYER AND Best practice: Joint communica- But ABA Formal Opinion 99-414 THE DEPARTED FIRM tion to affected clients. The ABA, the provides that a lawyer does not have a Each of the parties involved in a law- Minnesota Office of Lawyers Professional “prior professional relationship” “solely yer’s decision to leave a law firm is faced Responsibility, and virtually every other by having worked on a matter for the with potential challenges. And as one applicable authority on lawyer mobility client along with other lawyers in a way can imagine, the unique professional and recommend that the leaving lawyer and that afforded little or no direct contact emotional issues conjured by this inher- the departed firm should issue a joint with the client.” Rather, the lawyer must ently uncomfortable situation can lead to communication informing the affected have had some form of significant, sub- questionable decision-making. It’s a lot clients of the departure.1 Under these stantive client interaction to establish like going through a divorce. circumstances, the leaving lawyer and a “prior professional relationship” that the departed firm can work together to permits in-person or telephone solicita- Whose Clients Are They? craft a communication to the affected tion. The ABA Opinion’s treatment of Characteristically, a lawyer is hired by clients informing them of the lawyer’s this issue might be criticized as overly a new firm with the belief that the attor- impending departure, informing the cli- restrictive and potentially even as an ney has a “book of business” that will fol- ents that it is their choice as to who will unconstitutional restriction on speech. low the attorney to the new firm. In real- continue the representation, and provid- But just because the leaving lawyer may ity, that phrase is misleading. To be sure, ing an election form for each client to contact the affected clients in person or lawyers have clients. But it is entirely up complete and return indicating its pref- via telephone, that does not mean that to those clients to decide whether they erence of counsel. Moreover, the leaving the lawyer has free rein to say whatever will follow the attorney to her new firm lawyer and the departed firm can agree she pleases. If the leaving lawyer is still or continue to be represented by attor- as to which clients to inform, avoiding a employed by the firm at the time of the neys at the departed firm. And lawyers battle over who exactly to designate as a communication with the client, she still who seek to ensure their clients will “client” of the leaving lawyer. has fiduciary obligations to that firm. “stick with them” at their new firm by Moreover, the leaving lawyer and the discussing their planned departure prior Option two: Individual commu- departed firm must both be careful not to informing their current firm do so at nication to affected clients. The level to run afoul of the ethical rules regarding their own peril. of cooperation required for a joint com- client communication and solicitation. Significantly, the Minnesota Rules of munication may be difficult or impossible Under MRPC 7.1, a lawyer is re- Professional Conduct (MRPC) do not under certain circumstances. Moreover, stricted in what she can say to her cli- recognize the concept of “firm clients” or it is possible that informing the firm of ents regarding the departure, and how. “institutional clients.” Rather, the MRPC the lawyer’s intention to leave may re- Rule 7.1 states that the communication recognize only a lawyer-client relation- sult in immediate termination.2 If a joint cannot be “false or misleading.” Accord- ship. In any event, it is essential that communication is not possible, the leav- ingly, the leaving lawyer may not inflate the leaving lawyer and the departed firm ing lawyer is still under an ethical obliga- or otherwise misrepresent her involve- both recognize that it is ultimately the tion to provide notice to those clients for ment in working on the client’s matter. clients’ choice as to who will continue whom the lawyer is primarily responsible. Similarly, MRPC 7.1 precludes the law- to represent them, and that the process The departed firm will frequently also is- yer from misrepresenting the role that of informing those clients of the lawyer’s sue an independent communication to other attorneys who will remain at the departure and discussing future represen- the affected client in an attempt to main- departed firm had in the representation. tation must be carefully considered in or- tain the client’s business. If such indi- These same obligations apply to the law- der to avoid potential pitfalls. vidual communications are required, the yers at the departed firm, meaning they www.mnbar.org September 2015 V Bench&Bar of Minnesota 17 A leaving lawyer should normally give notice of the departure to her firm before contacting clients in order to avoid accusations of impermissible solicitation.

cannot downplay or otherwise minimize ing notice to the firm may comply with to departure, although there is conflict- the leaving lawyer’s involvement in a ethical rules, but it is likely to open a ing authority. The Restatement (Third) case in an attempt to induce the client Pandora’s box of potential problems re- of the Law Governing Lawyers, Section to stay with the departed firm. It is also lating to fiduciary duties and any number 9(3) provides that: impermissible for the leaving lawyer or of other legal (rather than ethical) issues. the departed firm to unfairly denigrate or If the leaving lawyer decides to ignore absent an agreement with the firm disparage their former colleague(s).4 this authority and notify her clients be- providing a more permissive rule, a fore resigning from the firm, that com- lawyer leaving a law firm may solic- When to Inform Affected Clients: munication must, at a minimum, con- it firm clients: (a) prior to leaving Options and Best Practices form with the standard set forth in ABA the firm: (i) only with respect to The question of when to inform the Formal Opinion 99-414. The Opinion firm clients on whose matters the leaving lawyer’s clients is of primary im- provides the applicable ethical standard lawyer is actively and substantially portance to all parties. The big issues whenever the leaving lawyer makes her working; and (ii) only after the arise when the leaving lawyer’s notifica- initial in-person or written notice inform- lawyer has adequately and timely tion to the client becomes a solicitation, ing a client of her upcoming departure. informed the firm of the lawyer’s especially when the leaving lawyer has The standard is applicable regardless of intent to contact firm clients for not yet notified her firm of her intent to when that communication is made. To that purpose….. leave. Thus, while the issues of notifi- comply with the ethical rules, the ABA cation and solicitation are conceptually Formal Opinion provides that the notice Accordingly, under the Restatement ap- separate, they often overlap. Practically should conform to the following: proach, the leaving lawyer may inform speaking, a leaving lawyer is unlikely to and solicit clients after giving notice to notify her client of her intent to leave her (1) The notice should be limited the departed firm but before leaving.7 firm to join another without, at a mini- to clients whose active matters But there is case law to the contrary.8 mum, informing the client of where she the lawyer has direct professional This conflicting authority demonstrates is going and that she would like to con- responsibility for at the time of the the inherent tension between the par- tinue the representation. As a result, the notice; ties competing to maintain the client timing of the leaving lawyer’s communi- (2) The departing lawyer should relationship. In some cases, the departed cation with clients implicates significant not urge the client to sever its rela- firm will not want to keep the leaving tensions between her interests and the tionship with the firm, but may in- lawyer at the firm while she seeks to so- interests of the departed firm in compet- dicate the lawyer’s willingness and licit affected clients. The leaving lawyer’s ing to retain the affected clients. ability to continue her responsibil- solicitation of clients while still employed Actually soliciting the client prior to ity for the matters upon which she with the firm also raises a risk of breach of informing the law firm exposes the leav- currently is working; fiduciary duty, especially when the lawyer ing lawyer to potential claims for unfair (3) The departing lawyer must make utilizes the departed firm’s resources to competition, tortious interference with clear that the client has the ultimate solicit affected clients. Some au- contract, breach of fiduciary duty or right to decide who will complete or thorities, including the estimable Robert violation of the duty of loyalty owed by continue the matters; and Hillman, the author of the treatise Hill- a partner or employee.5 Accordingly, a (4) The departing lawyer must not man on Lawyer Mobility, suggests that the leaving lawyer should normally give no- disparage the lawyer’s former firm. departing lawyer may solicit a client after tice of the departure to her firm before resignation so long as the solicitation oc- contacting clients in order to avoid accu- It would be wise to keep detailed notes curs to permit the departed firm time to sations of impermissible solicitation. of this communication to ensure a clear compete, the solicitation is not done in and accurate record of what was com- secret, and the client is advised that it is Notification and solicitation prior municated to the client, as protection in free to choose counsel.9 Although there to notifying the current firm. While the event of a claim of impropriety by the is still debate on the question of the tim- ABA Formal Opinion 99-414 suggests departed firm. And although conforming ing of solicitation, the best practice is to that the leaving lawyer may ethically in- to these recommendations will minimize have an open conversation between the form her clients of the departure before the leaving lawyer’s risk of breaching the leaving lawyer and the departed firm giving notice to her employer, scholars applicable ethical rules, it does not elimi- about the transition process and how to and practitioners in this area have not- nate the risk of litigation. notify affected clients. ed that the ABA Opinion “offers a very specific point on the timing and solicita- Notification and solicitation af- Other Non-Ethical Principles tion under ethics standards and without ter giving notice but prior to depar- Implicated regard to fiduciary duties owed to firms ture. Most authorities recognize that In addition to the ethical consider- or colleagues.”6 Informing a client of the an attorney may solicit clients after her ations noted above, a leaving lawyer must leaving lawyer’s departure before provid- resignation from the law firm but prior also consider the legal and fiduciary issues

18 Bench&Bar of Minnesota V September 2015 www.mnbar.org that arise from her decision to leave her her former firm, has she misappropriated opinions, business records, witness state- law firm. If not, the leaving lawyer may her former firm’s trade secrets? This was ments, and other materials that may have be faced with litigation against her for- a hotly debated issue in recent litigation evidentiary value. In other words, the cli- mer colleagues. Such litigation is almost between two well-known Minnesota law ent is entitled to receive much of what always ugly. The departed firm may assert firms.17 (Disclosure: The authors’ firm ad- the terminated attorney has produced. claims against the leaving lawyer (and vised the leaving attorney and new firm However, the terminated attorney often the new law firm) for breach of fi- in this matter.) In that case, the law firm does not need to return everything, espe- duciary duty, misappropriation of trade alleged that a departing partner violated cially if the attorney has not been paid in secrets, breach of contract, unjust enrich- Minnesota Uniform Trade Secrets Act full. In matters with pending claims or in ment, or tortious interference with con- (MUTSA), Minn. Stat. §325C.01 et seq., litigation, a nonpaying client is not enti- tract (or prospective economic relations), by taking the firm client list with her to tled to documents in the lawyer’s file that among others. Many of these claims are her new firm. Courts in other jurisdic- have not been filed or served, including: especially likely to be implicated where tions have held that a law firm’s client lawyer notes, internal memoranda, and the leaving lawyer solicits her clients be- list may be a trade secret.18 The Hen- documents obtained by third parties.20 fore informing the firm. But regardless of nepin County District Court denied a In non-litigation matters, a nonpaying what conduct led to the asserted claims, request for a Temporary Restraining Or- client is not entitled to drafted but unex- a leaving lawyer and new law firm should der, in part because it did not believe the ecuted documents.21 be cognizant of potential liability. departed firm had a likelihood of success The terminated attorney also may not in establishing its claim for misappropria- condition the return of client papers and Fiduciary duty claims. Claims for tion. Accordingly, it is unclear whether property on payment of the lawyer’s fee.22 breach of fiduciary duty can arise in sev- a Minnesota court would recognize a Similarly, a terminated attorney may not eral contexts. First, an employee owes a law firm’s client list as a trade secret. At charge a client for the costs of duplicat- duty of loyalty to her employer. Accord- the margins, it seems clear that a leav- ing or retrieving the client’s file or prop- ingly, an attorney may breach her fidu- ing lawyer may take with her the contact erty unless the client has agreed to such ciary duties to her employer by compet- information for those clients with whom a charge, in writing, prior to the termi- ing with the employer through improper she has a prior professional relationship, nation of the lawyer’s services.23 Regard- solicitation of clients or misappropriation and that a leaving lawyer should not take less of whether the leaving lawyer or the of confidential or proprietary information with her lists of other clients represented departed firm is chosen by the client to possessed by the employer. Second, a part- by the departed firm with whom she had continue the representation, both parties ner owes fiduciary duties to her partners.10 no substantial professional relationship. have an ethical obligation under MRPC Among these fiduciary duties is a require- 1.16 to protect the client’s interests fol- ment to disclose material facts relating to Withdrawal and File Transfer lowing termination and promptly forward the partnership.11 Courts outside Min- Once the client has made its decision the client file to the client or the lawyer nesota have held that a leaving lawyer’s as to who will continue the representa- of the client’s choice. conduct, such as concealing the intention tion—the leaving lawyer, the departed to resign, surreptitiously meeting with an- firm, or another attorney—the affected What Can the Leaving Lawyer other firm to offer to transfer clients in ex- parties have ethical obligations to protect Take With Her? change for partnership, or inducing other the client’s interests. MRPC 1.16 gener- A leaving lawyer’s decision to take employees to leave with the lawyer, is a ally provides the applicable standard of certain information, such as client lists, breach of fiduciary duty.12 In these cases, conduct for terminating a representa- following her departure from the firm damages may include the departed firm’s tion. If the client has selected the leaving may have serious consequences. But lost profits or recoupment of compensa- lawyer to continue the representation, what can a leaving lawyer take with her tion paid to the leaving lawyer during the MRPC 1.16(a)(3) requires the departed to the new firm? period in which she was in breach.13 firm to withdraw.19 From that point for- Client files generally follow the cli- ward, under MRPC 1.16(d), the de- ent. But what if the client is not follow- Tortious interference claims. A parted firm is ethically obligated to “take ing the leaving lawyer to the new firm? leaving lawyer and the new firm may steps to the extent reasonably practicable ABA Formal Opinion 99-414 provides also be faced with claims for tortious to protect a client’s interests,” including that the “lawyer does not violate any interference with contract or tortious “surrendering the papers and property to Model Rule by taking with her copies of interference with prospective economic which the client is entitled, and refund- documents that she herself has created relations.14 These claims arise from either ing any advance payment of fees or ex- for general use in her practice.” While the leaving lawyer’s or new law firm’s penses that has been incurred or earned.” that seems correct, it may be too broad. successful solicitation of clients to termi- MRPC 1.16(e) lists the “papers and Many sophisticated clients now require nate their retainer agreements with the property” the client is entitled to, in- as a condition of retaining a law firm that departed firm. As with claims for breach cluding: (1) the papers and property de- client documents will not leave the firm, of fiduciary duty, Minnesota courts have livered to the lawyer by or on behalf of or will be subject to destruction after a not yet applied these claims in the con- the client; (2) the papers and property certain period, or both. Similarly, a non- text of lawyer mobility, but courts in for which the client has paid the lawyer’s disclosure agreement or protective order other jurisdictions have done so.15 In fees and reimbursed the lawyer’s costs; would govern where applicable, making Minnesota, the remedy for tortious inter- (3) all pleadings, motions, discovery, it impermissible for the leaving lawyer ference may include damages reasonably memoranda, correspondence, and other to take documents that she created or equivalent to the revenue lost by the tor- litigation materials in pending claims or that would normally be in the public do- tious conduct.16 litigation matters; and (4) all items for main, such as pleadings and briefs. In any which the lawyer has agreed to advance event, leaving lawyers should be careful Misappropriation of trade secrets. costs regardless of whether the client has to avoid taking other documents such as When a leaving lawyer departs her former reimbursed the lawyer for the costs and fee schedules and other business infor- firm and brings with her the client lists of expenses, including depositions, expert mation from their former firms. www.mnbar.org September 2015 V Bench&Bar of Minnesota 19 Among the most pressing issues for the incoming law firm is the process by which it identifies potential conflicts of interest…

CHALLENGES FOR THE minated.”26 But even this limited informa- tions between the parties “have moved INCOMING LAW FIRM tion should be disclosed “only to the extent beyond the initial phase” such that “sub- Lawyer mobility presents its own set reasonably necessary to detect and resolve stantive discussions have taken place.” of issues for those firms looking to absorb conflicts of interest that might arise….”27 When hiring lateral associates, this may a leaving lawyer. Among the most press- These provisions will provide suf- mean that conflicts information may ing issues for the incoming law firm is the ficient guidance in most situations, but not need to be shared until an offer of process by which it identifies potential what about client matters of particular employment has been made contingent conflicts of interest and, to the extent a sensitivity? Under those circumstances, upon clearing conflicts.30 Conversely, possible conflict is uncovered, how the any form of limited disclosure “is prohib- when hiring a lateral shareholder, con- incoming firm proceeds to ensure com- ited if it would compromise the attorney- flicts information likely must be shared pliance with the ethical rules in manag- client privilege or otherwise prejudice the much earlier, but not before the discus- ing that conflict of interest. client.”28 The comments to MRPC 1.6 sions have progressed to the point where and ABA Formal Opinion 09-455 pro- the parties are reasonably committed to Clearing Potential Conflicts: vide similar examples of such situations, proceeding with the negotiations. ABA Formal Opinion 09-455 such as “the fact that corporate client is Interestingly, the guidance provided and the MRPC seeking advice on a corporate takeover by the ABA Opinion is more restrictive “[B]efore a moving lawyer joins a new that has not been publicly announced” than necessary for lawyers practicing in firm, the Model Rules and the common or “that a person has consulted a lawyer Minnesota. The ABA Model Rules lack law require the lawyer and the firm to about the possibility of a divorce before a counterpart to MRPC 1.6(b)(2), which detect and resolve conflicts of interest to the person’s intentions are known to the permits a lawyer to disclose non-privi- protect their clients and former clients, person’s spouse…..” leged information relating to the repre- even if only one party to the move un- When such circumstances are present, sentation of a client when “the lawyer dertakes that actual conflicts analysis.”24 or when significantly more information reasonably believes the disclosure would But how does the leaving lawyer comply is required to fully clear a conflict, client not be embarrassing or likely detrimen- with her ethical obligation to detect and consent is required. If the client refuses to tal to the client” and where the client resolve conflicts while also abiding by give consent to provide information to the has not requested that the information the ethical obligation established under other firm, the ABA Formal Opinion sug- be kept confidential. Thus, under the MRPC 1.6(a) to “not knowingly reveal gests utilizing an independent, third-party MRPC, a lawyer may disclose informa- information relating to the representa- attorney to serve as intermediary to receive tion to clear a conflict so long as it is not tion of a client”? Both the ABA and the and analyze conflicts information in con- detrimental to the client, regardless of MRPC recognize this inherent conflict fidence.29 The intermediary may advise the stage of the recruitment process. and provide guidance to permit the par- the parties generally without disclosing ties to ethically detect and clear conflicts. any facts to the other. The ABA Formal Conflicts of Interest, Imputation ABA Formal Opinion 09-455 and Opinion provides that utilizing an inde- of Conflicts, and Screening MRPC 1.6 (and the comments thereto) pendent intermediary attorney “should not There are a number of questions that recognize that “lawyers in different firms compromise any privilege nor frustrate the arise if a conflict is identified during the may need to disclose limited information reasonable expectations of a client.” screening process. These include the na- to each other to detect and resolve con- Under any circumstance, the informa- ture of the conflict, whether screening flicts of interest…..”25 MRPC 1.6(b)(11) tion disclosed in detecting and clearing is sufficient, and disqualification. Given permits a lawyer to disclose information conflicts can be used or disclosed only to the complexity and importance of these if the “lawyer reasonably believes the the extent necessary to comply with the issues, this article can only provide a brief disclosure is necessary to detect and re- ethical obligations regarding conflicts. summary of each in relation to the ques- solve conflicts of interest arising from the Accordingly, neither the leaving lawyer tion of lawyer mobility. However, there is lawyer’s change of employment…..” But nor the incoming firm should utilize this significant scholarship that can provide what does that mean the leaving lawyer information for any other purpose. a more in-depth analysis on these sub- and the incoming firm can ethically dis- jects.31 If a conflict of interest is identi- close? And when should the parties pro- When to share conflicts informa- fied, the incoming law firm must analyze vide such information? tion. Having ascertained what informa- the nature of the conflict and whether tion may be exchanged to detect and clear the conflict may be managed by effective What to disclose. The comments to conflicts, the question remains when screening of the leaving lawyer or by the MRPC 1.6 provide that a lawyer’s disclo- that information should be exchanged. consent of the affected clients. sure should “ordinarily include no more ABA Formal Opinion 09-455 provides MRPC 1.7 to 1.11 govern conflicts of than the identity of the persons and enti- that “conflicts information should not be interest and imputation. Under MRPC ties involved in a matter, a brief summary disclosed until reasonably necessary….” 1.10(a), “[w]hile lawyers are associated of the general issues involved, and infor- According to the opinion, conflicts infor- in a firm, none of them shall knowingly mation about whether the matter has ter- mation should be shared when negotia- represent a client when any of them

20 Bench&Bar of Minnesota V September 2015 www.mnbar.org practicing alone would be prohibited from An affected client can also give and restrict its use, so long as the firm’s doing so by Rule 1.7 or 1.9…..” The rule written consent to the representation.36 own conduct treats such information as continues to exempt certain “personal Of course, this general rule has proprietary and confidential.39 interest conflicts” (such as the political exceptions. MRPC 1.7 and the comments It is important to note that all poli- beliefs of a lawyer that prevent her from thereto provide the standard for when cies must comply with the provisions of representing a client in a particular a client may give informed consent. A MRPC 5.6, which renders impermissible matter).32 Otherwise, whenever a leaving client may not consent to the conflicted (and therefore unenforceable) any agree- lawyer joins the incoming firm, her representation where “the institutional ment restricting the right of a lawyer to conflicts of interest are imputed to all of interest in vigorous development of each practice after leaving a law firm.40 Law her new colleagues. client’s position when the clients are firms must be careful to craft their inter- The mere fact that an imputed con- aligned directly against each other in the nal policies to reflect that the firm cannot flict of interest exists does not, on its same litigation or other proceeding before restrict the leaving lawyer’s use of client own, require the incoming firm to be dis- a tribunal.” Thus, a leaving lawyer may information for clients they represented qualified from continuing the conflicted not switch sides in the same litigation while at the firm.41 representation. Rather, MRPC 1.10(b) and obtain informed consent from provides that even if a particular lawyer the former client to permit continued Conclusion would be prohibited from representing representation. If informed consent Although the issue of lawyer mobil- a client due to a conflict, the firm may cannot be obtained, and screening is ity in modern legal practice presents continue the representation if: (1) the not permitted, the conflicted attorney numerous challenges, a lawyer’s lateral lawyer’s information is unlikely to be and her firm may be disqualified from move to another law firm can be (and significant; (2) the lawyer is subject to continuing the representation.37 often is) accomplished without serious adequate screening measures to prevent conflict. To do so often requires coopera- disclosure and involvement of the new POLICIES REGARDING tion, transparency, and communication, lawyer; and (3) notice of the screening is LAWYER MOBILITY conduct that can be difficult in an often- given to all affected clients.33 Given the many challenges that arise emotional parting of ways. There are nu- Screening is used “to prevent the dis- from an attorney’s lateral move to an- merous reasons—financial, reputational, closure of the confidential information other law firm, firms should take steps personal—for all parties to ensure a law- and to prevent involvement by that law- to incorporate policies relating to lawyer yer’s smooth transition from one firm to yer in the representation.”34 The Minne- mobility in their partnership or employ- another. But ultimately, as lawyers it is sota Supreme Court’s decision in Lennart- ment agreements. In particular, law firms our obligation to act in the best interests son v. Anoka-Hennepin Sch. Dist. No. 11, should incorporate into their partnership of our clients, and ultimately our clients 662 N.W.2d 125 (Minn. 2003), provides or employment agreements that the firm benefit when the leaving lawyer is able to the standard for determining whether a and the lawyer agree to abide by the stan- transition from one firm to another with- conflict requires disqualification. In that dard established in ABA Formal Opinion out any (apparent) conflict.V case, the Court held that under MRPC 99-414 if the lawyer departs the firm. By 1.10(b), an imputed conflict will result in agreeing to abide by Opinion 99-414, the disqualification “unless the information law firm and the attorney agree to issue a CHARLES LUNDBERG communicated to the lawyer [while at the joint communication to all affected cli- has been a member of prior firm] is unlikely to be significant in ents, informing the clients that it is their Bassford Remele for the same or a substantially related matter, choice as to who will continue the rep- more than 35 years. appropriate screening is implemented, resentation, and providing an election This fall, he will retire and notice is given to all affected cli- form for each client to complete and re- from the firm but ents.”35 The Court’s ruling in Lennartson turn indicating its preference of counsel. continue to consult on interpreted the requirements of MRPC In so agreeing, the parties can preemp- matters involving legal 1.10(b) conjunctively, meaning the infor- tively address some of the most signifi- ethics and malpractice mation possessed by the conflicted lawyer cant issues that arise from independent and other areas of the law of lawyering. must be “unlikely to be significant in the communications to clients. Chuck served for 12 years on the Minnesota same or a substantially related matter” Law firms may also consider policies Lawyers Professional Responsibility Board, and the new firm must be able to imple- dealing with use of firm documents or including six years as board chair, and is the ment “appropriate screening” measures. client lists, although these policies are in- immediate past president of the Association The comments to MRPC 1.0 provide effective to the extent they conflict with of Professional Responsibility Lawyers. guidance as to proper screening mea- the MRPC. For instance, a law firm may [email protected] sures. The comments state that: (1) the institute a policy against a lawyer’s copy- personally disqualified lawyer should ac- ing of firm documents for outside use, knowledge the obligation not to commu- thus requiring the leaving lawyer to re- ARAM DESTEIAN is an nicate with any other lawyers in the firm quest permission to copy and take docu- attorney with Bassford with respect to the matter; (2) the other ments with her when she leaves.38 On the Remele. He concen- lawyers in the firm are instructed regard- other hand, if the client chooses the leav- trates his practice in ing the screening and not to discuss the ing lawyer and the new firm to continue complex litigation, matter with the disqualified lawyer; (3) the representation, the leaving lawyer business litigation, and the disqualified lawyer should be denied may take the client file for use in repre- professional liabil- access to firm files or other information senting the client. Similarly, a law firm ity defense and legal relating to the matter; and (4) these may consider instituting confidentiality ethics claims. He has screening procedures are implemented as policies regarding the use of client lists in co-authored several articles relating to legal soon as practical after the lawyer or firm its agreements, handbooks, or manuals. ethics and professional responsibility. knows or reasonably should know of the When utilized, these policies should state [email protected] need for screening. that client information is a trade secret www.mnbar.org September 2015 V Bench&Bar of Minnesota 21 Given the many challenges that arise from an attorney’s lateral move to another law firm, firms should take steps to incorporate policies relating to lawyer mobility in their partnership or employment agreements.

Notes LEXIS 147655 (E.D. Pa. 12/22/2011). 1 See, e.g., ABA Formal Opin. No. 99-414; Martin C. 16 Storage Tech., Corp. v. Sysco Sys., Inc., 395 F3d 921 Cole, “Update on Law Firm Departures,” Bench & Bar (8th Cir. 2005). of Minnesota, June, 2010. 17 Zimmerman Reed v. Genevieve Zimmerman and 2 See ABA Formal Opin. No. 99-414 at 5. Meshbesher & Spence, No. 27-CV-14-14988 (Henn. 3 Id (“a departing lawyer does not violate Model Cnty. Dist. Ct. 12/8/2014). Rule 7.3(a) by notifying those clients that she is 18 See e.g., Reeves v. Hanlon, 95 P.3d 513 (Cal. 2004); leaving….”) Fred Siegel Co., L.P.A. v. Arter & Hadden, 707 N.E.2d 4 See, e.g., Joint Formal Opinion 99-100 of the 853 (Ohio 1999). Pennsylvania and Philadelphia Bar Assoc., at 2 (the 19 See also Ohio Supreme Court Board of former firm “should refrain from disparaging remarks Commissioners on Grievances and Discipline Opinion and comparisons. . . .”); Ohio Supreme Court Board of 98-5, at 2 (“If a client discharges an attorney, the Commissioners on Grievances and Discipline Opinion attorney must withdraw….”); Martin A. Cole, “At 98-5, 4/3/1998 (“The law firm should not unfairly Odds With Your Client,” Bench & Bar of Minn., disparage the departing lawyer to the client.”); State Sept. 1997, at 16 (“Withdrawal from representation is Bar of California Standing Committee on Professional mandatory if the client discharges the lawyer.”) Responsibility and Conduct Formal Opinion No. 20 William J. Wernz, Minnesota Legal Ethics: A Treatise 1985-86 (“lawyers must act professionally by subliming (5th Ed. 2015) at 704. their own feelings for the benefit of the client.”) 21 Id. 5 See Brown & Bins v. Lehman, C5-93-415, 1993 Minn. 22 MRPC 1.16(g). App. LEXIS 961, *8 (Minn. Ct. App. 9/22/1993); see 23 MRPC 1.16(f). also Graubard Mollen Dannett & Horowitz v. Moskovitz, 24 ABA Formal Ethics Opinion 09-455. 653 N.E.2d 1179 (N.Y. 1995) (departing firm suing 25 Comments to MRPC 1.6, at ¶ 12. for breach of fiduciary duty arising from solicitation of 26 Id. clients prior to resigning from firm); Dowd & Dowd, 27 Id; see also ABA Formal Ethics Opinion 09-455 (the Ltd. v. Gleason, 693 N.E.2d 358 (Ill. 1998) (a departing disclosure of information “should be no greater than lawyer’s contact with clients may breach fiduciary reasonably necessary to accomplish the purpose of duties owed to partners). detection and resolution of conflicts of interest.”) 6 Allison D. Rhodes & Robert W. Hillman, Client Files 28 MRPC 1.6, cmt. 12. and Digital Law Practices: Rethinking Old Concepts in 29 ABA Formal Ethics Opinion 09-455 at 6. an Era of Lawyer Mobility, U.C. Davis Legal Studies 30 Id. at 7. Research Paper Series No. 236 (December 2010) 31 See William J. Wernz, Minnesota Legal Ethics: A 7 Accord Joint Formal Opinion 99-100 of the Treatise (5th Ed. 2015), at 271-423. Pennsylvania and Philadelphia Bar Assoc. 32 See MRPC 1.10, cmt. 3. 8 See, e.g., Meehan v. Shaughnessy, 533 N.E.2d 1255 33 See MPRC 1.10(b); see also Martin A. Cole, (Mass. 1989). “Screening Conflicted Lawyers Under Rule 1.10,” 9 See §4.8.3.2. Minnesota Lawyer (5/28/2001). 10 Appletree Square I Ltd. P’ship v. Investmark, Inc., 494 34 MRPC 1.10(b)(2). N.W.2d 889, 893 (Minn. Ct. App. 1996) 35 Lennartson, 662 N.W.2d at 131. 11 Id. (“Parties in a fiduciary relationship must disclose 36 See MRPC 1.7, cmts. 19-22. material facts to each other.”) 37 See, e.g., State v. 3M, 845 N.W.2d 808 (Minn. 2014); 12 See, e.g., Dowd & Dowd, Ltd. v. Gleason, 816 N.E.2d Lennartson, 662 N.W.2d at 135. (Ill. Ct. App. 2004) and Kantor v. Bernstein, 225 A.2d 38 Douglas R. Richmond, Yours, Mine, and Ours: Law 500 (N.Y. App. Div. 1996). Firm Property Disputes, 30 N. Ill. U. L. Rev. 1, 25 13 Id. (2009). 14 See Kallok v. Medtronic, Inc., 573 N.W.2d 356, 362 39 Id. at 16. (Minn. 1998) (tortious interference with contract) 40 MRPC 5.6(a) provides that “[a] lawyer shall not and Gieseke ex rel. Diversified Water Diversion, Inc. v. participate in offering or making: (a) a partnership, IDCA, Inc., 844 N.W.2d 210, 219 (Minn. 2014) for shareholder, operating, employment, or other similar the standards to establish these claims. type of agreement that restricts the right of a lawyer to 15 See, e.g., Adler, Barish, Daniels, Levin & Creskoff v. practice after termination of the relationship, except Epstein, 393 A.2d 1175 (Pa. 1978); Feldman & Pinto, an agreement concerning benefits upon retirement.” P.C. v. Seithel, Civ. Act. No. 11-5400, 2011 U.S. Dist. 41 Richmond at 17.

22 Bench&Bar of Minnesota V September 2015 www.mnbar.org