The Greatest American Lawyer

The Right Way To Quit Your Law Firm

This post deals with a recent lawsuit filed against GAL by his former firm over ethical conduct by that firm. One of the interesting things that I learned when I quit my law firm is that there are a large number of ethical rules which help lawyers understand the right way and wrong way to do it. I will be posting more regularly about the various ethics opinions in this area. Suffice it to say that there are some pretty important ethics principles which apply. The first is that the client always has the choice as to who will represent them. Just because the client signed a retainer with the former firm, does not mean the client has to stay with that firm. In fact, both the departing lawyer and the former firm have an obligation to quickly inform the client of the impending departure and advise the client of their absolute right to choose their counsel. Neither lawyer can do anything to interfere with the client’s right to decide who will represent them.

There are some ethics decisions which may suggest that a departing lawyer cannot contact the firm’s clients and unilaterally inform of their departure. Because of the dangers of improper solicitation, the ethics opinions strongly recommend that a joint letter be sent out from both the departing lawyer and the former firm with a return receipt envelope and checkbox for the client to indicate which law firm they have selected.

When I left my old firm, I immediately looked up the ethical rules. I decided early on that I was going to do it the "right way." I told my partners that I was leaving before taking any actions to start my new firm. I didn’t want them to hear on the street that I was looking for office space or otherwise setting a foundation for departure. Of course, I never even considered soliciting or contacting clients.

On the other hand, my old firm immediately went into emergency mode when they learned I was leaving. Big boss immediately started gathering information about clients and cases, deciding which cases they didn’t want to provide any further representation on (despite their obligation to do so) and which cases they wanted to stay. Instead of sending the clients a letter indicating that I would be departing, they spent all their time and energy counting money and strategizing.

The first agreement I received from my law firm surprised me. I didn’t know that there would be a "contract" concerning my departure. When I read the agreement, I immediately saw that it attempted to divide up clients as though they were playing cards. The firm had actually put together a list and asked me to sign a contract agreeing to how the clients would be divided. In one instance on the case that I am currently getting sued on, they actually sought my agreement that I would not represent the client even if requested to do so by the client.

Of course, I rejected the approach suggested and reminded them of the ethical obligations for all concerned. Unfortunately, I never sensed from the firm that there was any consideration besides their profits. The ethical obligations were simply a nuisance getting in the way of their ultimate goals. While we eventually did send a notice letter to clients, it went out just prior to my departure and, in the case I’m getting sued on, never went out at all.

If you are thinking of leaving your firm, I encourage you to do your best to meet your ethical obligations. Get informed on where the fences are. If your firm is like my old firm, you will have quite a chore staying in bounds. There were many days where I felt like my obligation to let the clients know what was happening was being intentionally thwarted by my old firm. They didn’t hesitate to tell me that they believed it would be an ethical violation for me to contact any of these clients directly. They used the ethics rules as an offensive weapon which would allow them to complete their analysis and decide where each client would go for themselves.

The lawsuit in which I am currently involved will test some of the ethical rules noted above. Will the court care that the client was treated as property and used as leverage in order to line a firm’s pockets with profits? Or will the court see this as an everyday event and treat it as a big "so what." From my point of view, the contested fee belongs to the client. It is the principle that I am after. Does the system even care anymore? Stay tuned…

GAL Gets Sued.

This post deals with a recent lawsuit filed against GAL by his former firm over ethical conduct by that firm. You may recall that there were a number of cases that came with me when I left my old law firm. I have paid well into six figures to my old firm and quantum meruit fee splits since I left. But there was one case I settled recently where it appears the old firm is not entitled to a quantum meruit fee. The case involves a young girl who was seriously injured in an auto accident. I represented her at my old firm and developed a very close relationship with the family. After I told my partners that I was leaving the firm, there was not much doubt about whom this client would select as her attorney moving forward. Consistent with the rules of professional conduct, a joint letter was drafted to each client indicating that I was departing the firm and allowing them to circle which firm they wanted to represent them moving forward. We had agreed that I would not contact these clients. The letter would indicate that the client could call me or the old firm with any questions.

One letter, however, never saw the mailbox. It turns out that a named partner in the firm intercepted the letter and threw it away. A couple of weeks after I had left the firm, I received a call from the client’s mother indicating that the client was extremely upset and quitting the case. When I inquired as to why she was quitting, the mother told me that she was extremely upset that she could not have me as her attorney. It turns out that the named partner from my old firm had called her up after throwing away the letter and indicated that she had a contract with the firm and that she would be reassigned to another attorney at the firm. Implicitly or explicitly, the client was led to believe that she had no choice of counsel.

It was a bold power play made by an attorney who literally had no relationship with this young, vulnerable and scared client. The lawyer’s contact had caused such extreme distress to this young lady, that she spent days crying. I am certain she wondered as to why I never told her that I was leaving the firm. How could she trust me if I didn’t even care enough about her to let her know I was departing? Of course, I did not know that the letter I had signed had been intercepted and thrown out by the partner.

After the case settled, I wrote a very nice letter to my contact at the old firm noting that there was an outstanding issue as to their entitlement to a fee. I told them that I had never heard the partner’s side of the story and invited him to contact me so we can discuss what had occurred. Instead, my old firm filed lawsuit, serving me by hand on Friday afternoon, just prior to leaving for the weekend on my tenth wedding anniversary.

I am sure that it is beyond their comprehension that they don’t get paid on cases where they have breached their ethical duty to the client and then fired. As in most states, the state I practice denies firms any quantum meruit claim on cases where they are terminated with just cause. But my old firm can only think in terms of what they’re entitled to. In addition to counting every penny on billable cases, they apparently were outraged by this suggestion that they might be denied their fee. In the firm’s 30-year history, many attorneys have left the firm under contentious circumstances. None has been sued before.

I find it interesting that they ended up doing what I didn’t have the guts to do. I could have sued and asked a court to deny them their fee. I don’t want to have to be the one decide whether or not they are still entitled to a fee. I would love to have a jury decide that issue. I would love to get the issue in front of a local jury.

I figured they would propose some sort of resolution or arbitration in order to avoid airing their dirty laundry in public. But it occurs to me know that they don’t view what they did as wrong or bad. To them, there is no client. It is only fees. They are so blind to any other consideration that they can’t see what they have now done to themselves.

In my perfect world, a local jury in front of our local court would have decided this issue. They’ve set the table and I can hardly wait to see what kind of meal is served up by Lady Justice. (Of course, their quantum meruit portion sits in the trust account waiting resolution).