If we’re going to do this, let’s do it right! Whether it is washing your car or making a big career move, planning and preparation are essential to execution. As attorneys, we serve as officers of the court and members of a profession that demands professionalism and ethical standards. Meaning, there are steps we must take to safeguard our own livelihood and those of our clients.
Whether it’s looking for a fresh start, a career transition, or you’re finally stepping into retirement, leaving a law firm demands your attention and planning to properly close one chapter and start the next. Yet, don’t be discouraged or overwhelmed. Keep looking ahead and know that working smarter now to wind-up your matters will bring comfort and security so you can move ahead in your new role (or relax into your retirement, as the case may be).
1. Read the Contract and Rules
Dust off that partnership agreement to first determine your obligations to your firm and partners, including any timing barriers that may impact the order of operations or timeline of your transition. Also, your ethical rules and opinions (e.g. ABA Formal Opinion No. 99-414) may give direct guidance as to what steps must be taken. The ARDC provides a great guide to your ethical requirements.
Consult with these materials from the start to determine what steps you need to take to formulate your game plan. How are you going to best protect your interests, your clients’ interests, and meet your obligations to your exiting firm, all while following the ethical rules and adhering to any contractual constraints?
2. Don’t Get Too Ahead of Yourself
If you’re opening a new shop after your departure, you’ll be doing all you can do to avoid too much lag time between jobs. Even if you’ve developed an income reserve to cushion the impact over the time, it can be stressful and risky to not have your new enterprise ready for launch. But don’t forget, you still have a fiduciary duty to your old firm too.
This fiduciary duty was examined by the Illinois Supreme Court in Dowd & Dowd, Ltd. v. Gleason, 693 N.E.2d 358, 181 Ill.2d 460, 230 Ill.Dec. 229 (Ill., 1998), and is worthy of review for departing lawyers. Lawyers who are preparing to leave a law firm face a dilemma, caught between the fiduciary obligations they owe the other members of their firm, on one hand, and the duty of being able to adequately represent clients who choose to follow them to their new place of employment, on the other hand. Id, 693 N.E.2d at 364.
In summary, Dowd concluded that “preliminary preparations” such as securing office space, utilities, and even applying for a new business line of credit with a bank were not in conflict to their fiduciary duties to the firm. However, any soliciting of clients from the departing firm is a clear violation of your fiduciary duty to your partners, even those clients you may have brought the firm and personally represented. Id, 693 N.E.2d at 366-67. The court extended such a breach to employees as well, stating that if “departing members usurped a corporate opportunity by hiring for the new firm persons who had been interviewed for positions at the [old firm, this] … could also support a claim for breach of fiduciary duty.” Id, 693 N.E.2d at 367.
3. Keeping Your Clients’ Interests First
At some point, the firm’s clients and the world will know of the organizational changes – so, how and when? When determining the answer to both questions, keep your clients’ interests ahead of all others. They are the sole gatekeepers to control who acts as their counsel. For example, you do not have the authority to merely deal out or barter client files of which stay and which go with you, as if they are bargaining chips.
If possible, the best practice may be to formulate a joint letter to your clients from the old firm and you, to be communicated immediately after your departure. This way you have made prompt notice to your clients and you have done so after you have officially departed from the firm to protect yourself from claims of solicitation of clients going forward.
Nevertheless, a joint letter assumes cooperation and compliance with the old firm upon your resignation, and that may not always be the case. So, while notice may be given before your resignation, extra care is warranted. The emphasis must remain on giving the clients their alternatives for future representation. See the ABA’s formal opinion for more details, including:
- 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);
- 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 currently is working;
- the departing lawyer must make clear that the client has the ultimate right to decide who will complete or continue the matters; and
- the departing lawyer must not disparage the lawyer’s former firm.
4. Notice to Others
Illinois Supreme Court Rule 756(c) requires you to notify the ARDC of any change of address within 30 days of such change. You may easily update your information on the ARDC website. Additionally, do not forget to notify the Clerk of the Illinois Supreme Court of the dissolution or formation of any professional service corporation, professional association, limited liability company or limited liability partnership, as permitted under Rule 721.
Consider, at the decision and direction of your clients, how you might be preceding or withdrawing from cases that have pending litigation, depositions, hearings, or other activity before courts, entities, or involve opposing counsel and other parties. Where appropriate, request and communicate all continuances or substitutions of counsel (as allowed in certain cases) and follow-up should court ordered confirmation be needed. See ILRPC 1.16-1.17.
5. Make a First Impression
Along with your required notice duties above, you’ll want to update the rest of the world with your new career transition including your bar associations, alumni associations, and other professional groups. Whether sending out an email blast to your contact list or updating your social media profiles, now is your chance to make a quality first impression with your peers, past clients, current clients, and prospective clients. Just as you have had a game plan from number one of this list, you would be wise to develop a marketing plan to launch your new profile in the right direction.
6. If You’re Going Solo, Get a Succession Plan
So, you just completed your transition, literally and figuratively hung out your shingle, and you’re excited for all that comes with launching your new enterprise. But wait, you aren’t finished yet. Your ethical obligations of diligence instruct sole practitioners to have a contingency plan in place. Comment  to ILRPC 1.3 Diligence states:
To prevent neglect of client matters in the event of a sole practitioner’s death or disability, the duty of diligence may require that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer’s death or disability, and determine whether there is a need for immediate protective action. See Illinois Supreme Court Rule 776, Appointment of Receiver in Certain Cases.
Illinois ARDC has resources to help guide you on how to setup a succession plan. Likewise, the Illinois State Bar Association has a great list of articles, resources, and sample documents for succession and transition planning.
Also, see Illinois ARDC’s The Basic Steps to Ethically Closing a Law Practice or always know you can contact them directly with questions on the ARDC Ethics Inquiry Hotline at either the ARDC Chicago office: 312/565-2600 or 800/826-8625 or Springfield office: 217/52-6838 or 800/252-8048.