Your Exit Strategy
Departing Your Law Firm Partnership: First Steps
So the time has come for you to depart your law firm. Maybe your book of business has outgrown the firm. Maybe the firm has charted a course that doesn’t include you. Maybe you just need a change. Whatever the reason, departing a law firm partnership can be a surprisingly challenging — and potentially perilous — exercise if you are not prepared.
The good news is that you can transition your practice to a new firm, with your clients and your sanity intact, if you follow a few straightforward steps.
1. Remember That Clients Come First
If there is one overarching truth in partner departures, it is that you should relentlessly put your clients’ interests first — ahead of your own, ahead of your soon-to-be-former firm, and ahead of your new firm. This means that you need to start thinking about each transition issue with your clients’ interests in mind.
Presumably, you have already concluded the move will benefit your clients in some way. (If not, why are you doing it?) But at each stage of the transition, ask yourself what choice would be best for your clients, what would most protect their interests, what would most benefit them. Everything you do in the transition of your practice will be viewed from the perspective of clients, and this will also explain any instances where you cannot comply with contractual requirements.
2. Know Your Rights and Obligations
This sounds elementary, but a critical first step in any partner departure is to know your rights from, and your obligations to, your former firm. The starting point is your firm’s partnership agreement. Have you read yours lately? Do you even know where to find it?
The partnership agreement is the source of your contractual rights from your former firm. But it’s not the final word on partner departure issues. You are also bound by the ethics rules and opinions that govern all lawyers. It is not unusual for some provisions of your partnership agreement to conflict with your practical and ethical obligations to clients. If this happens, you’ll need a plan to balance your obligations to the firm with your ethical obligations to clients.
3. Get Your Own House in Order
There are some real-world practical considerations you must address if you want to have a successful transition.
- Will your team move with you? It will be an unpleasant surprise, to say the least, to find out on the day you announce your departure that your team is not coming too. And there are complicated rules for how and when you can discuss departures with your team.
- Are all of your matter files up to date and organized? For any client, those that you think will move with you, and those that will stay, it will be critical to have the information that you need on day one. But it is more important to determine whether, how and when you can take such information from your old firm.
Think through the practical realities that could arise, and make a detailed plan on how to resolve these issues in advance.
4. Get a Lawyer
Last, but not least, is the advice you would expect from lawyers: Hire a lawyer to help you navigate the rules and requirements for partner departures. Many of the rules are not entirely clear, and getting your own counsel can help you comply with applicable rules, protect your rights, and ensure that the transition process works for both your clients and you. And, if a dispute should arise with your former firm on any issue, you will be ready to address it.
Daniel O’Rielly, a partner at O’Rielly & Roche LLP in Los Angeles, counsels California attorneys and law firms on strategic transitions: partner departure law, attorney ethics counsel, partnership agreements and firm structure, law firm compensation systems, law firm succession planning, and law firm dissolutions. He also handles partnership disputes, in litigation and arbitration. He blogs at California Attorney Ethics Counsel.
Dena Roche is a partner at O’Rielly & Roche LLP in San Francisco. She provides counsel to California attorneys and law firms related to partner departures and other transitions, general partnership matters, and attorney ethics and law firm practice management. She blogs at California Partner Departure Law.
Subscribe to Attorney at Work
Get really good ideas every day: Subscribe to the Daily Dispatch and Weekly Wrap (it’s free). Follow us on Twitter @attnyatwork.
Illustration ©iStockPhoto.comSponsored Links