When Lawyers Get Divorced: Ethically Breaking up a Law Firm

When a law firm breaks up or a lawyer leaves to start a new practice, there are always clients, contingency arrangements, and hourly cases to split up. It is important to know what ethical steps a lawyer or law firm should take when parting ways. If the firm splits up, who has the rights to the name, brand, clients, or even client files? How can both parties ethically allocate unfinished business, accounts receivable, or unsettled contingency prearrangements? An ethical and professional split is inevitably beneficial for the future of the law firm and the lawyer. On this episode of The Digital Edge, Sharon D. Nelson and Jim Calloway ask legal ethics expert Tom Spahn about the proper way to professionally deal with the various situations that arise when a law firm splits up. He explains that lawyers and their firms should remain civil and open to negotiation before the lawyer has left. Firms have run into trouble while trying to penalize leaving employees on an individual basis. He discusses the ethically proper way to deal with unfinished business doctrines, document retention programs, and fiduciary duties to clients. Due to technology, there are new issues to consider including digital files or property ownership of domain names. Overall, however, Spahn emphasizes that every partner has a continuing duty to make sure every client is adequately served. Tom Spahn, often known as "Mr. Ethics" in Virginia, practices as a commercial litigator in the Tysons Corner office of McGuireWoods. He has served on the ABA Standing Committee on Ethics and Professionalism, and has spoken over 1,200 times on ethics and other topics in the United States and abroad. Special thanks to our sponsor, ServeNow.