BGD's James J. Bell Discusses "Three Things to Know When Leaving a Law firm"
BGD attorney James J. Bell recently shared three key things that attorneys and law firms should know when an attorney departs from a firm in his recurring Indiana Lawyer column. He includes advice for notifying clients of the change, proper attorney conduct regarding clients and the distribution of legal fees.
In his column, Bell states that transitions are expected increase in the next several years as the economic conditions improve and attorneys can move on to “greener pastures.” When an attorney leaves a law firm, he has the opportunity to bring clients with him. Clients are in a sense “free-agents” who have the right to choose a lawyer, and since attorneys under the Indiana Rules of Professional Conduct cannot enter “non-compete” agreements with their firms, clients are free to follow their attorney, stay with the current firm or choose an entirely different firm. Clients are required to be notified of attorney changes and their options in writing and should reply with their formal choice (in writing to avoid disputes.)
A problem that sometimes arises in relation to attorney conduct when departing a firm relates to previous firm’s other clients. Quite often, firm management will find that the lawyer will contact other clients which they have had no “prior professional relationship.” This is strictly prohibited under the Indiana Rules of Professional Conduct and the practice could be considered “akin to ‘ambulance chasing’.”
Finally, the complicated matter of billings can cause disagreements if an attorney departs while involved with an ongoing matter. If a client is billed hourly, there should be no dispute; however, if an attorney is involved in a contingent fee case, it can get murky. Citing Indiana Supreme Court Case Galanis v. Lyons & Truitt, Bell explains that the attorney “is entitled to recover the value of services rendered if there is a subsequent settlement or award.” This also applies to the firm’s services as well. Determining the “values of services rendered” is complex but at least the standard is clear.