EMPLOYMENT CONTRACTS MUST NOT CREATE FINANCIAL DISINCENTIVES
Often times law firm employment contracts will set forth the amount of the fee the departing attorney is entitled to should current clients go with a departing attorney when she leaves. The amount can never be contingent upon whether or not she informed her clients that she is leaving. She has an ethical obligation to do so. There is much case law regarding this matter. The case law comes from many different jurisdictions.
Generally speaking those agreements which are made at the time of the departure and which entitle the departing attorney to less than 50% of the overall fee, regardless of the model work done on the file after she leaves, are questionable. This is not to say that law firms do not have an interest in protecting their efforts to originally obtain the files, but those calculations must be fair. Generally speaking once the 50% barrier is reached many courts have began to question whether or not there is a financial disincentive to the attorney to continue to represent those clients who wish to go with her.
In our firm we have dealt with these matters in a successful fashion. If you are either an employer or an attorney who has departed a law firm please contact us with any questions you may have. We would also be happy to represent you in this area. Although contracts can never make a fee contingent upon hiding the fact that you’re leaving, there are ways to fairly protect your interests.