Lawyers move firms a lot in Illinois. Changing law firms is a natural part of any lawyer’s career.
A good lawyer will likely have relationships with the clients they interact with. When that lawyer moves to a new firm, the clients may want to move with the lawyer that they know and trust regardless of what firm employes the lawyer.
Lawyers Cannot Enter Into Noncompete Agreements
Illinois lawyers cannot enter into an agreement that they will not compete with each other either now or in the future.
“A lawyer shall not participate in offering or making:(a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement” Ill. Sup. Ct. R. 5.6
“Rule 5.6 is designed to afford clients greater freedom in choosing counsel and to protect lawyers from onerous conditions that would unduly limit their mobility.” Hoffman v. Levstik, 860 NE 2d 551 – Ill: Appellate Court, 1st Dist., 5th Div. 2006
“[R]estrictive covenants in attorney employment contracts are void as a matter of public policy.” Mohanty v. St. John Heart Clinic, SC, 866 NE 2d 85 – Ill: Supreme Court 2006
“Noncompetition clauses are especially discouraged in the legal profession where the lawyer is not selling or promoting a commodity but rather his or her personal service.” Hoff v. Mayer, Brown and Platt, 772 NE 2d 263 – Ill: Appellate Court, 1st Dist., 2nd Div. 2002
This does not mean that a lawyer can just work against his or her current employer. Soliciting clients for a future employer while working for a current employer may be tortious interference of business.
Soliciting Legal Clients As Tortious Interference In Illinois
“[T]o prevail on a claim for tortious interference with a prospective economic advantage, a plaintiff must prove: (1) his reasonable expectation of entering into a valid business relationship; (2) the defendant’s knowledge of the plaintiff’s expectancy, (3) purposeful interference by the defendant that prevents the plaintiff’s legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from such interference.'” Dowd & Dowd, Ltd. v. Gleason, 181 Ill.2d 460, 484, 230 Ill.Dec. 229, 693 N.E.2d 358 (1998)
A departing lawyer owes his or her current firm a duty of loyalty…to an extent.
As a general matter, all employees owe fiduciary duties of loyalty to their employers not to (1) actively exploit their positions within the corporation for their own personal benefits, or (2) hinder the ability of the corporation to conduct the business for which it was developed. While lawyers are not necessarily bound by the same fiduciary constraints that apply to nonlawyer officers and directors, lawyers do owe fiduciary duties to their employers….While a departing attorney may undertake arrangements to set up a competing firm, their fiduciary duties impose limitations on his or her conduct.” Burke v. THE LAKIN LAW FIRM, Dist. Court, SD Illinois 2008
The world marches on. Departing lawyers can make arrangements for the next stage of their career while they’re still working for their current employer…within reason.
“[S]ome preliminary preparations by lawyers who are leaving a firm must be allowed, and… it is appropriate for lawyers in these circumstances to make arrangements, prior to their departure, to obtain new office space, equipment, and other materials necessary for the practice of law…That this may be a delicate venture, requiring confidentiality, is simple common sense.” Dowd & Dowd, Ltd. v. Gleason, 181 Ill.2d 460, 484, 230 Ill.Dec. 229, 693 N.E.2d 358 (1998)
A departing lawyer can tell clients that they are leaving their current firm. Departing lawyers can even remind client’s that they have the choice to hire the departing lawyer at a new firm. Such communication should not occur secretly, though.
“[D]eparting partners have been permitted to inform firm clients with whom they have a prior professional relationship about their impending withdrawal and new practice, and to remind the client of its freedom to retain counsel of its choice….[such conversations would ii]deally” only take place after the partners informed their firm of their intention to leave.” Dowd & Dowd, Ltd. v. Gleason, 693 NE 2d 358 – Ill: Supreme Court 1998
Almost any solicitation done by a lawyer after they have left their former firm is allowed…within reason. Only the most egregious post-departure actions will be considered tortious.
“[P]re-departure solicitation may be relevant to the question of whether actions taken by a departing attorney constitute impropriety or “purposeful interference,” especially in the context of a breach of fiduciary duty. But to find that pre-departure solicitation is a prerequisite for a tortious interference claim in this context would mean that even the most extreme post-departure conduct by an attorney in soliciting his former employer’s clients could not constitute “purposeful interference.” Burke v. THE LAKIN LAW FIRM, Dist. Court, SD Illinois 2008
The issue is duplicity and common sense. When the solicitation is both secretive and during the current employment…it is probably tortious.
“[S]ecretly attempting to lure firm clients to the new association, lying to partners about plans to leave, and abandoning the firm on short notice and taking clients and files would not be consistent with a partner’s fiduciary duties” Dowd and Dowd, Ltd. v. Gleason, 816 NE 2d 754 – Ill: Appellate Court, 1st Dist., 1st Div. 2004
While most of the cases regarding a lawyer’s tortious interference with a perspective economic advantage are about partners in a law firm breaching their loyalty to each other, the same principle applies to associates (who are at-will-employees).
“A relationship created by a contract that is terminable at will is sufficient to support a claim of interference with prospective economic advantage because such a relationship will presumptively continue in effect so long as the parties are satisfied.” FILM AND TAPE WORKS v. Junetwenty Films, 856 NE 2d 612 – Ill: Appellate Court, 1st Dist., 6th Div. 2006
In the end, there is no black and white rule about a lawyer taking cases with them to a new firm. As every lawyer knows…it depends (mostly on transparency).
“At one end of the spectrum, where an attorney is dissatisfied with the existing association, taking steps to locate alternative space and affiliations would not violate a partner’s fiduciary duties. That this may be a delicate venture, requiring confidentiality, is simple common sense and well illustrated by the eruption caused by defendants’ announced resignation in the present case. As a matter of ethics, departing partners have been permitted to inform clients with whom they have a prior professional relationship about their impending withdrawal and new practice, and to remind the client of its freedom to retain counsel of its choice [citations]. Ideally, such approaches would take place only after notice to the firm of the partner’s plans to leave.
At the other end of the spectrum, secretly attempting to lure firm clients (even those the partner has brought into the firm and personally represented) to the new association, lying to clients about their rights with respect to the choice of counsel, lying to partners about plans to leave, and abandoning the firm on short notice (taking clients and files) would not be consistent with a partner’s fiduciary duties” Graubard Mollen v. Moskovitz, 653 NE 2d 1179 – NY: Court of Appeals 1995 (citations omitted)
If you are a family lawyer in Illinois looking for a change, let me know. I’m always hiring. I don’t need or want your current cases…I have got plenty of cases to keep you busy.