Law Firms

9th Circuit judges say little of their thinking at hearing on unfinished law firm business clawbacks

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A federal appeals court offered few hints at a Monday hearing about the direction in which members may be leaning concerning the right of a failed law firm, if any, to “claw back” profits from unfinished business taken by a former partner to a new law firm.

A U.S. District judge ruled in 2014 that the Heller Ehrman estate could not claim profits from work that went with former partners to their new law firms, and it was not clear on Monday that the San Francisco-based 9th U.S. Circuit Court of Appeals disagreed with this result, (sub. req.) reports.

“The central principle … is that law firms are entitled to the work that they do, no more and no less,” said attorney Shay Dvoretzky, a Jones Day lawyer who represents Orrick, Herrington & Sutcliffe, Jones Day, Foley & Lardner and Davis Wright Tremaine

A bankruptcy judge had originally ruled that the four firms must pay the Heller estate but was reversed by the district court.

Related coverage:

ABA Journal: “Lawyers from dissolved firms may now keep clients, courts say” “Disbanded Heller firm isn’t entitled to profits from cases taken to new firms, ABA brief says”

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