Transfer of cases in law practice sale need not be 'immediate or abrupt,' ABA ethics opinion says
A lawyer who sells a law practice is required to stop practicing law under the ABA Model Rules of Professional Conduct. But that doesn’t mean the lawyer is barred from assisting in the transition, according to an ethics opinion.
ABA Model Rule 1.17, adopted in 1990, allows the sale of a law practice or law practice area as long as the selling lawyer or law firm “ceases to engage in the private practice of law, or in the area of practice” that was sold, in the relevant jurisdiction. The rule imposed requirements for the sale, such as the need for client notice, but it was silent on when a seller “ceases to engage” in law practice for the purpose of the rule.
In Formal Opinion 468 (PDF), the ABA Standing Committee on Ethics and Professional Responsibility says a selling lawyer or law firm should have a reasonable period of time after the sale closes to assist in the transition of active client matters.
It’s clear from commentary to the Model Rule that selling lawyers may not accept new matters in the relevant practice or practice area, and the ban is immediate, the ethics opinion says. However, given the purpose of the rule and its provisions, it seems reasonable to conclude that the transfer of active client matters “need not be immediate or abrupt,” the ethics opinion says.
The time period in which selling lawyers may assist in the transition will necessarily depend on the circumstances, the opinion says.
The opinion also advises that time spent implementing the sale may not be billed to clients. Any compensation to the selling lawyer or law firm for help in the transition should be negotiated between the seller and buyer, the opinion says.
