The Legal Intelligencer Blog

Subpoena Issued to Penn State GC

By Amaris Elliott-Engel
Of the Legal Staff

Cynthia Baldwin, Penn State’s vice president and general counsel, has been subpoenaed to appear with a wide variety of documents before the federal grand jury investigating the university, former Penn State assistant football coach Jerry Sandusky and Sandusky’s former charity for at-risk youth, The Second Mile.

Sandusky has been charged in state court with more than 50 counts of sex abuse and related charges.

The scandal led to the ouster of Graham Spanier as university president, as well as head football coach Joe Paterno, Penn State’s most revered figure. Paterno died last month.

Baldwin has been subpoenaed to appear before the grand jury at 9 a.m. Wednesday, and has been instructed to bring records dating from January 1998 to the present involving the names and addresses of all university board members and payments by those board members to the university or to third parties on behalf of the university.

The subpoena also requires records related to Sandusky, The Second Mile, allegations made to the university against Sandusky of “misconduct and inappropriate relationships with minors,” and records about Penn State’s reporting requirements relating to allegations of misconduct of people employed or otherwise associated with Penn State. The subpoena also requires the hard drives of Sandusky, former Penn State vice president of business and finance Gary Schultz, former Penn State athletic director Tim Curley, and Spanier.

Both Schultz and Curley face charges in state court of failure to report sex abuse and perjury, stemming from statements they made to grand jurors last year.

The subpoena is dated from Feb. 2, but the school released a copy of the subpoena more recently. The subpoena was from U.S. Attorney Peter J. Smith of the Middle District of Pennsylvania and Assistant U.S. Attorneys Gordon Zubrod and Francis P. Sempa.

Appeals of Interlocutory Orders, Part 2: Interlocutory Appeals by Permission

By Mandi L. Scott
Special to the Legal

This is the second part in a series on appeals of interlocutory orders. Here is Part 1.

Sometimes a court or government unit entering an interlocutory (non-final) order is of the opinion that the order in question involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal may materially advance the ultimate termination of the matter. 42 Pa. C.S. §702(b) permits the court or government unit to state the same in its interlocutory order, thus giving a party the right to attempt to file an interlocutory appeal by permission pursuant to Pa. R.A.P. 312 and Chapter 13 of the Pennsylvania Rules of Appellate Procedure.

The most important thing to know about Chapter 13 is that, even if the trial court includes the “magic” language required by 42 Pa. C.S. §702(b), an immediate appeal from an interlocutory order is not permissible. Instead, the party seeking to file an appeal must file a Petition for Permission to Appeal with the prothonotary of the appropriate appellate court within 30 days after the entry of the interlocutory order containing the statement required by Section 702(b). See Pa. R.A.P. 1311.

One other note of caution to those filing a Petition for Permission to Appeal an interlocutory order, the filing of such a petition does not stay the proceedings before the lower court or other government unit, unless the lower court or other government unit, or the appellate court, orders a stay.

That statement, again, is: “[this] order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the matter[.]”

Rule 1311 further requires that any petition be served on all other parties to the matter and on the government unit or lower court issuing the interlocutory order so that the petition may be docketed of record before the lower tribunal.

As for the contents of a Petition for Permission to Appeal an interlocutory order, the petition must contain the following:

1. A jurisdictional statement.

2. The text of the interlocutory order in question.

3. A concise statement of the case.

4. The controlling question(s) of law presented to the appellate court for review and a concise statement of why a substantial ground exists for a difference of opinion on the question and why an immediate appeal may materially advance termination of the case.

The failure of a petitioner to present its position with accuracy, brevity and clarity is a sufficient reason for the appellate court to deny the petition.

Finally, if a Petition for Permission to Appeal is filed asking the appellate court to exercise its discretion and accept the subject order for review, but the order is actually a final order which was immediately appealable as of right, the appellate court may treat the petition as an appeal from a final order pursuant to Pa. R.A.P. 1316.

Mandi L. Scott is an associate with the Pittsburgh-based law firm of Goehring Rutter & Boehm, where she has been practicing since 2004. Currently, her practice focuses on appellate issues and municipal law. To contact her, e-mail mscott@grblaw.com.

Fresh Ink: Inside Today's Legal

Welcome to your Friday morning round-up of stories in today’s edition of The Legal Intelligencer. All of the links below will take you directly to today’s stories, or you can head straight over to The Legal’s homepage. (Some stories may require registration or a paid subscription.)

The top story today is the state Supreme Court ruling that uninsured drivers can sue insured drivers for economic damages. As reporter Zack Needles writes, the court ruled unanimously in favor of plaintiff Mary Corbin, an uninsured motorist who was injured in an accident and had sought to sue the other driver, who was insured, for economic damages. Justice Seamus P. McCaffery, writing for the majority, said that while the issue seemed to deal with two incongruous sections of the Motor Vehicle Financial Responsibility Law, when considered together “there is no ambiguity.”

Also above the fold on Page 1, reporter Gina Passarella writes that Cozen O’Connor has hired Joseph Dever, who most recently served as an assistant regional director of the enforcement division for the Securities and Exchange Commission in New York, as the new chairman of its securities litigation and SEC enforcement practice group.

In more Regional News on Page 3, reporter Amaris Elliott-Engel writes that Pennsylvania Chief Justice Ronald D. Castille asked Thursday that legislators find more funding for the state judiciary. He recommended an extension of a temporary fee surcharge to traffic citations in order to help cover a project $29.6 million shortfall under Gov. Tom Corbett’s proposed budget.

As always, our People in the News section is on Page 2, and the top stories from our sister publications across the country make up the Page 4 National News section.

In a Franchise Law column on Page 5, Craig R. Tractenberg writes that most franchise professionals have expressed a cautious optimism for the industry, despite economic pressures that abound.

In an Environmental Law column on Page 7, Katherine L. Vaccaro and Diana A. Silva write that uncertainty looms over the EPA’s cross-state air pollution rule.

If you have questions or comments about any of today's stories, or our coverage as a whole, we invite you to e-mail any of the reporters directly. We hope you'll enjoy today's Legal.

Do’s and Don’ts for Departing a Law Firm: Part 3

By Don P. Foster
Special to the Legal

Yesterday, we covered the checklist of things a lawyer should do when departing his or her law firm. Today, in Part 3 of this series, we’ll take a look at what both the lawyer and the law firm should avoid.

The “Don’t” Checklist

The departing lawyer should not:

1. Seek a client’s commitment of legal work to a new firm before notifying the old firm of the intent to leave.

2. Remove client files from the firm prior to notice to the firm. Note: the issue of copying electronically stored documents to a flash drive or other portable storage device has not been addressed by ethics committees or courts. Because no one’s interests are harmed and the client is protected in the event of a delay in the transfer of a file, there does not appear to be anything wrong with it.

3. Advise a client not to pay an existing bill or to pay the attorney directly.

4. Compete with the old firm prior to departure by comparing services or rates of the two firms.

5. Malign the quality or price of the legal services of the firm.

6. Solicit associates or other firm employees prior to actual departure to leave with him. Note, however, this non-solicitation rule should be subject to the same distinction drawn in Part 2 between the “what if” exploratory conversation with a client and active solicitation once the decision to leave has been made. Furthermore, there is nothing that prevents the withdrawing attorney from responding to inquiries from associates and staff after the announcement of his departure.

Practice Pointer: Once the decision to leave has been made and the firm notified, the firm and the departing attorney should identify active clients for which the departing lawyer is responsible or plays an important role in representation of those clients. They should then jointly prepare a letter, for the departing lawyer’s signature, informing them of:

a. The departing lawyer’s intended departure, the timing of the departure, the departing lawyer’s new association and willingness of both the old and new firm to continue the current representation of the client.

b. The client has the sole right to decide who will complete or continue the representation, whether the old firm, the departing lawyer or a new lawyer altogether.

The letter should also seek client direction regarding the transfer of files. As it is a joint letter, as a practical matter it will not contain disparaging comments about either party, nor will the letter urge the client to continue with one relationship or another. Nevertheless, the joint opinion expressly proscribes both. If the firm and the departing lawyer cannot agree on the language of a letter, then separate letters can be sent.

The old law firm should not:

1. Prevent the departing lawyer from honoring his ethical obligations to clients or attempt to thwart any ongoing relationship between that lawyer and departing clients.

2. Forbid a departing lawyer from announcing his departure, notifying clients or opposing counsel in a litigated matter.

3. Instruct firm personnel not to disclose the whereabouts of former lawyers to clients or other callers.

4. Withhold files of departing clients as leverage in disputes with departing lawyer over fees or other strictly lawyer-to-lawyer issues.

Conclusion

It is the unusual case when an attorney with a substantial practice, or the potential for such a practice, decides to leave a law firm, that the blueprint for a professional, noncombative, cooperative transfer of the attorney’s practice is followed. Rather, it is too often the case that acrimony, jealousy, greed and distrust cloud judgment and cause people to do things that result in litigation. No one wants that. Not only is it costly, it is emotionally taxing. It also is unseemly to the client. It is therefore wise for the departing attorney to retain experienced counsel to go over the do’s and don’ts of his jurisdiction, and to serve as an intermediary in discussions with the firm in case it does not take the news of the departure well.

Counsel can also review any applicable partnership or employment agreements in order to advise on the effect that the timing of a departure would have on the departing lawyer’s compensation from the old firm. This topic requires concentration on the law of fiduciaries and contracts and will be addressed in a separate article.

Don P. Foster is a principal at Offit Kurman, which he recently joined as a lateral from another Philadelphia firm. He has represented both attorneys and firms in matters related to departures, dissolutions and related compensation.

Business Valuations – Assessment of Risk

By Terry Silver
Special to the Legal

Business valuations that utilize the Income Approach judge, weigh and calculate the risk associated with the business being valued. Financial markets assess risk by the assignment of a rate of return. Low-risk investments such as U.S. Treasury bonds carry low interest rates to reflect the lower risk. Alternatively, high-risk investments reward the investor with higher returns.

In valuing a privately owned company, where public markets do not assess the risk, the assessment is determined by the valuation analyst. This assessment is one of the most significant and subjective aspects of business valuation.

The analyst must develop the discount rate, which can be thought of as a “cost of capital,” or the expected rate of return that the market requires to attract funds to a particular investment. This rate of return reflects both the time value of money and risk. The key question in the development of this discount rate is: What is an appropriate rate of return to expect if the future cash flows were purchased?

The market value of invested capital (MVIC) of a company is the total value of the company to all invested capital, not just equity stakeholders, but also debt holders. The MVIC includes the market value of all outstanding classes of stock, including long-term, interest-bearing debt. This is useful because it allows comparisons with other companies with varying capital structures.

When using the Income Approach to determine the MVIC, it is critical that the discount rate is relevant and appropriate to the economic income being discounted. In particular, the weighted average cost of capital (WACC) should be utilized when one is discounting cash flows to all capital providers. The result of this calculation gives rise to the MVIC. Said differently, it is the value of the entire investment to all stakeholders, both equity and long-term debt holders. Once the MVIC is determined, one would subtract the interest-bearing debt to arrive at the value of the company’s equity.

To determine the WACC, one needs to determine the company’s cost of equity and debt. Many analysts utilize either the Morningstar-Ibbotson Association Yearbook or the Duff & Phelps Risk Premium Report, and sometimes both. In our business valuations at Citrin Cooperman, we utilize both sources of data to assess risk. We seek to quantify market return, small stock risk and specific company risk (inclusive of macro-environmental and industry risk), using a build-up approach to arrive at the cost of equity. We then compare this result to a blending of historical equity risk indicators over a multi-year period from various business portfolios. If the multiple data sources yield comparable results, there is a higher degree of confidence in our research.

The cost of equity is converted into the WACC by weighting with the tax-impacted debt interest rate via an iterative process. The development of WACC is critical to the valuation conclusion. Care, knowledge and credible research all contribute to the WACC calculation, determined with specific company, industry and economic knowledge and information.

Terry Silver is a certified public accountant, certified valuation analyst and certified in financial forensics for Citrin Cooperman, an accounting, tax and business consulting firm in Philadelphia, where he is a partner with more than 33 years of experience as an accountant and auditor. He focuses his practice on business valuation and financial forensic services, expert testimony and matrimonial actions. He can be reached at tsilver@citrincooperman.com or 215-545-4800.

Fresh Ink: Inside Today's Legal

Welcome to your Thursday morning round-up of stories in today’s edition of The Legal Intelligencer. All of the links below will take you directly to today’s stories, or you can head straight over to The Legal’s homepage. (Some stories may require registration or a paid subscription.)

The top story this morning is a look at Reed Smith’s hike in revenue last year. As reporter Gina Passarella writes, the firm saw a 3.7 percent rise in revenue, despite a 3 percent dip in profits per equity partner, which still topped $1 million.

Also above the fold on Page 1, reporter Ben Present writes that the insurance company against which Penn State filed a lawsuit last week is trying to bring that suit to the First Judicial District. The Pennsylvania Manufacturers’ Association Insurance Co. sued the university last month seeking to limit its defense costs, and Penn State followed with a suit in Centre County last week alleging the company breached its contract with the school.

Below the fold on Page 1, reporter Zack Needles writes that Pittsburgh-based Sommer Law Group has sued its former legal administrator for using the firm’s debit card to make fraudulent transactions, as well as the bank that issued the card for not alerting the firm to the suspicious activity.

In more Regional News on Page 3, a New Jersey suit charging that the state is denying same-sex couples equal protection under the U.S. Constitution can proceed following a ruling by Mercer County, N.J., Assignment Judge Linda Feinberg on Tuesday.

As always, our People in the News section is on Page 2, and the top stories from our sister publications across the country make up the Page 4 National News section.

As it is Thursday, this week’s Young Lawyer column is on Page 5, as the YL Editorial Board writes about the value of mixing a little face time in with all the billable hours lawyers are so keen on piling up.

In a Commentary on Page 7, Walter M. Phillips Jr. and Doug Moak write that local help for witness intimidation might be on the way soon.

If you have questions or comments about any of today's stories, or our coverage as a whole, we invite you to e-mail any of the reporters directly. We hope you'll enjoy today's Legal.

Administrative Judge Raises Pay for Phila. Capital Cases on Interim Basis

By Amaris Elliott-Engel
Of the Legal Staff

The First Judicial District, according to a notice authored by Philadelphia Common Pleas Court Judge John W. Herron, the chair of the First Judicial District’s Administrative Governing Board, is raising the flat fees paid to private counsel on an interim basis in the wake of a fact-finder’s report that the pay for private lawyers handling death penalty cases is “grossly inadequate.”

As a result of a petition by defendants who face the death penalty, Philadelphia Common Pleas Court Senior Judge Benjamin Lerner was ordered by the state Supreme Court to examine if the guaranteed fee system was unconstitutional. Lerner concluded, in a report filed Tuesday, that the constitutionality would have to be decided on a case-by-case basis but that the fees paid to lawyers are so low that the number of lawyers willing to do the work is tiny and is resulting in a backlog in homicide cases. For example, lead capital defense attorneys are paid only $2,000 for pretrial work, but the fee is reduced to $1,333 if the case is resolved because of their clients taking a plea or the case is dismissed for any reason.

Until the Supreme Court acts, “private counsel appointed in capital cases shall be paid a flat fee of $10,000 (lead counsel) and $7,500 (penalty phase counsel), irrespective of whether the case is tried to verdict or otherwise disposed and resolved,” said Herron, administrative judge of the Common Pleas Court's trial division, in a notice released today.

“As Judge Lerner noted, the scheduling of these cases is hampered not by a lack of trial judges but rather by the lack of qualified counsel interested and available to take such assignments; presently only 12 in number,” Herron said. “Recognizing that these capital cases are a community nightmare involving the most horrific murders and the killing of police officers in the line of duty, the court takes this interim action in order to more expeditiously address the devastating consequences of these crimes to the victim’s family and the other parties involved.”

The petition that spurred Lerner’s report was filed by the Atlantic Center for Capital Representation, a nonprofit death penalty resource center serving Pennsylvania and Delaware.

Marc Bookman, executive director of the center, said in an interview today that, while he disagrees with Lerner’s conclusion that the guaranteed fee system is unconstitutional on a global basis, he is cautiously optimistic that Lerner’s report will be acted upon by the Supreme Court and capital representation will be improved in Philadelphia.

With Lerner’s recommendation that capital defense counsel be paid $90 an hour, “court-appointed lawyers aren’t coming out of this driving a Mercedes Benz. They’re coming out of this driving a Buick. But at least it’s not a Model T Ford,” Bookman said.

Amaris Elliott-Engel can be contacted at 215-557-2354 or aelliott-engel@alm.com. Follow her on Twitter @AmarisTLI.

Do’s and Don’ts for Departing a Law Firm: Part 2

By Don P. Foster
Special to the Legal

Yesterday, we introduced this three-part series about how to handle departing from a law firm. Today we’ll take a look at what you should do in these situations. Check back tomorrow for what you shouldn’t do in Part 3.

The “Do” Checklist

1. Inform the firm of your intent to depart.

The Joint Opinion of the Pennsylvania and Philadelphia Bar Associations imposes an ethical requirement to notify the firm of an intended departure, although nothing in the rules of professional responsibility requires such notice. The obligation arises out of recognition of the firm’s ethical obligations to the client, which exist separate and apart from the attorney’s individual obligations. The rationale is that the withdrawing partner is ethically bound to the firm and the client not to interfere with the former’s ability to honor its obligation to the latter.

The timing of such notice will depend upon the circumstances and is governed by a rule of reason. If there is a contract that covers the issue, it will control, within reason.

However, as a practical matter, the latest date by which the lawyer should provide notice to the firm is the date on which clients are notified of the lawyer’s intent to depart. An earlier joint opinion of the two Pennsylvania ethics committees had generally associated the timing of the notice to clients with that of notice to the old firm. The 2007 joint opinion affirmed that approach. Therefore, as a rule of ethics in Pennsylvania, the firm must be told no later than any client of an actual intent to depart.

2. Communicate the fact of departure to clients.

This is the easy part. Of course the departing attorney is going to notify clients of his or her plans to change firms. Also, it is the client’s decision, and only the client’s decision, as to whom is going to represent it. See Adler, Barish, Daniels, Levin & Creskoff v. Epstein. The question is not whether to notify the client, but when and what to say.

The joint opinion says not to notify clients before notifying the firm. But is that realistic in a world in which the decision to leave, and the new firm’s willingness to provide an opportunity to leave, is dependent upon the client’s decision whether to be represented by the old firm, the departing lawyer and the new firm, or a third firm?

As a practical matter, a long-standing client of the departing attorney, which he cultivated as a client and for which he is the responsible billing attorney, is going to migrate with the attorney. The firm is probably not going to care if the attorney discusses his plans with such a client before the firm gets notice. There is no reasonable expectation of an ongoing relationship with such a client.

Where the situation gets more dicey is, for example, when the departing attorney did not originate the client, but rather was assigned client responsibility by the firm and cultivated a relationship; or where a number of attorneys have a relationship with the client, who may even have been “sold” by the departing attorney and other members of the firm. Can an attorney who is contemplating departure get a head-start on the anticipated competition for such clients by notifying the client before notifying the firm?

The answer is that it depends. It depends upon the relationship between the departing attorney and the old firm, i.e., whether with an associate, who does not owe a fiduciary duty of a partner, or a partner who does. It depends upon whether the attorney has made the decision to leave irrespective of the client’s decision, and in fact is a “departing attorney,” or is merely contemplating the possibility of departure depending upon the commitment of certain clients to him in the event he were to move to a new firm.

And it depends upon what the attorney says. It is one thing to say: “I am contemplating a career change to another law firm; our relationship is important to me and will be to whatever firm I go to. As I talk to people, what can I say to them about business from you in the future?” It is an entirely different thing to say: “I am moving to XY&Z law firm because I’m not being treated right here. XY&Z is much better suited than [existing firm] to meet your needs, and their rates are lower. Can I rely on your business in the future?”

The first conversation is asking a client how it feels about the attorney and inquires conditionally about an ongoing relationship, all the while making it clear that it is the client’s choice. There is nothing in the ethics opinions that proscribes such exploratory conversations. The second statement is potentially actionable pre-withdrawal solicitation of a firm client, a breach of contract and a breach of fiduciary duty to the old firm.

Practice Pointer: There is nothing in the rules of ethics, or the law of fiduciaries or law of unfair competition, to prevent an attorney considering the possibility of changing firms to explore with clients the likelihood of ongoing business from them in the event of a lateral move. Care must be given to what is said and the attorney must avoid saying anything to convince the client that it would be better for the client if it referred legal work to the attorney rather than the old law firm. That is solicitation.

3. Try to be fair.

This is a variation of the ethical maxim that one should treat others as one would like others to treat oneself. However, this does not mean that the departing lawyer should only say nice things about the firm (which, presumably, he would want the firm to say about him) and urge clients to stay with the firm. Rather, this variation of the Golden Rule derives more from the Code of Hammurabi, which dealt with retribution for wrongs committed — as in, “an eye for an eye, a tooth for a tooth.” Self-interest drives this rule, because if one is not “fair” and solicits a client, steals a file or hides a fee, even if one believes the other side has done, or will do, the same, then the attorney has not only violated this rule, but most likely fiduciary and contractual duties to firm, partners and possibly clients.

Don P. Foster is a principal at Offit Kurman, which he recently joined as a lateral from another Philadelphia firm. He has represented both attorneys and firms in matters related to departures, dissolutions and related compensation.

Fresh Ink: Inside Today's Legal

Welcome to your Wednesday morning round-up of stories in today’s edition of The Legal Intelligencer. All of the links below will take you directly to today’s stories, or you can head straight over to The Legal’s homepage. (Some stories may require registration or a paid subscription.)

Today’s top story is Philadelphia Common Pleas Court Judge Sandra Mazer Moss rejecting Pennsylvania as a forum for a Texas plaintiff’s asbestos case. As reporter Amaris Elliott-Engel writes, the plaintiffs argued that Pennsylvania was an appropriate forum because the defendants they are suing “willingly marketed” asbestos-related products in Pennsylvania, among other reasons. But Moss wrote that all of the alleged exposure to asbestos occurred in Texas, making the Lone Star state a better forum.

Also above the fold on Page 1, Amaris Elliott-Engel writes that Senior Judge Benjamin Lerner said in a report issued yesterday that the pay given to private defense lawyers for defendants facing death row is “grossly inadequate.” He also said that low pay has led to a shortage of lawyers willing to take the cases.

Below the fold on Page 1, reporter Zack Needles writes that a Delaware County trial judge has ruled that a school’s ban on employees with certain prior criminal convictions does not apply to current employees. Two Penn-Delco School District employees were fired following a recent amendment to the state’s Public School Code over prior convictions disclosed at the time they were hired.

In more Regional News on Page 3, reporter Gina Passarella writes that real estate finance is on the rise again, after the practice area plummeted during the recession.

As always, our People in the News section is on Page 2, and the top stories from our sister publications across the country make up the Page 4 National News section, including the U.S. Supreme Court revisiting the divisive issue of affirmative action in higher education as part of Fisher v. University of Texas at Austin.

As it is Wednesday, this week’s GC Mid-Atlantic column is on Page 5, as Catherine Dunn of Legal affiliate Corporate Counsel writes that pro bono work is being inhabited more and more by in-house legal departments in recent years. Esther Lardent, president and CEO of the Pro Bono Institute, said, “It’s like a quiet revolution.”

In a Legal Marketing column on Page 7, Stacy West Clark writes a blueprint for achieving results with your firm’s marketing committee. Her tips include making an agenda for meetings and establishing authority within the committee.

If you have questions or comments about any of today's stories, or our coverage as a whole, we invite you to e-mail any of the reporters directly. We hope you'll enjoy today's Legal.

 

Do’s and Don’ts for Departing a Law Firm: Part 1

By Don P. Foster
Special to the Legal

Lawyers are changing law firms at an ever-increasing rate. No news there. The reasons are manifold and include personality conflicts, culture, career advancement, boredom or even following a spouse or significant other to another city or state. But face it, we all know that there is one over-arching reason why an attorney changes firms … money. The increasing commoditization of the legal profession, or at least of the attorneys that comprise the profession, has created an environment in which the attorney’s value – and, hence, his or her compensation – is measured by the number of dollars the attorney controls, and has created a market place where attorneys are for sale to the highest bidder.

If the goal is more money and that goal can only be realized if the successor firm enjoys the financial benefit of the attorney’s portable book of business, there are powerful incentives for the attorney to make sure the book is as thick as he or she represents it to be to any potential new firm – and that it is, in fact, portable. There are equally powerful incentives on the firm and individual attorneys who might inherit the business to retain as many of the clients serviced by the departing lawyer as possible. This is the ugly tension created by lateral moves of attorneys from one firm to another and implicates legal ethics, the law of fiduciaries (including partnership law), and common law principles of contract and unfair competition. See the ABA Commission on Ethics and Professional Responsibility, which says: “The departing lawyer must also consider legal obligations other than ethics rules that apply to [his/her] conduct when changing firms, as well as … fiduciary duties owed the former firm. The law of agency, partnership, property, contracts, and unfair competition impose obligations that are not addressed directly by the Model Rules …”

The next two posts in this series, which will be published over the next two days, are a check-list of “do’s” and “don’ts” when an attorney moves to another law firm. The list is prepared from the vantage point of the departing lawyer, but largely applies to the law firm – for example, the proscription against non-disparagement. The list is a by-product of Joint Formal Opinion 2007-300, “Ethical Obligations When A Lawyer Changes Firms,” case law and experience. It is not exhaustive because the rules can change somewhat from state to state depending upon what a partnership or employment agreement provides and how the courts interpret those agreements.

Check back on Wednesday for Part 2.

Don P. Foster is a principal at Offit Kurman, which he recently joined as a lateral from another Philadelphia firm. He has represented both attorneys and firms in matters related to departures, dissolutions and related compensation.