After selling a law practice, can the selling lawyer stay involved to transition active client matters?
ABA Formal Opinion 468: Facilitating the Sale of a Law Practice
Short answer: The opinion concludes that a lawyer or firm selling a law practice (or an area of practice) under Rule 1.17 must cease practicing in that area or jurisdiction but may still assist the buyer in the orderly transition of active client matters for a reasonable period after closing, and neither side may bill clients for time spent only on that transition.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the American Bar Association's Model Rules of Professional Conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
The opinion explains that until 1990, "lawyers were unable to sell any part of a law practice except for the physical assets such as furniture, office equipment, and books," a prohibition that rested on the absence of recognized "good will," fee-sharing concerns, the ban on paying for client recommendations, and protection of confidential information. Model Rule 1.17, adopted in 1990, rejected that prohibition and permits sales under detailed conditions, including that the seller "ceases to engage" in the private practice of law (or the sold area) in the relevant jurisdiction, with conforming amendments to Rules 5.4(a), 7.2(b), 1.6, and 5.6.
Because neither the black letter nor the comments define the timing of when the seller must cease to engage, the opinion addresses whether the seller may remain involved to transition active matters. It concludes the transition "need not be immediate or abrupt": "the selling lawyer or law firm may assist the buyer or buyers in the orderly transition of active client matters for a reasonable period after the closing of the sale." This reading aligns with Comment [12] (anticipating continued involvement where tribunal approval of a substitution is needed) and with Rule 1.16(d)'s duty to protect client interests on termination, and it parallels how firm lawyers may help transition pending matters when they retire or withdraw. The opinion declines to set a fixed time limit, requiring only that the seller stop accepting new matters and limit activity to what is reasonably necessary for an orderly transition. Throughout, it cautions that "clients are not commodities that can be purchased and sold at will."
On fees, the opinion holds that "the fees charged clients shall not be increased by reason of the sale" and that "the sale may not be financed by increases in fees charged clients of the practice." Because transition work arises only by reason of the sale, "time spent implementing the sale may not be billed to clients." Any compensation to the seller for transition time must instead be negotiated between buyer and seller as part of the sale consideration.
In practice
Under this opinion, a lawyer selling a practice does not have to abandon clients abruptly; the seller may help the buyer transition active matters for a reasonable period while declining all new matters in the sold area. The opinion holds there is no fixed time limit because the reasonable period depends on the circumstances and tribunal rules, and that clients may not be billed for transition-only work because that would impermissibly increase the fee by reason of the sale. Compensation for the seller's transition time is a matter for the sale agreement, not the client's bill.
Common questions
Q: After I sell my practice, can I keep helping with active cases?
A: Per the opinion, yes; the seller may assist the buyer in an orderly transition of active client matters for a reasonable period after closing.
Q: Can I take new matters in the sold area after the closing?
A: No. The opinion concludes the seller must stop accepting any new matters in the relevant area effective upon closing.
Q: Is there a deadline by which the transition must be done?
A: The opinion declines to set one, because the reasonable period depends on the circumstances and applicable tribunal rules.
Q: Can clients be charged for the time we spend transitioning their matters?
A: No. The opinion holds billing for transition-only work would impermissibly increase the fee by reason of the sale; the seller's compensation should be part of the sale consideration.
Background and rules framework
The opinion interprets Model Rule 1.17 (sale of a law practice), including its requirement that the seller cease to engage in practice and its bar on increasing fees by reason of the sale. It applies Model Rule 1.16(d) (protecting client interests on termination) and references Model Rule 5.4(a) (fee-sharing with nonlawyers), Model Rule 7.2(b) (paying for a practice), and Model Rule 5.6 (restrictions on the right to practice).
Citations and references
Rules of Professional Conduct:
- ABA Model Rule 1.17 (sale of a law practice), including 1.17(d)
- ABA Model Rule 1.16(d) (termination duties)
- ABA Model Rules 5.4(a), 7.2(b), 5.6
Other opinions cited:
- ABA Formal Op. 266 (1945): no salable good will in a law practice
- ABA Formal Op. 93-379 (1993): charging clients only for legal services performed
Cases:
- O'Hara v. Ahlgren, Blumenfield & Kempster, 537 N.E.2d 730 (Ill. 1989)
See also
- ABA Formal Op. 471: Surrendering Papers and Property to a Former Client
- ABA Formal Op. 505: Fees Paid in Advance
- ABA Formal Op. 487: Fee Division With a Client's Prior Counsel
Source
- Landing page: ABA Formal Ethics Opinions index
- Original PDF: aba-formal-opinion-468.pdf