Can a law firm's employment agreement split contingent fees with a departing lawyer and restrict notifying clients of the departure?

Plain-English summary

Opinion 221 (adopted October 15, 1991) addressed a firm's employment agreement. Paragraph 5 divided contingent fees between the firm and a lawyer who departed and took a firm client, on a sliding scale based on how long the case had been with the firm before the lawyer left and how long it was with the lawyer before the fee was realized (for example, 75% to the firm in one configuration, falling to 55% in another). Paragraph 3 had the firm send a standardized letter to the departing lawyer's clients within three days of departure, giving each client the option to stay with the firm or go with the lawyer, while the lawyer agreed not to contact the client or discuss the departure until the firm received the client's response.

The committee concluded the fee provisions did not violate the Rules, distinguishing agreements it had rejected, such as Opinion 65's 40%-of-future-billings clause and Opinion 194, because those imposed economic disincentives on future practice, whereas this agreement sought compensation for work already performed and addressed contingent personal-injury cases in which the firm may incur significant early costs. The committee said it could neither approve nor disapprove the specific percentages: if they represented a generally fair allocation based on the firm's historical experience there was no Rule 5.6(a) violation, but if the firm's share was excessive it would effectively restrict the departing lawyer's right to practice; whether the percentages were fair was a factual determination the committee could not make.

On the client-notice provision, the committee reached a different conclusion. It had allowed agreements limiting a departing lawyer's direct solicitation so long as the right to mail announcements was preserved (Opinions 77 and 97). Here, though, the firm controlled the content and timing of the notice, required the client to respond to the firm, and barred the lawyer from discussing the departure until then, including from answering client-initiated inquiries, and the firm's letter did not even tell clients how to reach the departing lawyer. The committee concluded that the firm's letter was an insufficient substitute for the lawyer's right to send announcements under Rule 7.1, and that prohibiting truthful responses to client-initiated questions violated Rule 5.6(a), as in Opinion 181, and ran contrary to Rule 1.4 and the client's right to choose counsel.

Currency note

This opinion was issued in 1991, before the District of Columbia's adoption of the 2007 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a firm split a departing lawyer's contingent fees by how long each had the case?

A: Yes. The committee concluded such a time-based percentage division was permissible because it compensated the firm for work already performed rather than restricting the lawyer's right to practice.

Q: Could the firm dictate the percentages?

A: Within limits. The committee declined to approve the specific percentages, concluding that a generally fair allocation based on historical experience was permissible, but that an excessive firm share would unlawfully restrict the lawyer's practice under Rule 5.6(a).

Q: Could the firm stop the departing lawyer from announcing the move to clients?

A: No. The committee concluded the firm could not substitute its own controlled letter for the departing lawyer's right to send announcements notifying clients of the departure.

Q: Could the firm bar the lawyer from discussing the departure with clients?

A: Only in part. The committee concluded the firm could limit lawyer-initiated solicitation, but could not prohibit the lawyer from giving truthful responses when a client initiated the contact.

Background and rules framework

The opinion interpreted D.C. Rules 5.6(a), 7.1, and 1.4. Rule 5.6(a), the successor to DR 2-108(A), bars a partnership or employment agreement that restricts a lawyer's right to practice after the relationship ends; the committee distinguished compensation for work already performed from economic disincentives on future practice. Rule 7.1 governs communications about a lawyer's services, including a departing lawyer's right to send announcements, and Rule 1.4 governs communication with the client. The committee noted that Rule 1.8(d) permits a lawyer to advance the costs of litigation.

Citations and references

Rules of Professional Conduct:

• D.C. RPC 5.6(a) / Model Rule 5.6 (restrictions on a lawyer's right to practice)
• D.C. RPC 7.1 / Model Rule 7.1 (communications concerning a lawyer's services)
• D.C. RPC 1.4 / Model Rule 1.4 (communication)

Cases:

• Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 482 Pa. 416, 393 A.2d 1175 (1978), upholding an injunction against direct contact with a former firm's clients while permitting announcements

Other opinions cited:

• D.C. Opinion 65: a 40%-of-future-billings clause was an impermissible restriction on practice
• D.C. Opinion 97: a firm may limit direct solicitation if the right to send announcements is preserved
• D.C. Opinion 181: an agreement barring responses to client-initiated inquiries is impermissible

See also

• DC Ethics Op. 241: Financial Penalty on a Departing Lawyer Who Competes
• DC Ethics Op. 273: Lawyers Moving From One Private Law Firm to Another
• DC Ethics Op. 255: Use of a Former-Firm Lawyer on a Contract Basis

Source

• Landing page: https://www.dcbar.org/for-lawyers/legal-ethics/ethics-opinions-210-present/ethics-opinion-221