Can a solo lawyer who is retiring sell the law practice to another lawyer, and what does D.C. require?

Plain-English summary

Opinion 294 (approved December 1999) addressed a solo practitioner planning to retire who wished to sell the practice, essentially its goodwill, to another lawyer. Because the D.C. Rules did not address the sale of a law practice and had not adopted ABA Model Rule 1.17, the committee analyzed the transaction by breaking it into its component conduct: terminating client representations, communicating with clients, transferring responsibility and files, and receiving payment.

On termination, the committee held that a retiring lawyer may withdraw only consistent with Rule 1.16: without material adverse effect on clients (Rule 1.16(b)) and without prejudice (Rule 1.16(d)). Merely making the buyer available does not satisfy that duty, because clients are not obliged to accept the buyer; the retiring lawyer may have to finish matters, find acceptable substitute counsel, or give enough notice for clients to retain their own. On communications, the committee identified a Rule 1.7(b)(4) conflict: when the retiring lawyer asks clients to move their work to the buyer, the lawyer is promoting personal financial interests, so the request requires disclosure meeting Rule 1.7(c), including the retirement, the financial arrangement with the buyer, the buyer's qualifications, and the client's right to choose other counsel. The buyer may also contact the clients if the communication is not false or misleading under Rule 7.1.

On confidentiality, the committee held that because selling the practice serves the lawyer's interests, Rule 1.6 bars disclosing client confidences and secrets to a prospective buyer without informed consent; the lawyer may share non-confidential practice information (number of clients, aggregate billings, general case descriptions), but specific client and adverse-party identities and substantive case information often are protected and require consent. On payment, a price unrelated to fees earned from transferred clients raised no concern, but if payment is tied to those fees it is fee-sharing under Rule 1.5(e), permitted only if its conditions (proportional division or joint responsibility, client consent, reasonable total fee) are met; and the buyer's fees to transferred clients must be reasonable under Rule 1.5(a) and not increased by reason of the sale.

Currency note

The D.C. Bar flags this opinion with the note: "See how Opinion 294 has been substantively affected by the amendments to the D.C. Rules of Professional Conduct that became effective on February 1, 2007." This opinion was issued in 1999, before the District of Columbia's adoption of those 2007 revisions, and it expressly noted that D.C. had not then adopted a rule on the sale of a law practice; the rules it relied on were among those later revised. Treat this page as historical context, not current guidance, and verify against the current D.C. Rules of Professional Conduct before relying on any specific rule described here.

Common questions

Q: Could a retiring solo lawyer sell the practice at all?

A: The opinion concluded yes. Even without Model Rule 1.17, selling a practice on retirement was not unethical if the underlying conduct (termination, client consent, confidentiality, and fees) complied with the D.C. Rules.

Q: Did clients have to agree to the new lawyer?

A: The opinion concluded yes. Clients are not obliged to accept the buyer, so the retiring lawyer had to obtain client agreement to the new representation and, failing that, satisfy Rule 1.16(d) another way, such as finishing the matter or giving notice to find new counsel.

Q: What could the retiring lawyer tell a prospective buyer about clients?

A: The opinion concluded that non-confidential information (number of clients, aggregate billings, general case types) could be shared, but client and adverse-party identities and substantive case information are generally protected by Rule 1.6 and require informed client consent.

Q: Could the sale price be tied to fees from the transferred clients?

A: The opinion concluded that a price tied to fees earned from transferred clients is fee-sharing under Rule 1.5(e), permissible only if its conditions are met; a lump sum or installments unrelated to those fees raised no fee-sharing concern.

Background and rules framework

The opinion interpreted D.C. Rule 1.16 (declining or terminating representation), Rule 1.7(b)(4) and (c) (the retiring lawyer's personal-interest conflict and informed consent), Rule 1.6 (confidentiality of client identities and case information during a sale), and Rule 1.5(a) and (e) (reasonable fees and division of fees between lawyers not in the same firm). It discussed, but noted D.C. had not adopted, ABA Model Rule 1.17 on the sale of a law practice, and surveyed other jurisdictions' treatment of practice sales.

Citations and references

Rules of Professional Conduct:

• D.C. RPC 1.16 / Model Rule 1.16 (terminating representation)
• D.C. RPC 1.7 / Model Rule 1.7 (personal-interest conflict; informed consent)
• D.C. RPC 1.6 / Model Rule 1.6 (confidentiality)
• D.C. RPC 1.5 / Model Rule 1.5 (reasonable fees; fee division); ABA Model Rule 1.17 (sale of a law practice; not adopted in D.C. at the time)

Cases:

• Raphael v. Shapiro, 587 N.Y.S.2d 68 (N.Y. Sup. Ct. 1992) (practice sale void under the Code)
• Dugan v. Dugan, 457 A.2d 1 (N.J. 1983) (goodwill value of a sole practice)

Other opinions cited:

• D.C. Ethics Opinions 124 (1983), 246 (Rev. 1994), 249 (1994), 277 (1997), 286 (1998)
• Washington Op. 192 (1996); Kansas Op. 93-14 (1993); Arizona Op. 92-8 (1992)

See also

• ABA Formal Op. 468: Selling a Law Practice
• DC Ethics Op. 372: Law Firm Dissolution Duties
• ABA Formal Op. 06-444: Retirement Restrictive Covenants

Source

• Landing page: https://www.dcbar.org/for-lawyers/legal-ethics/ethics-opinions-210-present/ethics-opinion-294