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WISBAR 1963

Can a retiring lawyer sell the goodwill of his practice to a younger lawyer, and does a client get his files back?

Short answer: The opinion concluded a lawyer may not sell or otherwise dispose of the goodwill of his practice, though he may sell office furniture, equipment, and library; a client has an absolute right to withdraw all of his files and records.

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This page answers the general question as of 1963. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.

Currency note: this opinion is from 1963
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page as a PDF) is the authoritative source for any reliance.
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Plain-English summary

Informal Opinion 1/63 answered an inquiry about a lawyer who wanted to retire and sell his furniture, equipment, files, and records to a younger lawyer, telling clients he had "sold his business." When a client demanded his files, the retiring lawyer refused, saying he had sold the files and records to the younger lawyer.

The opinion relied on ABA Opinion 266, calling its conclusions the only possible ones under the Canons. A lawyer cannot sell any goodwill of his business; he is entitled to be paid for the fair value of services performed up to retirement or death, and he owns his library, furniture, fixtures, file cases, and any lease renewal privilege, which another lawyer may properly purchase. Quoting NYCLA Opinion 109, the opinion stated that "Clients are not merchandise," and that an attempt to barter in clients is inconsistent with the profession's status. Canon 37 makes preserving client confidences a duty that outlasts the employment, so a lawyer's files contain confidential information that neither he nor his heirs may disclose without the client's express permission.

A retiring lawyer may properly arrange with another competent lawyer to protect clients' immediate interests in an emergency, but the client always retains the option to substitute an attorney of his own choice, and the papers must be turned over promptly to whomever the client designates. The opinion also pointed to the attorney's oath in Wisconsin Statutes 256.29. It concluded that no lawyer may sell or dispose of the goodwill of his business, and a client has an absolute right to withdraw all of his records and papers, certainly everything of a confidential nature (noting DR 3-102(A)).

Currency note

This opinion was issued in 1963, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update). It applied the former Canons of Professional Ethics (notably Canon 37 on confidences) and ABA Opinion 266. The flat prohibition on selling a law practice has since been changed by rule: Wisconsin and the Model Rules now permit the sale of a law practice under defined conditions in SCR 20:1.17 / Model Rule 1.17. The duties to return client files and preserve confidences now appear in SCR 20:1.16 / Model Rule 1.16 and SCR 20:1.6 / Model Rule 1.6. 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 retiring lawyer sell the goodwill of his practice in 1963?

A: No. The opinion concluded that no lawyer has any right to sell or in any manner dispose of the goodwill of his business; he could only be paid the fair value of services performed.

Q: What could a retiring lawyer sell to a younger lawyer?

A: His library, furniture, fixtures, file cases, and any lease renewal privilege, which another lawyer may properly purchase.

Q: Did the client have a right to his files?

A: Yes. The opinion concluded a client has an absolute right to withdraw all of his records and papers, certainly everything of a confidential nature.

Q: Could a retiring lawyer hand his clients off to a successor?

A: He could arrange with another competent lawyer to protect clients' immediate interests in an emergency, but the client always retained the option to substitute an attorney of his own choice, with the papers turned over promptly.

Background and rules framework

The opinion rested on the former Canons of Professional Ethics (Canon 37 on the lasting duty to preserve client confidences), the attorney's oath in Wisconsin Statutes 256.29, ABA Opinion 266, and NYCLA Opinion 109. The current counterparts are SCR 20:1.17 / Model Rule 1.17 (sale of a law practice, which now permits such a sale under conditions), SCR 20:1.16 / Model Rule 1.16 (duties on termination, including surrendering papers and property to which the client is entitled), and SCR 20:1.6 / Model Rule 1.6 (confidentiality).

Citations and references

Rules of Professional Conduct:

  • Model Rule 1.17 / SCR 20:1.17 (sale of a law practice)
  • Model Rule 1.16 / SCR 20:1.16 (declining or terminating representation; client files); former Canon 37, DR 3-102(A)
  • Model Rule 1.6 / SCR 20:1.6 (confidentiality of information)

Statutes:

  • Wisconsin Statutes 256.29 (attorney's oath, quoted in the opinion)

Other opinions cited:

  • ABA Opinion 266 (sale of a law practice and goodwill)
  • NYCLA Opinion 109 (Oct. 6, 1943) ("Clients are not merchandise")

See also

Source

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