Can a law firm's agreement with a retiring partner include a non-compete clause without violating the rule against restrictions on the right to practice?

Short answer The committee was of the opinion that if the agreement is an actual retirement agreement, and not an agreement in settlement of a controversy, the non-compete provision does not violate RPC 5.6; it could not opine on the validity of the liquidated damages provision.

Bar

WSBA

Issued

1990

Apply this to your situation

This page answers the general question as of 1990. Ask about yours and see what the current Washington Rules of Professional Conduct say for your facts, with citations.

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 Not binding precedent.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) is the authoritative source for any reliance.

Plain-English summary

The committee reviewed a contract provision regarding a retiring partner that was submitted with the inquiry. It was of the opinion that if this is an actual retirement agreement, and not an agreement in settlement of a controversy, there is no violation of RPC 5.6. The committee could render no opinion on the validity of the liquidated damages provision.

Currency note

This opinion was issued in 1990, before the Washington State Bar Association's adoption of the 2006 revisions to the Washington 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 Treat this page as historical context, not current guidance.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: Does a non-compete with a retiring partner violate the rule against practice restrictions?

A: Under this 1990 opinion, not if it is part of a genuine retirement agreement rather than a settlement of a controversy; the committee found no violation of RPC 5.6 in that case.

Q: What turned on whether it was a true retirement agreement?

A: RPC 5.6 generally bars restrictions on a lawyer's right to practice, but the committee treated a bona fide retirement-benefits agreement as outside that prohibition; a non-compete tied to settling a dispute would be a different matter.

Q: Did the committee approve the liquidated damages clause?

A: No. The committee was of the opinion that it could render no opinion on the validity of the liquidated damages provision.

Background and rules framework

At the time of this opinion, Washington's RPC 5.6 restricted agreements that limit a lawyer's right to practice, with an exception for restrictions concerning retirement benefits, the subject the Model Rules place in Rule 5.6. The committee keyed its conclusion to whether the agreement was an actual retirement agreement, and left the liquidated damages clause as a legal question it would not resolve.

Citations and references

Rules of Professional Conduct:

ABA Model Rule 5.6 (restrictions on right to practice)
Washington RPC 5.6

Source

Landing page: https://ao.wsba.org/print.aspx?ID=464

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

The Committee reviewed the contract provision regarding the retiring partner as submitted with your inquiry. The Committee was of the opinion that if this is an actual retirement agreement, and not an agreement in settlement of a controversy, there is no violation of RPC 5.6. However, the Committee could render no opinion on the validity of the liquidated damages provision.

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