Can a lawyer sell a law practice including its goodwill, and are restrictive covenants allowed as part of the sale?

Plain-English summary

The committee was of the unanimous opinion that there is no per se prohibition against selling a law practice, including its "goodwill." It conditioned that conclusion on the seller being mindful of clients' rights: to have their confidences protected, to be informed of the sale transaction, and to be informed of their right to select a lawyer other than the purchaser. The seller must also comply with RPC 7.2(c).

The committee was also of the unanimous opinion that restrictive covenants are permitted as part of the sale of a law practice, but said the propriety of any particular restriction is a legal question beyond the committee's authority. The official record carries an editor's note referring to Formal Opinion 192.

Currency note

This opinion was issued in 1993, before the Washington State Bar Association's adoption of the 2006 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 Treat this page as historical context, not current guidance.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: Can a lawyer sell a law practice, including its goodwill?

A: The committee said there is no per se prohibition, so long as client confidences are protected, clients are told of the sale and of their right to choose a different lawyer, and the seller complies with RPC 7.2(c).

Q: Are restrictive covenants allowed in the sale?

A: The committee said restrictive covenants are permitted as part of the sale, but the propriety of any particular restriction is a legal question beyond the committee's authority.

Q: What client protections did the committee emphasize?

A: Protecting client confidences, informing clients of the sale transaction, and informing them of their right to select a lawyer other than the purchaser.

Background and rules framework

The opinion applied RPC 7.2(c) (corresponding to ABA Model Rule 7.2), which bars giving anything of value for a recommendation, to the transfer of a practice and its goodwill. The committee's conditions tracked client-protection concerns (confidentiality and informed choice of counsel) rather than the dedicated sale-of-practice rule, and it left the enforceability of specific restrictive covenants as a legal question outside its charge.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 7.2 (advertising; payment for recommendations); Washington RPC 7.2(c)

Other opinions cited:

• WSBA Formal Opinion 192 (referenced in the official record's editor's note)

See also

• WA Ethics Op. 1518: Donation Bundled With a Legal Product

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=605

Original opinion text

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

Advisory Opinion: 1524
Year Issued: 1993
RPC(s): RPC 7.2(c)
Subject: Sale of law practice

The Committee was of the unanimous opinion that there is no per se prohibition against selling a law practice including "goodwill" but that you should be mindful of your clients' rights to have their confidences protected, to be informed of the sale transaction, to be informed of their right to select a lawyer other than the purchaser and you must comply with RPC 7.2(c). The Committee was also of the unanimous opinion that restrictive covenants are permitted as part of the sale of a law practice, but that the issue of the propriety of any particular restriction is a legal question beyond the Committee's authority.

[Editor's Note: See Formal Opinion 192]