An agreement that barred a lawyer from soliciting clients within a geographic area was unenforceable after the lawyer left the firm under the rules governing the professional conduct of attorneys. An agreement prohibiting a former associate attorney from soliciting clients of the firm after his resignation may be enforceable in…
A charging lien protects the interest of a lawyer in fee that is to be paid from a contingent-fee recovery. A statutory lien may be enforced through a petition filed in an underlying action. The amount of a charging lien, and the lawyer’s compensation, is determined using principles of quantum…
Although a former executive was bound by a restrictive covenant, the fact that his duties after joining a competitor were directed to a different market made the scope of the restrictions unreasonable. A restrictive covenant that is not narrowly tailored to protecting specific interests of the former employer at stake…
Physicians are subject to reasonable restrictions on post-employment activities that will limit their competition with a previous employer. A restrictive covenant that prohibits competition must protect a legitimate interest, impose not undue hardship on the former employee and not injury the public interest. Restrictive covenants must be narrowly tailored so…
A case in which a restrictive covenant was enforced against an accountant who happened to be beneficiary under her deceased former employer’s will is among recent business divorce cases worthy of note. Restrictive Covenant Given in Purchase Agreement Survives Death A covenant not to compete given in connection with the…
Restrictive covenants preventing competition by former employers are enforceable only to the extent that they are reasonable under New Jersey law. Lawyers and psychologists are exceptions to the general rule, however, because both are subject to disciplinary rules that prohibit restrictions against competition. Courts have recognized that the personal relationship…
Attorney separation agreements may require that a lawyer give reasonable notice to his firm before resignation, reducing conflict with departing lawyers. Lawyers may agree in advance how they will handle such issues as billing, transfer of file responsibilities and return of equipment. Joint notice to clients by the law firm…
Law firms may not limit the ability of lawyers to resign, solicit clients and compete with the firm, but they may contract for a reasonable notice period necessary for the orderly transfer of client matters. Both the departing lawyer and the law firm share an ethical obligation to assure the…
Law firms should recognize that lawyer resignations and the loss of clients are inevitable in the modern law practice due to prohibitions on agreements that restrict competition. Law firms can protect the interests of clients and the firm by adopting best practices that govern lawyer resignations. Law firms should recognize…
Courts determine whether an individual has an equity interest in a law firm partnership by examining the financial investment and risk taken by the claimed owner, such as payment of capital and guarantees of obligations. The rise of the non-equity partner in law firms management has changed the status associated…