Solo and Small Firm Ethics Traps

There is nothing quite like striking out on your own and forming a new firm. But in their enthusiasm to do so, some lawyers forget to pay attention to details. I know this, because someof  them later become my clients. What follows is a discussion of some problems that I have seen - over and over again.1."I'm outta here. Who's going with me?"Most small firms and solo practitioners star somewhere else - often at another law firm.Their departure carries with it a host of ethical issues. These include:

• Job negotiations. Can a lawyer discuss prospective employment with a law firm to which the lawyer is adverse in a pending matter?
• Notice to clients. What are the soon-to-be former firm's clients told about the lawyer's departure, and who decides what wil be said?
• Access to fies. Does the departing lawyer have access to client files? To the lawyer's own work product?
• Solicitation of clients. Can the departing lawyer solicit clients of the former firm, and if  so, when?
• Solicitation of  prior firm's employees. Can the departing lawyer solicit the prior firm's employees, and if so, when?
• Fees for unfinished business. When a lawyer leaves a firm and takes a client, is the departing lawyer entitled to the fees earned from the client in the future?
• New firm conflicts. Can the departed lawyer appear adversely to his former firm in a matter on which he was previously involved?

Each of these issues must be addressed by a lawyer who contemplates leaving an existing firm. The following resources wil be very helpful if the reader is in that situation. ABA FormalEthics Opinion 99-4 i 4: Ethical Obligations When A Lawyer Changes Firms (9/8/99); Lateral Hires: A Primer To Minimizing Imputed Disqualification; Nevada Lawyer, March 2013;Unfinished Business, Nevada Lawyer, March 2013.2. "But Where Will I Go?"The first stop for many departing lawyers is shared space, with other lawyers, other law firms, or non-lawyers. This is permissible, but presents a host of issues, including:

• RPC 7.5. Professional Independence. You cannot imply that everyone in the office is a member of one firm. Each lawyer's/firm's identity must be maintained and represented separately.
• RPC 1.6. Confidentiality. The use of shared space, equipment and employees cannot be permitted to breach client confidentiality.
• RPC 1.5. Sharing Fees. If lawyers sharing space decide to work together or refer clients to one another, care must be taken to comply with the rules governing the division of fees among lawyers.
• RPC 5.5. Unauthorized Practice. Lawyers who share space with non-lawyers must take care that the arrangement does not give the appearance of a multi-disciplinary business, or worse, enable the non-lawyers to hold themselves out as being affiliated with lawyers.

3. "How Do I Get Their Attention?"The Nevada Supreme Court recently amended the Nevada attorney advertising rules (RPC 7.2, 7.2A and 7.3). ADKT No. 445, filed 11/13/12. These amendments significantlychanged the rules for advertising fees, the requirements for disclaimers, statements of past results, and targeted mail to potential clients. If you are going to advertise, you have to knowthese rules. A good place to start the pursuit of knowledge is the article by Glenn Machado, Assistant Bar Counsel, in the Nevada Lawyer, January 2013.4. "How Far is Too Far?"Lawyer web sites and blogs can be deemed to be advertising. A lawyer who blogs (boasts) about past successes is engaging in commercial speech and is subject to the Bar's advertising rules. Hunter v. Virginia State Bar, Case No. 121472 (Va. S. Ct. 2/28/13). Be  careful what you put on Facebook.5. "Sign 'Em Up."Once attorney and client have agreed upon the engagement, a retainer agreement should be executed by the parties. This is mandatory in contingent fee cases (RPC 1.5(c)), but should be done in every case. The retainer agreement does many things. It-· Identifies the client. Do you represent the shareholders, the officers, the directors, the corporation?

• Limits the scope of the engagement. You were engaged to sue and recover damages for personal injuries. Does that include resolving liens of  health  care providers? Giving tax advice as to the recovery?
• Multiple clients. Are you representing several clients in the same matter? Do they need to consent to or waive potential or existing conflicts? What if a conflict arises in the future - for example, where multiple clients have different settlement demands?
• Non-payment of  bils. What happens if  the client does not fulfill the client's obligations - for example, fails to pay the bill? Can you withdraw? How longdoes the bil have to go unpaid? Who gets the fie? What forum will decide the fee dispute?

A good retainer agreement will cover all these points, and more.6. "Let 'Em Go."When the engagement is concluded, it is important to memorialize the conclusion in a disengagement letter. Nothing fancy; just a letter stating that the matter has concluded, that theattorney-client relationship has ended and that the attorney has no further obligations to the client regarding advice on the matter. This does two things:

• It precludes the client from making future claims that the lawyer failed to giveadvice on something which occurred after the conclusion of  the matter.
• It makes the departing client a "former client" (RPC 1.9) for conflct purposes,instead of a "current client" (RPC 1.7).

In sum, starting a new law firm is exhilarating. I know the feeling. Keeping these issues in mind wil make your solo/small-firm life easier.Mr. Kennedy labored for many years in the vineyards of a large-firm. He now tends the vines on a much smaller estate (Bailey.:.Kennedy) where he advises many solo and small-firmpractitioners. This article is adapted from the CLE presentation made by the author and David Merril to the CCBA on May 8, 2013. If the reader wants copies of any of the materialsreferenced in this article, please e-mail Mr.  Kennedy  at  dkennedy(fbaileykennedy.com.