As reported in a recent New Hampshire Bar News article (Aug. 18, 2000, p.1), a nationwide legal workforce study suggests that more than half of associates practicing in American law firms plan to change jobs within the next two years. As a law firm administrator, I find this very disturbing news. You only have to read "Lawyers on the Move" in Bar News to realize there is significant movement at all levels right here in New Hampshire. (The reasons for the frequent transition of attorneys is a great topic for another day.)

Firms of all sizes have to face the attrition factor, so it's important that they are prepared to deal with it. The old saying "hope for the best but prepare for the worst" is very appropriate in dealing with this problem. Through a well-though-out partnership agreement (or employment contract), any law firm can address the possible departure of a partner or associate.

Through my years of experience, I have found that the most important issue in a partnership agreement is money. I can't stress enough how important it is that the partnership agreement deal with the financial matters of an attorney's departure. With that in mind, it is essential the agreement cover the following:

1. What does the firm owe the withdrawing partner for equity? (It's important to be very specific and not tied to the current profit and loss.)
2. Payment schedule.
3. Agree what the firm will owe the withdrawing partner for his/her inventory of contingency matters, accounts receivable and work-in-process. Determine whether the withdrawing partner is responsible for unfunded firm liabilities.
4. If the firm's tax structure reflects a conduit pass to the withdrawing partner, address the timing and tax consequence and potential impact of future IRS audits.
5. Address the limitation or right of the withdrawing partner regarding access to client files, firm software, disclosure of proprietary information, copying of firm documents, removal of firm property, inducing other firm employees to leave, and the right of the firm to exclusive use of the firm name.

If these areas are properly addressed in the partnership agreement, the departure will be less stressful for all involved.

There are several other issues that need to be addressed when an attorney departs a firm. One of the most important: the impact on clients. To ensure the attorney's pending cases are properly handled during the transition and the clients' rights always protected, an inventory analysis of all the attorney's cases should be performed. In this analysis, the firm and departing attorney should review each file for action dates; check statutes; review paralegal assignments; identify issues involved; bill work-in-process; and address accounts receivable (resolve client disputes).

The next step, and the most vital, is to formally notify the client of the change in writing and request instructions on disposition of files. If the client decides to stay with the firm, it is very important to transfer the case as soon as possible and have the new attorney contact the client. Nothing is more frustrating to a client than to have his case in limbo. If, however, the client decides to stay with the departing attorney, the firm should insist upon a discharge letter from the client and file a withdrawal notice with the court. Notification and instructions should then be given to billing, accounting, the records room and the conflicts database relative to that client.

It is very important to notify the client before the attorney's withdrawal is made public - as a matter of common courtesy. It is understandably very annoying for a client to hear elsewhere that her attorney is no longer with the firm she hired.

Make sure the announcement of the departing attorney is made in an appropriate manner. Many do this through Bar News. It is a professional courtesy to inform the legal community of the move.

There are also a number of administrative matters to address when an attorney departs a firm. Among them:

1. Make sure there is an agreement on how departing case files will be physically removed from the firm. Do not allow files to leave the firm until the client has given approval.
2. Stop or transfer subscriptions.
3. Cancel online services and collect password/ID cards.
4. Identify and act upon changes needed in signage, firm letterhead, Web site, e-mail address, marketing material, etc.
5. Notify Martindale-Hubbell, the NHBA (aoneill@nhbar.org), the state directory and other professional services.
6. Notify the mailroom and receptionist of mail and phone transfer procedures.
7. Collect and inventory all keys, swipe cards, passwords, credit cards and unused business cards.
8. Oversee the removal of personal effects from the office.
9. Notify professional liability insurance carrier and inform departing attorney of any continuing coverage (or lack thereof).
10. Advise the attorney concerning termination of benefits programs and issue COBRA notification, as appropriate.
11. Terminate computer access.
12. Cancel or transfer cell phone contracts, as appropriate.

Addressing all of the related issues - financial, administrative and otherwise - will help alleviate the effects of an attorney's departure from the firm. Proper preparation for the departure will make the transition much easier for the departing attorney, the firm - and most importantly, for the client.

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