Indiana Supreme Court imposes reprimand on lawyer for making agreement limiting ability of associate to notify clients of departure

Hello everyone and welcome to this Ethics Alert blog which will discuss the recent Indiana Supreme Court disciplinary opinion which imposed a public reprimand on a lawyer for, inter alia, making an associate sign and trying to enforce a separation agreement that limited the ability of associates to notify clients of their departure. The opinion is In the Matter of Karl N. Truman, No. 10S00-1401-DI-55 (Indiana Sup. Ct. 4/29/14) and the disciplinary opinion is here:

According to the opinion, the lawyer hired an associate to work for his law firm in October 2006. As a condition of employment, the associate signed a Confidentiality/Non-Disclosure/Separation Agreement which stated that if the associate left the law firm, only the law firm could notify clients that the associate was leaving, prohibited the associate from soliciting and notifying clients that he was leaving, and prohibited the associate from soliciting and contacting any clients after he left. The Separation Agreement also included provisions for the division of fees if the associate left the firm which were structured to create a strong financial disincentive in order to prevent the associate from continuing to represent clients that he had represented while employed by the law firm.

The associate informed the lawyer that he was leaving the firm in October 2012. At the time that he advised the lawyer of his departure, the associate had substantial responsibility regarding over 12 clients. The lawyer insisted on enforcing the terms of the Separation Agreement and sent notices to the those clients announcing the associate’s departure; however, not all of the client notices advised the clients that they could choose to be represented by the associate. The notices also did not provide clients with the associate’s contact information. The Separation Agreement provided that the lawyer would provide the associate’s clients with his contact information only if they requested it. The lawyer did provide the contact information to any clients who requested it.

Notwithstanding the restrictions in the Separation Agreement, the associate sent out notices to the clients which advised that the client could choose to be represented by the lawyer or the associate and included the associate’s contact information. The lawyer then filed a lawsuit against the associate seeking to enforce the Separation Agreement and a settlement was reached through mediation. The Indiana Bar Disciplinary Commission began investigating the lawyer. According to the opinion, immediately after the Commission began its investigation, the lawyer discontinued the use of the Separation Agreement.
The opinion found that the lawyer violated Indiana Professional Conduct Rule 5.6(a) by making an employment agreement that restricted the rights of a lawyer to practice after termination of the employment relationship and the Court imposed a public reprimand.

Bottom line: This Indiana lawyer tried to limit his associate’s ability to practice/keep clients after he left the law firm. Such a limitation is prohibited in most states, including Indiana and Florida (and Ohio, to which the opinion makes reference). Florida Bar Rule 4-5.6(a) states that “a lawyer shall not participate in offering or making: (a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the rights of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement.

Let’s be careful out there.

Disclaimer: this Ethics Alert blog is not an advertisement and does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire
Law Office of Joseph A. Corsmeier, P.A.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670

About jcorsmeier

Joseph A. Corsmeier is an “AV” rated attorney practicing in Clearwater, Florida. He concentrates his practice primarily in the areas of defense of attorney disciplinary matters before The Florida Bar, attorney admission matters before the Florida Board of Bar Examiners, and professional license and disciplinary matters before the Boards of the State of Florida. He provides expert analysis and opinion on conflict of interest and other attorney disqualification and legal malpractice issues and he testified as an expert in the Florida courts. He served as an Assistant State Attorney in the Sixth Judicial Circuit from 1986 to 1990 where he prosecuted felonies exclusively from June 1987, and as Bar Counsel for The Florida Bar’s Department of Lawyer Regulation from 1990 to 1998. He also practices in the areas of estate planning and Medicaid qualification, workers’ compensation, and labor law. Mr. Corsmeier is the author of numerous articles for various bar publications, has spoken at numerous local and statewide seminars on various topics, including ethics and professionalism, and was an instructor of legal ethics for paralegals at Rollins College until the Tampa campus closed. He received his undergraduate degree from Florida State University and his J.D. from Mercer University. He is admitted to practice in all Florida Courts, the Supreme Court of the United States, the United States Court of Appeals for the Eleventh Circuit, and the Middle District of Florida. He is a member of The Florida Bar, American Bar Association, the Association of Professional Responsibility Lawyers, and the Clearwater and St. Petersburg Bar Associations.
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