So you’ve come to an agreement on the terms. Congratulations. Now comes the important stage of accepting, which often ties together with giving notice, but not always. This focuses on what to do before accepting.
Here are some important considerations to understand before you accept your offer. Why is accepting an offer so important?
- Because a number of obligations and duties become triggered at the moment you accept an offer. At that moment in time, you are deemed to be riding two horses at once, which carries a host of issues.
Your obligations and duties are controlled by a mixture of contract law (your current partnership/shareholder agreement), fiduciary duties to your current firm based on your position of ownership, and general ethical requirements under your state Bar association.
This is a continually evolving landscape (for example, The American Bar Association’s Standing Committee on Ethics and Professional Responsibility released Formal Opinion 489 on December 4, 2019, which provides more detail on obligations to giving notice when changing firms and other related issues about the departing attorneys’ rights).
Below are two important things you must keep in mind before accepting and putting pen to paper. (There are other things to keep in mind, which will be discussed in other articles, but these are the big two.)
Review Your Current Partnership Agreement
If you haven’t already done so, no more waiting. You must review your current firm’s partnership/shareholder agreement. Note: many firms have different terms for non-equity and equity partners.
Almost all partnership/shareholder agreements specifically address your duties and obligations. Some of the terms outlined in many partnership agreements are:
- Notice. This actually falls into two categories: (1) When and/or how you must you give notice. Note: most, but not all, firms outline this, but some firms have provisions that ask partners to alert their partnership once they intend to leave, even if they have not accepted – this is a large and complex issue for another post. (2) How long you must stay at the firm after providing notice (e.g. 14, 30, or 60 days).
- Obligations around soliciting clients
- Obligations around soliciting employees (which is often non-partners)
- Length of time before you are released from the partnership
- Length and manner of return of capital
- How to handle work-in-progress, transfer of files, etc.
- Dispute resolution process
Again, each of these are their own separate topic but you want to be aware of what the agreement states. With that said, what the agreement says and what partners actually do in the real world are not always aligned. The amount of revenue you threaten to take is the largest factor determining how closely the firm will expect you to follow protocols. For some partners, every additional week at the current firm can result in significant revenue, in which case things can get more contentious.
Don't Speak to Employees
I have mentioned this before but it’s worth repeating.
The general norm is you can talk to other partners about your intention of leaving (before giving notice), but no employees (i.e., non-partners). Speaking to employees can be interpreted as soliciting in violation of a number of duties and obligations. With that said, do partners often hint to employees that they intend to leave as a way to gauge their reactions? Yes, even though this carries risk, it does happen. But to minimize the risk of an ugly departure and even liability, do not utter a word to any employees at this time.
If you would like to learn more about the ethical issues involved in a move, please see this comprehensive interview with Tina Solis from Nixon Peabody.