The agreement should also address liabilities owed to third parties such as leases or lines of credit. If the partner is personally obligated concerning these liabilities he, with the firm's assistance, should seek to be removed from these liabilities. If this cannot be accomplished the separation agreement, in addition to the indemnification provision set forth above, should include a schedule of any known personal liabilities and a representation that the firm will assist the partner in trying to be released from these obligations.
What Can Be Said
Separation agreements should also set forth the nature and duration of so-called bounce back messages on the departing partner's email and voicemail. These messages are important and provide necessary information to clients and third parties that the partner is no longer a partner and to honor the client's choice of counsel and should provide the partner's new contact information or at a minimum direct the caller or email sender to someone at the firm who can direct the call as appropriate.1
Separation agreements sometimes include non-disparagement and confidentiality provisions. Depending on the relationship of the firm and departing partner, a non-disparagement agreement may be called for. In some circumstances it is not needed and in others the parties would prefer to speak freely about one another and such a provision is not included. In addition, at a large firm it is very difficult to monitor and enforce such a provision among all the partners nonetheless diluting the efficacy of such a provision. Confidentiality provisions are more common and typically require the reasons for the departure and the economic terms of the departure to not be disclosed.
Separation agreements often contain provisions by which the departing partner will assist her former firm in collecting fees from clients of the former partner. Sometimes this cooperation includes a direct monetary component by which the former partner is paid a percentage of the fees collected. In other situations there is no direct correlation. Regardless, separation agreements often contain such provisions requiring reasonable cooperation in collection of client receivables including the finalizing of bills.
It is not uncommon for separation agreements to not have releases. While it is desirable for the parties to move on with the protection of a release, it is often difficult to obtain a release concerning the departure of a partner from a firm. Often the parties, believing that their relationship is complex, cannot come to terms concerning a broad general release. In the situations where such an agreement is reached, a broad general release should be included which carves out, among other things, the separation agreement, any pension plans, and insurance coverage.
"Get it in writing." When partners leave a firm, lawyers and firms should take their own advice and set out their terms of the departure in a comprehensive agreement that spells out the parties' rights, obligations, and expectations for the future. These agreements, like most, should eliminate further controversies and permit both the departing lawyer and the former firm to move on productively.
Arthur J. Ciampi is the coauthor of the treatise 'Law Firm Partnership Agreements' and is the managing member of Ciampi LLC. Maria Ciampi, of counsel to the firm, assisted in the preparation of this article.
1. The New York State Bar Association website contains important information for attorneys departing from their firms. Among other things, the website includes procedures and content to be placed on a departing attorney's email account to ensure a client's choice of counsel and the maintenance of client confidences. See, e.g., http://www.nysba.org/Content/NavigationMenu/LawPracticeManagementResources/ DepartingaLawFirm/EmailCommunicationsforDepartingAttorneys.pdf.