March 1, 2004 Regular News DPC continues work on firm breakup rule DPC continues work on firm breakup rule A proposed rule seeking to set guidelines for contacting clients when a lawyer leaves a law firm or a law firm breaks up will receive further study from the Disciplinary Procedure Committee.The Board of Governors did not vote on the measure at its January 30 meeting after the Young Lawyer Division raised objections. Bar President Miles McGrane asked DPC Chair Don Horn to consider the YLD concerns rather than have the entire board get involved in amendments.Horn said the proposal arose from a grievance case that resulted from a lawyer taking some client files when he left the firm. The Bar realized it didn’t have any rules that regulated the breakup of firms or the departure of firm members.So the DPC took up the matter and drafted a proposed Rule 4-5.8, Procedures for Lawyers Leaving Law Firms and Dissolution of Law Firms. (See official notice in the January 1 Bar News. )“We generally describe what the Bar would expect from lawyers who decide to leave a law firm or when the law firm is dissolving, in part to make sure the clients are not harmed and to provide the lawyers with some guidance on what they ought to do,” Horn said. “It pretty much requires lawyers to try to reach some agreement on how things are going to be done. . . and requires them to inform the clients of their options and inform them of any financial consequences of any of the options.”YLD President Mark Romance said the division generally supports the concept of the rule, but has some problems with the way it was drafted.“It prohibits a lawyer who is leaving a law firm from unilaterally contacting a client without trying to negotiate a common communication with the law firm,” he said. “The rule does not prohibit the law firm from contacting the client.”That, he added, could favor the firm.Other problems, he said, are that a discussion on who owns the client file is in a commentary but not in a rule and the rule does not discuss what happens when a lawyer leaves and neither the firm nor the lawyer wants to take a client.On Romance’s first point, Horn said the committee considered that issue, but recognized the client to be a client of the firm, not the lawyer, and so didn’t prohibit contact by the firm. “The rule was to deal with the departing lawyer’s conduct,” he said.On other criticisms, he said the rule was not intended to say who owns a client file because there are contractual relationships and case law that determine ownership. He said what to do if neither the departing lawyer nor the law firm want a client is governed by Rule 4-1.6.Board member Jay White called the rule a good start, but said he agreed with the YLD reservations. McGrane then asked Horn to take the issue back to the DPC.On other matters, the board rejected a DPC recommendation to change Bar policies that would allow a partner or associate of a board member to represent respondents in limited types of Bar grievances. Current rules prevent any member of a governor’s firm from representing anyone in a grievance and prohibits their firm members from the same representations without a board waiver.Horn said the representation could occur only if the board gave a waiver, but other board members said it would create a bad impression.The board voted to reject that recommendation 14-11.The board did approve the DPC recommendation to rewrite several rules to replace the term “disciplinary resignation” with “disbarment by consent.” Horn said the committee was concerned the public would not appreciate that a disciplinary resignation was as serious as a disbarment.The board also approved the DPC recommendation to create a standing board policy that a grievance investigation may be deferred if there was a pending criminal or civil case on the same matter. “The purpose of the rule is to try to keep folks from using the disciplinary process as a substitute for civil proceedings or other remedies,” Horn said.Bar Counsel Tony Boggs said the change should not affect the statute of limitations on handling a grievance because the deadline would be tolled during the court proceedings as the complaint would be filed with the Bar but action on the complaint would be deferred.