Two new Advisory Opinions released by the Ohio Board of Professional Conduct
The Ohio Board of Professional Conduct has issued two new Advisory Opinions. The first, Opinion 2023-07 titled Discharged Lawyer’s Solicitation of Former Client applies to Ohio Prof.Cond.R. 1.16, 4.2 and 7.3 opining with rare exception, that a discharged lawyer cannot solicit a former client after they have retained a new lawyer in the same matter. The second, Opinion 2023-08 titled Departing Lawyer Reimbursing Firm for Advertising Costs applies to Ohio Prof.Cond.R. 1.5 and 5.6 opining that an employment clause requiring departing attorneys to pay 25 percent of the attorneys fees on a transferred case in addition to a quantum meruit claim is prohibited as a financial deterrent for departure.
As a disclaimer, Advisory Opinions, written by the Ohio Board of Professional Conduct are nonbinding and in response to a prospective or hypothetical question and do not reflect the opinion of the Supreme Court of Ohio. Should you have any ethical questions, you should contact your Ethics and Professional Responsibility counsel.
Opinion 2023-07 Discharging Lawyer’s Solicitation of Former Client answers the question, “May a discharged lawyer solicit a former client to continue the client-lawyer relationship after the client has retained new counsel in the matter?” The opinion states a client has “an absolute right” to discharge an attorney at any time. On the other side as Ethics and Professional Responsibility Counsel, we are regulary contacted by attorneys who wish to withdraw from a matter and provide advise as to best course.
The Opinion further examines, Prof.Cond.R. 4.2 which serves the purpose to keep lawyers from overreaching or interfering in other client-lawyer relationships. The opinion explains that while the rule itself may say “In representing a client…” it has been applied to lawyers acting pro se citing Disciplinary Counsel v. Bruce,158 Ohio St.3d 382, 2020-Ohio-85 and Disciplinary Counsel v. Bennett, 146 Ohio St.3d237, 2016-Ohio-3045. The opinion also references N.Y.CITY Prof. Ethics 2011-1 to explain, if a former client is represented by a new attorney, you must ask the new counsel for consent before communicating with the former client as a part of Prof.Cond.R.4.2.
However, there are a few legitimate reasons for the lawyer to communicate with the former client after they follow Prof.Cond.R. 1.16 to ethically terminate the relationship. Prof.Cond.R. 7.3(a)(2) permits solicitation, but this cannot be relied on when Prof.Cond.R. 4.2 is implicated. Inquiring about outstanding payment, a refund of fees or expenses, return of client property not resolved at the time of termination are acceptable. A former client reaching out to a previous lawyer for consultation is also can be permissible. The Board does not believe in a blanket prohibition against all contact with a former client by a discharged lawyer.
Opinion 2023-08 titled Departing Lawyer Reimbursing Firm for Advertising Costs answers the question, “May a law firm add a clause to its standard employment contract requiring a departing lawyer to pay the firm the quantum meruit value of work completed prior to the lawyer’s departure, plus 25 percent of the overall recovery of attorney fees on any transferred case to reimburse the firm for its advertising costs?” A lawyer’s professional autonomy and a client’s freedom to choose their counsel are protected by the Rules of Professional Conduct as there is a strong public policy interest in both issues. Referencing Ohio Prof.Cond 5.6(a) the opinion explains the right to practice, and the prohibition of employment agreements restricting the right of a lawyer to practice after termination of the relationship.
There are only a few jurisdictions that allow for reasonable financial penalty and the higher the percentage the more likely it will be violated according to ABA/BNA Lawyer’s Manual on Professional Conduct, 91 Types of Practice, Private Firm, 91:701.20.180.30 Withdrawal and Termination (2022). The opinion shows other jurisdictions have previously found 12.5 to 15 percent of fees received to be an unenforceable amount in Denburg v. Parker Chapin Flattau & Klimpl, 604N.Y.S.2d 900 (N.Y. 1993) and Eisenstein v. Davis G. Conlin PC, 827 N.E.2d 686 (Mass. 2005)). While the proposed 25 percent is said to be for advertising costs the board has determined it is an arbitrary amount possibly resulting in windfall and nothing more than a financial disincentive. Justifying that in Adv. Op. 2019-04 the board explained an impermissible restriction on the practice of the lawyer can be determined by asking whether the lawyer is given significantly less discretion in pursuing future claims than a lawyer not subject to the agreement. This can include economic deterrent for the departing attorney affecting the clients’ right to retain counsel of their choosing. Even further it goes against Adv. Op. 2021-7 which prohibits the requirement of a percentage of fees be paid by the departing attorney for work after departure. Finally, there are Prof.Cond.R. 1.5 implications as it would impose the division of attorney fees paid by the client without input from the client and there would be no joint responsibility for the matter, which the firm may ultimately benefit financially from.
Should you have any questions regarding these Advisory Opinions or any other Ethics and Professional Responsibility Issues, we would be more than happy to speak to you. Our contact information can be found at www.koblentzlaw.com.