LEO: Partnership Agreement - Departing  LE Op. 794

 

Partnership Agreement - Departing Attorney.

 

May 1, 1986

 

A law firm provides in its partnership agreement that a partner who

leaves the firm must continue to work on matters for clients the partner

served prior to leaving the firm. All bills, however, are submitted to the

predecessor firm for processing and payment. Although the departing

attorney performs the work, the predecessor law firm submits the bill to

client, receives payment from the client and remits payment to the

departing partner after deducting one-third of the payment received from

client for "continuing overhead burdens to the predecessor firm." The one-

third deduction is taken whether or not the predecessor firm actually

incurs expenses and no provision is made for expenses the departing

partner's new firm may incur. The client is not advised by the predecessor

firm that the firm retains one-third of the payment made.

 

Given the above circumstances, the partnership agreement is unethical to

the extent that it is inconsistent with DR:2-105. [DR:2-105]

 

Committee Opinion May 1, 1986