LEO: Corporation - Employment Agreement  LE Op. 985

 

Corporation - Employment Agreement.

 

November 16, 1987

 

You ask whether an attorney may enter into an agreement with a

professional corporation which would allow the value of the stock of a

withdrawn member to be reduced if the attorney (a) withdrew in concert

with other attorneys and/or (b) carried with him or her or them clients of

the firm.

 

Your inquiry is governed by Canon 2 of the Code of Professional

Responsibility. Specifically, DR:2-106(A) states that "a lawyer shall

not be a party to a partnership or employment agreement that restricts the

right of the lawyer to practice law after the termination of a

relationship created by the agreement, except as a condition to payment of

retirement benefits."

 

The Committee opines that only those agreements that restrict the right

of a lawyer to practice law after the termination of the relationship are

prohibited; there is no prohibition on agreements that affect the

termination of the relationship itself.

 

Accordingly, it is not improper for a professional corporation to enter

into an agreement with attorneys of the corporation which states that the

value of withdrawing attorney's stock would be reduced if he or she (a)

withdraws in concert with other attorneys and/or (b) carried with him, her

or them clients of the firm.

 

Committee Opinion November 16, 1987