I Hope That This Hillman Article on Client Choice Isn't Intended to Create More Hurdles for Shinglers-to-Be
Under legal ethics principles, a clients' right to the attorney of their choosing trumps even the economic interest of the firm representing the client. For that reason, firms cannot force lawyers to enter into non-compete agreements or impose onerous restrictions that would prevent a client from following a departing attorney to another firm or to his own practice. Were it not for the principle of client choice, the increasing trend of "biglaw to yourlaw attorneys" (that I've described in various posts )here would stop dead in its tracks since most big firm attorneys are generally manage to take a few clients with them, who provide a source of revenue as they grow their new firm (in fact, many large firm attorneys find that the clients who migrate with them provide them with even more work, because the attorney can charge more affordable rates as a solo). And attorneys would be forever married to a single law firm, even if another professional opportunity presented itself that was more beneficial not just for the attorney, but for his client as well.
But now comes this seemingly benign article by Professor Robert W. Hillman, entitledClient Choice, Contractual Restraints and the Market for Legal Servicesthat lays the groundwork for upending the existing scheme. Hillman writes that client choice doesn't justify the present bar to non-compete agreements because client choice is only a myth. Hillman writes that as a practical matter, the only clients who have choice are sophisticated large firm clients, while clients of lesser means may not be able to afford lawyers at all, or are forced to settle for those who charge the cheapest rates. Because client choice is a myth, Hillman suggests that there's no basis more basis in law than in any other profession (such as medicine or accounting) for prohibiting non-competes or other restraints on lawyers' ability to take clients with them when leaving a firm.
Though I don't know for sure what motivated Hillman's article at this particular time, I'm wondering if it has anything to do with the ongoing conversation about "publicly traded law firms." As Larry Ribstein writes in this informative piece, one potential impediment to a publicly traded firm is that most potential investors won't want to buy a firm "whose assets can walk." But Ribstein then suggests that if publicly traded firms turn out to be economically viable, then lawyers may decide to change the rules that prohibit non-competes. And in that regard, Hillman's article helps to clear the path for eliminating the prohibition on non-competes by arguing that these restrictions don't serve any purpose and thus, don't distinguish the legal profession from other professions like medicine or accounting where non-competes are pervasive.
On its face, Hillman's article seems benign, just a scholarly discussion of the historic origins of the principle of unfettered client choice in the legal profession. But if followed to its logical conclusion, Hillman's article will remove any incentive for lawyers to cultivate trusted relationships with clients (since those bonds can be severed if the lawyer leaves the firm) at a time when clients are already deeply disatisfied with the lack of personalized service provided by large firms. Shouldn't our code of legal ethics promote the interest of clients, not law firms?
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Posted by: incedbagbeabe | May 2, 2009 4:28:09 AM
What you present is very much in keeping with the concept of 'team representation,' the idea that no one lawyer represents the client allowing for the client to believe the 'firm' represents him undermining any individual relationship with an attorney. This is generally created to prevent such defections by clients when a particular lawyer leaves, the lawyer the client has a relationship with. The scenario you present is not only 'not' unreasonable but scarily possible because everyone wants to protect what they believe is theirs. And investors would want to protect their 'assets' - the high-ticket clients.
Posted by: Susan Cartier Liebel | Dec 16, 2007 7:39:52 PM
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