New Rule on Leaving a Law Firm
Convocation approved amendments to the Rules of Professional Conduct (“Rules”) in June 2017 with respect to leaving a law firm. The new rule and its commentary provide guidance on choice of counsel, how a lawyer and law firm should interact when a lawyer departs and how lawyers should provide notice of their departure to clients. Specifically, the rule and its commentary address the notice to be provided to clients, requests by clients for the departed lawyer’s contact information, written authorization for the transfer of files and property, the lawyer’s notice to the firm and charging for the review of a file by a new lawyer when the client remains at the firm.
This e-Bulletin sets out some questions and answers that may assist lawyers in understanding their professional responsibilities with respect to the new rule. Lawyers should refer to the actual Rules to determine the full extent of their obligations.
What must a lawyer and a law firm do when a lawyer is leaving the law firm?
New subrule 3.7-7A (2) provides as follows:
When a lawyer leaves a law firm to practise elsewhere, the lawyer and the remaining lawyers shall
(a) ensure that affected clients are given reasonable notice that the lawyer is departing and are advised of their options for retaining counsel; and
(b) take reasonable steps to obtain the instructions of each affected client as to whom they will retain to act in relevant matters.
“Affected client”, “relevant matter” and “remaining lawyers” are all defined terms.1
When does this new rule apply?
This rule applies when a lawyer leaves a law firm and when a law firm dissolves (r. 3.7-7A [8]). The rule does not apply to a lawyer leaving a government, Crown corporation or other public body, nor does it apply to a corporation or other organization where the lawyer is employed as in-house counsel (r. 3.7-7B).
Who decides which lawyer the client retains as counsel?
When a lawyer leaves a law firm to practise elsewhere, it may result in the termination of the lawyer-client relationship (r. 3.7-7A [1]). In such situations, the clients’ interests are paramount. Clients should be free to decide whom to retain as counsel without undue influence or pressure by either the lawyer or the firm. The client should be provided with sufficient information by the lawyer and the remaining lawyers to make an informed decision about whether to continue with the departing lawyer, remain with the firm where that is possible or retain new counsel (r. 3.7-7A [2]).
Who should provide the notice to the client: the departing or remaining lawyer?
It is preferable to prepare a joint notification setting forth the necessary information for the client on the available options. However, factors to consider in determining who should provide notice to the client include the extent of the lawyer’s work for the client, the client’s relationship with other lawyers in the law firm and access to client contact information.
In the absence of agreement between the departing lawyer and the remaining lawyers as to who will notify the clients, both the departing lawyer and the remaining lawyers should provide notification (r. 3.7-7A [3]).
What should a law firm do if a client contacts the firm to request the departed lawyer’s contact information?
If a client contacts a law firm to request a departed lawyer’s contact information, the remaining lawyers should provide the professional contact information where reasonably possible (r. 3.7-7A [4]).
If a client decides to remain with the departing lawyer, what should the lawyer and law firm do in dealing with client files or property?
Where a client decides to remain with the departing lawyer, the instructions of the client referred to in the rule should include written authorizations for the transfer of files and client property. In all cases, the situation should be managed in a way that minimizes expense and avoids prejudice to the client (r. 3.7-7A [5]).
What notice is a lawyer required to provide to the law firm?
In advance of providing notice to clients of his or her intended departure, the lawyer should provide such notice to the firm as is reasonable in the circumstances (r. 3.7-7A [6]). Lawyers should also consider whether there is a legal requirement to provide the law firm with notice and how much notice the lawyer is required to provide (e.g., in an employment contract or partnership agreement).
Can a law firm charge for another lawyer to become familiar with a departing lawyer’s file?
When a client chooses to remain with the firm, the firm should consider whether it is reasonable in the circumstances to charge the client for time expended by another firm member to become familiar with the file (r. 3.7-7A [7]).
What supports are available for lawyers who have more questions about leaving a law firm?
For assistance interpreting the Rules or understanding other practice management obligations, please contact the Law Society at 416-947-3315 or 1-800-668-7380, ext. 3315, Monday to Friday 9:00 am – 5:00 pm EST and ask to be connected to the Practice Management Helpline.
1 Rule 3.7-7A(1) defines these terms as follows:
“affected client” means a client for whom the law firm has a relevant matter;
“relevant matter” means a current matter for which the lawyer who is leaving the law firm has conduct or substantial responsibility;
“remaining lawyers” means the lawyers who have, or are intended by the law firm to have, conduct of a relevant matter and the lawyers in the law firm who have direct and indirect management responsibility in respect of the practice of the lawyer who is leaving the law firm.
