Risk Update

Breakups — Lawyer Laterals, Attorney Departures, Firm Dissolutions, Client Poaching, Legal Recruiters & Associated Risk Drama

I’ve been accumulating a growing list of stories about when things go sour in terms of lateral risk, lawyer departures, firm fights and breakups — and then things go really sour. Kicking off this week with some of the more interesting and relevant examples on my list.

Kennedys Beats Appeal In Client Poaching Suit” —

  • “An attorney failed to establish that a Kennedys lawyer poached his clients in a freight business dispute, as he didn’t back up his ‘bald assertions’ that his former clients were fed lies, a New Jersey state appellate court held Monday.”
  • “Horowitz alleged that after he encouraged his clients GMG Transportation Inc. and GMG Transwest Corp. to hire Furman as local counsel, Furman suggested to the companies that if they didn’t fire Horowitz, they would lose the case. Furman worked at the time with Carroll McNulty Kull LLC, which later merged with Kennedys.”]
  • “But other than disputed telephone conversations, Horowitz failed to introduce specific evidence in his amended complaint that substantiated his assertions, according to the appellate court, which declined to allow discovery so the lawyer could attempt to find more information.”

Bitter Divorce: When Law Firm Breakups Go Sour” —

  • “Partner departures from a firm are often civil, if not amicable, and pass without public incident. But the defection of a partner from one firm to another can be the catalyst for a fraught dispute over fees, returned capital or the circumstances of their exit.”
  • “Provisions in a partnership agreement designed to dissuade defections can form the basis of a post-departure lawsuit. This was the case when a former Roetzel & Andress LPA shareholder sued the firm in October 2015, accusing it of trying to enforce an allegedly unlawful noncompete clause in his contract after he left the firm for FisherBroyles LLP.”
  • “‘The shareholders’ agreement brazenly attempts to impose an unlawful noncompete restraint on the practice of law by an attorney by purporting to financially punish a departing shareholder who attempt[s] to continue practicing law in any geographic area where Roetzel maintains an office,’ Menzies said. The parties settled quickly and the matter was resolved in December 2015, a few months after Menzies filed his complaint.”

NJ Atty Ducks Cost Of Removing Name From Ex-Firm’s Videos” —

  • “Begelman & Orlow PC must reimburse a former name partner for half the cost of removing references to him from its marketing videos but the law firm can continue using a video showing the back of his head, a New Jersey state appeals court said Tuesday.”
  • “That portion of the ruling was at odds with an earlier consent order in the case, which required the defendants to ‘remove from their website any reference to the plaintiff … and remove [his] images as well,” and which stated that the defendants ‘shall cease using plaintiff’s name in any way whatsoever,’ according to the two-judge panel.”

Recruiter Sues Windels Marx, Seeking $3 Million for IP Group Placement” —

  • “A headhunting firm has sued the tri-state law firm of Windels, Marx, Lane & Mittendorf for $3 million, claiming the law firm failed to pay a placement fee for an IP group move from Budd Larner.”
  • “‘Austin & Devon did everything it promised to do—it introduced Windels Marx to a group of talented attorneys that the firm liked enough to hire,’ the complaint said. ‘But despite reaping the rewards of Austin & Devon’s work, Windels Marx will not honor its promises.'”
  • “The recruiting firm said it signed a contract with Windels Marx in 2013 that put a 12-month time limit on any obligation to pay Austin & Devon in the case of associates who were referred to the firm, according to the complaint. But because partner and group moves typically entail lengthy negotiations, no such limit applied, Austin & Devon claims.”