California
Attorney Ethics Counsel

March 29, 2022

Legal Ethics and Your Law Firm Partnership Agreement

You may agree that your firm’s partnership agreement, or shareholders’ agreement, and other firm governing documents, are critical to your firm’s business operations and success. And you would be right about that. But beyond business purposes, these firm agreements are critical to ensure compliance with your legal ethics duties.

How so?  Well-developed and drafted firm agreements can ensure that the firm and its attorneys meet their ethical obligations in critical areas, including:

  • Succession planning: leaving your firm without a workable succession plan places your clients’ interests at risk, potentially violating multiple Rules of Professional Conduct;
  • Impaired attorneys and competence: your firm’s governing documents will dictate how and when you handle the increasingly serious issue of attorney impairment, which implicates your duties of competence and many other applicable Rules.
  • Attorney mobility: firm agreements can ensure that the firm and its attorneys meet their ethical obligations when an attorney leaves the firm, whether voluntarily or otherwise.
  • Dissolution: dissolving a firm involves virtually all of the Rules of Professional Conduct, including the duty of competence, the duty of loyalty, duties regarding termination of representation, and confidentiality. Having a plan in your firm’s agreement will ensure you meet these obligations.

Updated partnership agreements and other firm governing documents and provisions are a good way to meet, and in some circumstances may be required to meet, the firm’s legal ethics obligations.

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