Enforcing Lawyer Non-Competition Agreements While Maintaining the Profession: The Role of Conflict of Interest Principles

Abstract:     
Lawyers reasonably may expect today that the membership of their law firm will change over time. Members of the firm, therefore, may attempt by contract to protect the law firm from the adverse economic consequences that can accompany a lawyer's departure from the firm and subsequent competition for a portion of the firm's clientele. Contractual efforts to limit or discourage competition between lawyers, however, are deemed unethical by the Model Rules of Professional Conduct and face close and usually unfavorable scrutiny from the courts.

In distinguishing the legal profession from other professions in which non-compete agreements are more commonly enforced, a number of courts have focused on the potential client's interest in being able to select any lawyer of its choosing. The result has been a nearly categorical rejection of all non-competition agreements among lawyers. Such a prophylactic rule is not necessary, however, to adequately address the concerns that may be unique to the enforcement of a non-competition agreement among lawyers. A rule of reason analysis that would protect clients from conflicts of interest, while allowing enforcement of non-compete agreements in other circumstances, offers a better approach to the issue. In five sections, this article analyzes the issue from the perspective of the various interests at stake and considers how best to preserve the professional nature of the attorney-client relationship without ignoring the lawyers' contractual undertaking not to compete.

Number of Pages in PDF File: 56

Keywords: non-competition, conflict of interest, professional conduct, competition, noncompetition

JEL Classification: K00, K19

Accepted Paper Series