TRP 252: [Legal] Avoiding Landmines in Lateral Partner Moves with Hilary Gerzhoy

[00:00:10] You're listening to The Rainmaking Podcast, hosted by high-stakes headhunter, author, and professional speaker, Scott Love. You're listening to The Rainmaking Podcast, and my name is Scott Love. Thanks for joining me on the show. I've got an announcement to make, everyone. With over 250 episodes, I've decided to add another series to our show that's going to be released usually on Tuesdays.

[00:00:38] Now, Thursday, every week, we're still going to bring you content that will help you grow your practice regardless of what industry you work in. Now, the show focuses on client development-related topics towards those in professional services. But because I work as a legal recruiter niched within corporate and finance, I come across a lot of legal-specific experts that have legal-specific advice.

[00:01:00] So, on Tuesdays, from time to time, we're going to release special episodes of the show that are only going to benefit those who work in legal. So, you'll be seeing those usually from time to time on Tuesdays. But every Thursday, I will continue to bring you content with guests who are helping people grow their practices. Our first guest in this series is Hilary Gerzhoy, and our topic title for this episode is Avoiding Landmines in Lateral Partner Moves.

[00:01:28] I saw Hilary speak at a legal conference last year, and she was fantastic. And she gives some great advice for those partners who are considering or are making a move. Hilary works with law firm partners who are moving and provides them with ethics, opinions, and advice, as well as advising law firms. She is the vice chair of the DC Bar Rules of Professional Conduct Review Committee and a member of the ABA's Ethics and Professional Responsibility Committee and the ABA's Ethics Series Advisory Board.

[00:01:57] She is an adjunct law professor at the Georgetown University Law Center, where she teaches legal ethics, and she serves on Law 360's Legal Ethics Editorial Advisory Board. I think you're going to get some great ideas from my conversation with Hilary today. Make sure you check out the show notes where you listen to this podcast, and you'll get all of her contact info directly there. As always, this show is sponsored by Leopard Solutions, legal intelligence suite of products, Firmscape and Leopard BI.

[00:02:25] Push ahead of the pack with the power of Leopard. And now here's my conversation with our guest, Hilary Gerzhoy. Thanks for listening. Hey, this is Scott Love with the Rainmaking Podcast. Our guest today is Hilary Gerzhoy, and our topic is avoiding landmines and lateral partner moves. Hilary, thanks for joining me on the show today. Thanks for having me. So I've done a lot of lateral partner recruiting and placements, and I always say when I explain this to a partner candidate,

[00:02:55] I'm kind of like the midwife of the process, because there's a lot that can go wrong. And from your perspective, too, ethics issues, things like that, there's a lot that can go wrong also. So let's kind of go into it. Let's look at what these landmines are and how partners can avoid those. What do you think are some of the more significant landmines that partners in transition need to watch out for, Hilary?

[00:03:17] Yeah, so I think there's two big sources of authority that lawyers need to be mindful of that sort of set the guidelines for what they can and cannot do. One is the partnership agreement, and the other are the ethics rules. And sometimes those two things are actually in conflict with one another, and they do not come out in the same way. Where there is a provision in a partnership agreement that is inconsistent with the rules of professional conduct, the rules of professional conduct actually trump.

[00:03:47] So you cannot create an agreement that violates the rules. So what are some of the things that happen here? What do the fights look like? What are the landmines? The fights are over the clients and the people, right? That is what the partner who is moving wants to keep the clients. The firm that is being left wants to keep the clients. The problems arise when people are not cognizant of what both their partnership agreement says

[00:04:17] and what the rules of professional conduct dictate on both sides, on the firm side and also on the individual lawyer side. So for example, talking to clients before you've told the firm that you're going to leave. Why is that a landmine? Well, first it's a breach of your fiduciary duty as a partner. But what I have seen happen is that that client then tells the firm. And so then the cat's out of the bag and you have lost all of your first mover advantage.

[00:04:47] It being the one who is sort of dictating the timeline of the process. So that's a big one. Same thing with talking to associates, counsel, anybody without a partner title, but even talking to people who are partners. So that's not a breach of your fiduciary duty. But again, you know, the more people who know that you are anticipating a move, the riskier it is for you to be able to keep that information fully confidential. Right. So let me ask you this then. Let's say if a partner is tempted.

[00:05:17] I know this client. We went to law school together. He's the godfather of my children. Is that an exception or what do you think the best decision is at that point? So I think it becomes really hard. And a lot of the clients that I talk to are a lot of my clients. My clients are all lawyers. They are friends with their clients. A lot of them. Right.

[00:05:37] Part of what makes somebody a really successful lawyer is becoming friends with your clients, having real personal relationships with those clients such that like they can be the godfather of your children. What I say to people is keep the circle as tight as possible. Right. And what you what your obligation is, is to not tell clients or anybody before you tell the firm. That is the rule. There's sort of no exception for how close you are to them or how much you trust them.

[00:06:05] Now, what happens in the real world is sometimes a little bit different. So sometimes people are not cognizant of the rules or, you know, that this constitutes a breach of fiduciary duty. Right. So they step into it without knowing. And other times it is so significant what the client thinks about the new firm that they wouldn't even make a move if the client wouldn't want to go with that firm.

[00:06:30] You know, my lawyer clients say to me, you know, I've got two major clients and what if they hate this new firm that I'm talking to and I just don't know that they hate this new firm. They had a bad experience one time. How can I like test the waters? And my guidance there is to have, you know, a conversation at the highest level you possibly can to sort of say not. I'm looking, I'm on the market, but hey, can you tell me like what are the other firms that you've been working with?

[00:06:56] Have had any good, particularly good experiences, bad experiences to try to keep it in a conversation like that? Because there really is no exception. And if you do tell the clients before you tell the firm the risk, there's a bunch of different things that can happen. And I've seen happen that make the process much more challenging for the lawyer who is leaving. Because if there's an accusation that you breach your fiduciary duty to the firm, there's potential remedies. What's the remedy? What are the damages for doing that?

[00:07:25] Maybe withholding your capital contribution, maybe not distributing what remains of undistributed profits, potentially going after you for monetary damages, like separate and apart from those two buckets. So that's sort of what can be at stake if you do have a misstep. That's really interesting. And let me ask you a couple of scenarios, things I've actually seen before.

[00:07:48] What if your client, the partner you're advising to says, my client asked me to move. My client told me they don't want me to stay at this firm. How does the ethics responsibilities, how does it shift in that regard? Yeah. So I actually have somebody who is in that camp right now. Like they have one client, huge telecommunications client, and that client doesn't want to work with the existing firm anymore. It's actually a rate issue. The firm's rates have just gotten too high.

[00:08:17] They can't tolerate it. But they love the lawyer and they want the lawyer. And the lawyer is really the primary person. So in that case, because the client is driving the move, then you can have a more sort of full-sum conversation with them. They say, you know, I want you to leave. And if they say, these are the firms that I'm looking at that I would be willing to bring my business to, then you have that conversation. And then you essentially sort of pause that conversation there.

[00:08:44] And then you go through the lateral partner process the way that you normally would, but not, you know, with updating the client every two seconds and sort of letting them know. But if it's a client-driven thing, so what the rules of professional conduct are geared towards is the protection of clients. We are a client services industry, and that at its core is what being a lawyer is. We are a service profession. The clients come first.

[00:09:09] And so if the client is driving this and saying, I want you to go somewhere else, then there's just more of a conversation that can be had because they're the ones that are making the move. All of the sort of jockeying and strategic play for the clients, at the end of the day, what I have seen happen more often than not is that clients know who they want to go with. They know that either they're going to stay with the firm or they're going to go with the lawyer.

[00:09:34] And so when you have that circumstance that you were describing, the client has made known what their decision is. They are not staying with the current firm. So it's almost not like, you know, giving the current firm the fair opportunity to make its case or, you know, any kind of solicitation because they've just told you they don't want to be there anymore. They want you to go somewhere else. Yeah, that's right. How does that apply then to a counsel that has clients that he or she has developed?

[00:09:59] Do they still have that fiduciary responsibility to the firm and not telling their clients that they're moving the same way a partner would? Yeah. So same obligation in terms of there's still a fiduciary obligation, even if you're not a partner. So the same thing would happen with counsel. I've even had associates, too, who are who have had some clients as well. And that general rule applies that you have to tell the firm first and then you can talk to your to your clients.

[00:10:25] Got it. OK, good. So we've talked about the first of the areas. We've talked about the clients. Tell me about the people you mentioned that. What should we keep top of mind in that regard, Hillary? So, again, priority is to tell the firm first before you tell anybody who works at the firm. Now, who do you tell the firm? Usually the partnership agreement actually calls out who you have to give your notice to is often the managing partner or members of the executive committee or your practice group leader.

[00:10:50] So it sort of depends on how large the firm is. Step one is you got to notify them and then you can tell other people that you're leaving. But the critical thing when you tell other people that you're leaving is that you can't solicit anybody to come with you while you're still a partner at the firm, because that, too, is a breach of fiduciary duty. Right. You're stealing from resources while you're still getting a firm paycheck of some sort. So the critical thing is to make sure that the firm knows first.

[00:11:16] And then I think in those conversations with associates and counsel and whoever you ultimately would like to take with you is to keep those conversations really short and very factual and to the point, which is I'm leaving. Do not disparage your current firm. It's never the right answer. Disparage your current firm.

[00:11:33] I would love to talk more about it when I am when I officially land and let's get in touch there and really keep it that sort of close unless you are in a circumstance where you can't continue your practice without those people. So I just worked on a move last month that was almost 30 lawyers moved at the same time. It was a huge, you know, it was a $70 million book of business.

[00:12:00] And you can't know one person can service a $70 million book of business. Right. That is that requires an entire infrastructure, an entire team, layers, partners, councils, council associates, really up to speed paralegals and legal assistants. Right. It's a whole in a lot of ways, like a practice group is kind of like its own law firm anyway.

[00:12:21] Like you work within the law firm, but you really are sort of your own independent operating unit that like, you know, you have the same subscription services to the research tools, but you really operate independently. And in that case, there are things that you can do to try to sort of streamline the process. That's what ends up happening more often than not is that the target firm knows this is the team and the target firm does all of that work.

[00:12:46] So what you want to do is not have the partner be the one to say calling up everybody and sort of coordinating timing and all that. You want the target firm to be the one doing that because then the partner is not breaching his or her fiduciary duty. Right. It's just the whole team is leaving and it's being done at the direction of the place that they're going. That's interesting. So would the targeting or the acquiring firm, would they be reaching out to associates also during that time?

[00:13:14] So I've seen that happen. I think it also depends how risk averse the target firm is. That's the other piece of it. So a lot of firms will say and I will talk to the target firms, the acquiring firms, and they'll say, we don't really want to irritate X, Y, and Z firm. Right. Like it's a small world. There's a lot of overlap. And so even if we technically could, we want to wait so that we don't sort of rub them the wrong way.

[00:13:41] There are other firms that say like, no, like they're if these partners come, because what is the reality of it? The reality is that in a practice group, there's usually a few people who bring in the work and get and divide that work out. And so if those people who bring in the work leave, there is nothing for anybody else to do. Right. So in in that circumstance and the circumstance of the group that I had that moved, once those key partners left, those associates literally would have no billable work available to them.

[00:14:11] They could change their practice area, but they would have no work available. So some of the target firms sort of take a different approach, which is like, I'm not even irritating the new firm, or the other, you know, the other firm that they're leaving. The practical reality is that they cannot exist at that firm in that same way anymore. I mean, I've had some target firms sort of frame it as like, I'm doing them a favor, right? I'm taking up their associates that cost them a lot of money that they now don't have any work to give. Right. That's right. I've seen that also.

[00:14:40] So what have you seen within a partnership agreement? What are the main components of that that a departing partner should be aware of and really pay special close attention to? There's a few categories. I think the first is what is the notice provision? So the notice provision is how long do you have to tell the firm, how long do you have to give the firm before you're released from the firm? Right. So you give notice and then is it 30 days and then you're released 60 days, six months.

[00:15:06] I've seen six months. Now the ABA came out with an opinion in 2019, opinion 489. And what it said was that fixed notice periods are unenforceable. A notice period is only enforceable to the extent it is needed to transition the work. So once you forge it, so say, say you have a single client and you give the firm notice and then you call up that client. You say, I'm not soliciting you, but I'm telling you that I'm leaving. And the client says, whoa, whoa, whoa. I want to come with you.

[00:15:35] I'm sending you an email right now. I want to go. And the client sends you that email. Everything's been transitioned, right? Like the client is coming with you. There is no work to transition. And so the notice period isn't enforceable anymore because the firm can't keep you as a punitive measure, which I have seen firms do to essentially sort of, you know, tie your hands behind your back and wait out a period so that the firm can make a pitch for your clients.

[00:15:59] So I think knowing what the notice period says, but then also knowing what the limitations are with respect to that notice period. And a lot of what I do is dealing with firms who are trying to enforce notice periods where there is really no basis to enforce them anymore. And usually the firms will will back down and will release people early, but oftentimes they won't do it in the initial interactions with the departing partner.

[00:16:24] That's interesting. I mean, I've seen some firms that I think they're kind of passive aggressive in how they deal with departing partners. And within their agreement, it says that if you don't stay or if you don't give such and such notice, then we're not going to pay you your distribution and you may not get back your cap contribution or something like that. Yeah. There was one candidate I knew he moved on his own. We stayed in touch.

[00:16:48] He had referrals for me within his own firm, but he said, I don't feel comfortable giving those to you because or actually to his old firm because they haven't given me my cap contribution back. And I don't want to disrupt that process. What do you think about that? Do you think firms can really do that? Well, so the question is, what can they legally do versus what do they do? Because these cases get litigated so rarely. So there is very little actual case law and precedent about what is allowed and what is not allowed.

[00:17:17] The handful of cases that have gotten litigated have really come out on the side of the individual lawyers and against the firms saying things like withholding a capital contribution because you were in breach of your notice period. Like that's a limitation on your right to practice law, on your ability to move between firms. That's a rule 0.6 violation, rule 5.6 violation, unenforceable. But it's really just a handful of cases that are out there.

[00:17:44] And what firms are banking on is that the lawyers are not going to sue them because the expense to sue gets really close to the amount of the capital contribution very, very quickly. And so the vast majority of partnership agreements have mandatory arbitration clauses, right? So you're not even getting into court anyway. It's arbitration that's going to be confidential. So you get a decision by an arbitrator that it is enforceable or it's not enforceable.

[00:18:10] And I handle those, but they never see the light of day because they're confidential. But even to engage in that is the arbitration is litigation and it's extremely expensive. And so it's only sort of worthwhile to do when the amounts are so substantial or when somebody really just is standing on principle. But I think that in a lot of cases, the firms know that they are not permitted to do it, but basically run the risk that, you know, so what?

[00:18:39] Because I know you're not going to sue me over it. The other thing is that the payback periods for capital contributions can be incredibly long. They can be 10 years. And so they sort of put you in this really, really long holding pattern of like, I don't want to poke the bear because I'm getting, you know, little drips every so on. Right. And I want to get it all versus, you know, you get your capital contribution back within six months and then it's over and the whole thing.

[00:19:04] And so firms are trying to draw that process out as long as possible in purchase because of how firms are monetized. Right. The capital contribution serves a purpose, which is to make sure that there's enough money available such that if business goes down and there's, you know, not the same billable hours that we can pay all of the fixed costs associated with running a law firm, which for big law firms, the overhead is is massive.

[00:19:28] Right. Like what an equity partner in a big law firm usually makes is somewhere around 30, 35 percent of what they originate. So think about all of that extra money is going to overhead and obviously, you know, somewhat not equitable distributions. But it's a huge amount of overhead. Absolutely right. Is there anything that partners should keep in mind so that they don't show up on the cover of Above the Law on a Monday morning? Anything related to bad press and a departure?

[00:19:58] Yeah. So I think being mindful of what the timing is, not engaging in solicitation. But I think the truth is the stuff that gets the press is the big moves, the moves that impact the bottom line of the firms. And so the firms, what I have seen, tend to get more aggressive the more money there is on the line. And that's not. And so things like accusations about breaching fiduciary duties or violating the ethics rules.

[00:20:24] I see them disproportionately when there's a lot of money on the line than when there isn't. And it has in no part based on the actions of the of the lawyer. Right. Because the firm is can get to be in panic mode and they see the money leaving, leaving the door. And what can they do in response? I mean, I have a client right now who is, you know, moving big firm to big firm. And the firm has boxed him out of all communications with his clients.

[00:20:53] He is off of every single email chain. He is not allowed to contact his clients directly. That is 100 percent a violation of the ethics rules. But they are. And so we are pushing back on that. But what they are trying to do is essentially hold him to the notice period and forbid him from engaging so that they can make the full play for the client. Because the firms don't have the same restrictions that the lawyers have. Firms can solicit their own clients all they want. And so they can sort of have any kind of conversation.

[00:21:22] They can make deals. They can talk about alternative fee arrangements. They can talk about, you know, caps on rates. All of the kind of pitching stuff that the departing lawyer can't do. What's the remedy for that then? The remedy is to hire an ethics lawyer to remit you and get involved and to say, hey, firm, you're doing this. You are you are not allowed to do it. It's a one point four violation. The client has made clear that this is their lawyer. You can't box them out of the communications.

[00:21:46] But usually that's what happens is that you sort of need to retain an outside lawyer to be able to assert your rights and get the firm to to do what it needs to do. Yeah, because honestly, this is something I know most of the partners I talk to, they just they're not thinking about this. They're thinking about doing their work as a lawyer. And so this is really interesting to me. So we've talked about clients. We've talked about people. Are there any other major areas that partners need to be mindful of when they transition besides those two areas?

[00:22:15] Yeah, I think thinking about your AR, thinking of what money is out there, because where do the firms have leverage in general in this process? Whoever has the money has the leverage. Right. So once you've gotten your bonus, if you get a year end bonus, once you've gotten your all your distributions, you are in a much more powerful position to believe to leave because the firm is not holding a whole bunch of your money.

[00:22:38] But if you are at a firm where, you know, the cycle of payment is such that, you know, it's six months until you get paid what you were paid, you know, what you earned previously. Obviously, it becomes a lot harder to leave in terms of the cycle and leaving money on the table. But in terms of leverage, when the firm can point to things that you have done that are inconsistent with the best interest of the firm, they have leveraged to do things like withhold your capital contribution or your undistributed profits.

[00:23:05] So what I have seen happen is instances where lawyers sort of worst case scenario stop billing their time while they're still at the firm. I've talked to lawyers who have, you know, have said to me that they told me that they've done this. And I obviously tell them, like, you can't do this and we have to correct what you have done. But they're mad. Right. A lot of lawyers, when they leave firms, the reason that they are leaving is because they feel like they haven't been treated fairly. And one way that I have seen lawyers try to extract revenge is, well, I'm just going to not bill my time.

[00:23:35] Right. And it's going to be sort of a good deal for the client because the client's going to get a bunch of work for free. Maybe they're going to want to leave with me. And I, you know, I don't need to make X massive firm, you know, another penny. If you do that, you open yourself up to all kinds of things. Right. Because it's not just we're going to withhold your capital contribution. It's you took money from our pockets and we're going to sue you for that money. And I've seen and I've been involved in suits that that are the result of that.

[00:24:03] So I think first thing to keep in mind is resist the temptation to do anything other than what you would normally do as a partner in good standing. Because even if you're upset, even if you feel like you've been treated improperly, the solution is not in that. Right. So continue to bill your time, continue to send out invoices. And then the other piece is following up on invoices in a timely manner.

[00:24:25] So a lot of firms will have, you know, protocols for, you know, if an invoice is 60 days past due, you're supposed to let the client know and do, you know, X amount of follow ups. Continue with the protocol and make sure there's a written record of you continuing with the protocol. That's great. One of the things that firms will have in the partnership agreements will be we can actually count your AR against your capital contributions.

[00:24:48] And that argument is a lot harder to make when you say, well, I can't control of my client's pay, but I did the piece that I could control, which was sending out my invoices in a timely manner and following up with that. That's a very good point. What if a partner has this pending matter, whether an existing or a new client, and I don't want to bring it on my current firm because I'm so close to leaving and it's going to be a big matter? What's that partner's correct decision based on ethics obligations in that situation, Hillary?

[00:25:19] It becomes really hard because there's actually, and I have this happen all the time. There's two things that are in tension. One is you don't want to breach your fiduciary duty to your existing firm, right? So you're not supposed to be sending work away that your current firm can service. But the other piece is thinking about what the relationship is with the client. So I was just talking to somebody earlier this morning, actually, who said to me, who's going to leave? She's leaving her firm very soon. She has a relationship with somebody and it's a big, big client for the firm. But the client would only hire a firm, right?

[00:25:47] And they have explicitly said to her, we don't care about the firm. We care about you. And so she was asking me, well, what do I do here? Because I'm supposed to, you know, you're telling me I'm supposed to bring it into my existing firm, but then I'm going to leave. Isn't that a disservice to the client? And I think there are exceptions under the ethics rules for essentially like exigent circumstances where it would not be in the client's best interest for them to not know that you're leaving.

[00:26:14] So I think what happens is it's really, it's a fact dependent question. And if that's an instance in which it's very helpful to talk to an ethics lawyer, because it really does depend on the circumstances. But in instances where the firm could actually absolutely service the work, there's no indication that the client is, you know, so wedded to you in particular. You just really want to take it with you to some somewhere else. Then we really are in a different sort of camp of you've got to give your firm a shot to get that work.

[00:26:45] Absolutely. Right. Right. Right. I get that. So so let's just say we're at this point where the partner has turned his or her notice in. What happens then? And tell me about the resignation. Is it just basically a letter? I've decided I'm leaving. This is my last date. Thank you for the time here. And let's talk about next steps. What do you think should be in that resignation letter? And then what happens at that point on? Yeah. So it's it's always a resignation email. It's almost always a resignation email. And what should be in it? I think there's a few a few key things.

[00:27:14] It's when do you want your last day to be right? So you can acknowledge that the partnership agreement has a notice provision. But when do you want to be released and make sure that that's a request reasonable. Right. Like so I tell people that, you know, people will say, well, I want to leave tomorrow. If you need it needs to be an amount of time that you can reasonably transition work. So what do you want your last day to be? What have you done to date such that some other lawyer of the firm could take over for you? Because you want to be satisfying that standard to get out of the notice provision.

[00:27:43] Right. So have you made transition memos? Are you in the process of writing transition memos? Have you identified other people in the team that could theoretically take over the work? Like how if it were the case that you, for whatever reason, you know, got sick and had to be in the hospital for two weeks, what would happen to that existing work? How is it set up that the firm would continue to be able to service it? Like thinking about it from that perspective and showing the firm what you've been doing to make that happen.

[00:28:10] And then making it clear that you haven't contacted associates, you haven't contacted clients and also organized from your. So I think that's the sort of content of the email. And then, you know, that you want to be available and you are ready to help with anything that the firm needs to, you know, effectuate a good transition.

[00:28:29] And then on the sort of side of what else the lawyer can be doing during that time, I think one thing that's really important is organizing all your client files such that when cases do transition with you, stuff can be moved easily. Because what I'm seeing the firms do more and more is expend less energy gathering documents. Right. Once the client is out the door, I have seen firms be willing to do not very much in terms of gathering everything that needs to get gathered.

[00:28:57] And this becomes particularly important with emails, like firms that are just really not willing to do full email searches. So, right, unless you have a designated client folder that like you're sort of out of luck. And so I tell partners before you're going to give notice, spend time doing that, because when you when that work transitions, that's going to be like the make it or break it. Right. If you don't have the critical email that you gave the client, you know, the talking points for this upcoming thing, that's going to impact the service to the client.

[00:29:26] And so you want to set yourself up for success at the new firm. Right. Let me ask you this. I've seen very few, but some cases where the departing partners were sued by the previous firm because of copying confidential information and taking it with them. What's acceptable in terms of you mentioned emails, resignation email, et cetera on that. But in terms of me getting my information ready to take with me, what should a partner be mindful of in that regard, Hillary?

[00:29:54] So do not send yourself anything. Do not start printing out files. I've seen lawyers get sued over this. I have seen lawyers almost get sued over this. So there's two sort of buckets. There's the client material. Right. The client owns the client file and the custodian of the client file is whoever the counsel is at the top. So until the client says, I am leaving with you, the file lives with the firm. You can't take it. You can't copy it. It's not yours.

[00:30:22] Once the client says, I want to go, then you instruct the existing firm to send it to the new firm. Right. That's how custody works in terms of the client file. The other bucket that I've seen more and more, and this is actually where, where I think it happens much more frequently in this category, which is the firm IP. So I've had lawyers who are, you know, in a transactional practice, for example, and they have spent 15 years doing this work and they've created templates of how to do it.

[00:30:50] Right. And like here. And so for every deal they do, they open up this template and it's sort of the Bible of how to do this case. And they desperately want to take it because it streamlines their practice. In a lot of instances, they say, I'm the one who made it. Right. Like it wouldn't exist. But for me, that is very clearly in the firm IP camp. You cannot take it. The firm owns the things that you made while you were there for the benefit of the firm. Overall, you were getting paid to do it. Right. You were getting paid by the firm to make this.

[00:31:18] And so you can't take it. And that is where lawyers can get in a lot of trouble. In large part, because the firms track this stuff. Right. The firms are tracking what is what's getting printed, what's getting emailed. And so I had somebody a couple of months ago who called me, you know, in a panic because he emailed himself a bunch of stuff. And then he immediately got an email from IT saying we have been we've seen that you just sent yourself a bunch of documents.

[00:31:46] Practice group leader is brought in. We are having an in-person meeting tomorrow. And it could have been really bad. I think he was very lucky. He was very lucky that he could essentially do a mea culpa. And I am so sorry. And I deleted everything. And I'll sign an attestation saying I deleted everything. But I think there's a lot of other firms that would have not let it go so lightly. Yeah, that's right. Wow. You can really get in hot water pretty quickly. We're doing all this. Right. Right. Yeah, you really can. So let's say the resignation email is sent.

[00:32:16] Does the partner schedule an in-person meeting before they send the resignation email? Or what do you think is normally the case? I think it completely depends on the relationships. I will have some people who say I'm never sending foot in the firm again. Right. I'm sending the resignation email. I am not speaking to face to face with anybody and maybe not even over the phone. And then I have other people who say, you know, the firm's been good to me. I feel, you know, I think it's right to make a move. But, you know, I've worked with these people for a long time and I feel loyalty to them. And I want to and they deserve an in-person conversation.

[00:32:46] And so I think there's no one size fits all. It really depends on the relationships. I think the best thing to do is to talk to people in life when you can talk to people and have in-person conversations with people that you trust and that you've worked with and, you know, who have been part of your career. It's good to do that. But I've seen so many instances where it just doesn't make sense because there's so much bad blood. Yeah, absolutely right. I've seen that, too.

[00:33:11] I've seen it where the partner gives notice and 60 minutes later he's being escorted out by security, shut out of everything. And then the moving trucks come over, pick up all the files and it can be pretty, pretty bitter. Right. Yeah, I've seen it, too. And like sort of almost instantaneous, instantaneously being disconnected from all firm services and all platforms, which, by the way, is an independent violation of the ethics rules. Right. Because that lawyer is still like the clients haven't decided at this point.

[00:33:39] And so that lawyer still has clients and now he's not able to do work for those clients. That is a violation. But the firm sort of, again, roll the dice. What are you going to do about it? That's right. Wow. How about that? Well, let me let me ask you this, Hillary, as we bring it to a close, if you could summarize kind of three action steps that you'd give somebody listening that's thinking about moving or that is moving. What would those three action steps be?

[00:34:04] Yeah. So I think one thing is to sort of acknowledge that there's no reason that you would know how this process operates unless you've done it before. And it's it's a there are specific ethics rules. There are specific sort of fiduciary obligations that unless you have been through it, you have no reason to know. So I think one, the first thing to do is take a look at your partnership agreement. Take a look at the ethics rules and think about, is this going to be a fight? Is there any world in which this is going to be a fight?

[00:34:32] Because if there is a world in which this is a fight, you need a lawyer. You need an ethics lawyer because you don't want to go into a fight with nothing. Right. And you don't want to go into a fight with that without knowledge, without backup. So if there's going to be clients going with you, anticipate the fight. Think about that and think about whether or not you need a lawyer. Be strategic about your timing. So assume that once you give notice, the firm is not going to pay you anymore. We hope that's not the case.

[00:35:01] It's often not the case, but assume that. So time your notice as best you can so that you suffer that the least. So what that often means is that the target firm makes up the difference. Right. So they were sort of assuming that we're going to leave a bonus on the table. We're assuming we're going to leave undistributed profits on the table and the new firm is going to make up the difference. Or wait until the point of time you've been paid as close to in full as possible. And that's the point at which you give notice.

[00:35:27] And I think the third thing is to resist the temptation to step over the line. Because at the end, when people step over the line is really the solicitation of clients early in the process before they've told the firms. And I think the reason to resist that temptation is twofold. One, you're exposing yourself to risk unnecessarily. And it is real risk that the firm will care about.

[00:35:50] And the other thing, and the reason I think it's unnecessary, is that in the vast majority of cases, as I was talking about before, clients know what they're going to do. Right. And so they know if they're going to stay with you or they know if they're going to go or they're going to, you know, stay with the existing firm. And so doing all of these things to sort of get the strategic advantage to solicit them in advance is ultimately not worth it. Because in most cases, you're not moving the ball. Yeah, that's right. Well, thank you for being here, Hillary. Thanks for sharing your wisdom.

[00:36:18] And tell us about your services and other resources you have that can help our listeners. And we'll certainly put all of your contact info and your LinkedIn link in the show notes. Yeah, absolutely. So I do legal ethics and malpractice. So I represent lawyers and law firms in all things that lawyers and law firms need with respect to the practice of law and the rules of professional conduct. And I do a ton of lateral partner moves. I think this year I'm at like 65 moves. I do a lot of them.

[00:36:46] And so one of the things that I do is I talk to people early in the process to sort of let's get a game plan together. Like here are where the landmines are. Here's what you need to be cognizant of. And then, you know, we have that initial conversation. And then usually we don't talk again until, you know, a week or two before I know that you're going to give notice. And then we really we map it out. Right. Like because a lot of this is about timing and there are strategic advantages that lateral partners have that they should take advantage of.

[00:37:14] And there are risks that they shouldn't incur unnecessarily. And my philosophy is if there is a strategic advantage on the table that you are allowed to take, let's take it. Right. And the firm's not going to tell you you're allowed to take it. The firm is actually often going to tell you you're not allowed to take it. And they're wrong. But know where they're wrong because that is a huge amount of power. Because part of the issue, too, with the notice situation is you want the client to hear it from you. You don't want the client to hear it from the firm. And we don't know what the firms are going to be telling the clients.

[00:37:44] So that's a big piece of it. And then I help lawyers navigate. Oftentimes we'll get, you know, aggressive emails from general counsel who get upset that lawyers have done what they're permitted to do. And I help, you know, interface with the general counsel or behind the scenes responding to sort of what they're saying to try to get people out as easily as possible with the money that they are entitled to so that they can get set up and up and running and practicing law, which is what they want to do. That sounds great, Hilary.

[00:38:11] Thank you so much for being a guest on our show and for offering your wisdom as a resource. I'd love to have you back on the show in the future. Thank you so much for being here today, Hilary. Yeah, thank you so much. It was great to be with you. Thank you for listening to The Rainmaking Podcast. For more information about our recruiting services for international law firms, visit our website at attorneysearchgroup.com.

[00:38:37] To inquire about having Scott speak at your next convention, conference, sales meeting or executive retreat, visit therainmakingpodcast.com. Thank you.