1-6
7-12
13-18
19-24
25-30
31-36
37-42
43-48
49-54
55-60
61-66
67-72
73-78
79-84
85-90
91-96
97-102
103-108
109-114
115-120
121-126
127-132
133-138
139-144
145-150
151-156
157-162
163-168
169-174
175-180
181-186
187-192
193-198
199-204
205-210
211-216
217-222
223-228
229-231
question of law that is beyond the scope of these Rules.
PROPOSED RULE 1.17
SALE OF A LAW PRACTICE
conditions are satisfied:
the practice has been conducted; and
the buyer with written notice of the fee agreement with each of the seller’s clients and any
other agreements relating to each client’s representation; and
client's right to retain other counsel or to take possession of the file, and the fact that the
client’s consent to representation by the purchaser will be presumed if the client does not
take any action or does not otherwise object within thirty (30) days of receipt of the notice.
the purchaser only upon entry of an order so authorizing by a court having jurisdiction or
by the presiding judge in the judicial district in which the seller resides. The seller may
disclose to the court in camerainformation relating to the representation only to the extent
necessary to obtain an order authorizing the transfer of a file.
client shall not be increased by reason of the sale, and the purchasing lawyer shall abide by
any agreements between the selling lawyer and the client with respect to the representation
as are permitted by these rules and of which the purchasing lawyer was given notice prior to
the transfer of the representation.
[1] The practice of law is a profession, not merely a business. Clients are not commodities
that can be purchased and sold at will. Pursuant to this Rule, when a lawyer or an entire firm ceases
to practice and another lawyer or firm takes over the representation, the selling lawyer or firm may
obtain compensation for the reasonable value of the practice as may withdrawing partners of law
firms. See Rules 5.4 and 5.6.
[2] The requirement that all of the private practice be sold is satisfied if the seller in good
faith makes the entire practice available for sale to the purchaser. The fact that a number of the
seller's clients decide not to be represented by the purchaser but take their matters elsewhere,
therefore, does not result in a violation. Neither does a return to private practice as a result of an
unanticipated change in circumstances result in a violation. For example, a lawyer who has sold the
practice to accept an appointment to judicial office does not violate the requirement that the sale be
attendant to cessation of practice if the lawyer later resumes private practice upon being defeated in
a contested or a retention election for the office.
[3] The requirement that the seller cease to engage in the private practice of law does not
prohibit employment as a lawyer on the staff of a public agency or a legal services entity which
provides legal services to the poor, or as in-house counsel to a business.
[4] The Rule permits a sale attendant upon retirement from the private practice of law within
the jurisdiction. Its provisions, therefore, accommodate the lawyer who sells the practice upon the
occasion of moving to another state. Tennessee is sufficiently large that a move from one locale
therein to another is tantamount to leaving the jurisdiction in which the lawyer has engaged in the
practice of law. To also accommodate lawyers so situated, the Rule permits the sale of the practice
when the lawyer leaves the geographic area in which he or she is practicing as well as when the
lawyer leaves the state.
[5] The Rule requires a single purchaser. The prohibition against piecemeal sale of a
practice protects those clients whose matters are less lucrative and who might find it difficult to
secure other counsel if a sale could be limited to substantial fee-generating matters. The purchaser
is required to undertake all client matters in the practice, subject to client consent. If, however, the
purchaser is unable to undertake all client matters because of a conflict of interest in a specific
matter respecting which the purchaser is not permitted by Rule 1.7 or another rule to represent the
client, the requirement that there be a single purchaser is nevertheless satisfied.
[6] Negotiations between seller and prospective purchaser prior to disclosure of information
relating to a specific representation of an identifiable client no more violate the confidentiality
provisions of Model Rule 1.6 than do preliminary discussions concerning the possible association
of another lawyer or mergers between firms, with respect to which client consent is not required.
Providing the purchaser access to client-specific information relating to the representation and to the
file, however, requires client consent. The Rule provides that before such information can be
disclosed by the seller to the purchaser the client must be given actual written notice of the
contemplated sale, including the identity of the purchaser and any proposed change in the terms of
future representation, and must be told that the decision to consent or make other arrangements
must be made within 30 days. If nothing is heard from the client within that time, consent to the sale
is presumed.
[7] A lawyer or law firm ceasing to practice cannot be required to remain in practice because
some clients cannot be given actual notice of the proposed purchase. Since these clients cannot
themselves consent to the purchase or direct any other disposition of their files, the Rule requires an
order from a court having jurisdiction authorizing their transfer or other disposition. The Court can
be expected to determine whether reasonable efforts to locate the client have been exhausted, and
whether the absent client's legitimate interests will be served by authorizing the transfer of the file so
that the purchaser may continue the representation. Preservation of client confidences requires that
the petition for a court order be considered in camera.
[8] All the elements of client autonomy, including the client's absolute right to discharge a
lawyer and transfer the representation to another, survive the sale of the practice.
[9] The sale may not be financed by increases in fees charged the clients of the practice.
Existing agreements between the seller and the client as to fees and the scope of the work must be
honored by the purchaser, unless the client consents after consultation.
[10] Lawyers participating in the sale of a law practice are subject to the ethical standards
applicable to involving another lawyer in the representation of a client. These include, for example,
the seller's obligation to exercise competence in identifying a purchaser qualified to assume the
practice and the purchaser's obligation to undertake the representation competently (see Rule 1.1);
the obligation to avoid disqualifying conflicts, and to secure client consent after consultation for
those conflicts which can be agreed to (see Rule 1.7); and the obligation to protect information
relating to the representation (see Rules 1.6 and 1.9).
[11] If approval of the substitution of the purchasing attorney for the selling attorney is
required by the rules of any tribunal in which a matter is pending, such approval must be obtained
before the matter can be included in the sale (see Rule 1.16).
[12] This Rule applies to the sale of a law practice by representatives of a deceased, disabled
or disappeared lawyer. Thus, the seller may be represented by a non-lawyer representative not
subject to these Rules. Since, however, no lawyer may participate in a sale of a law practice which
does not conform to the requirements of this Rule, the representatives of the seller as well as the
purchasing lawyer can be expected to see to it that the requirements are met.
[13] Admission to or retirement from a law partnership or professional association,
retirement plans and similar arrangements, and a sale of tangible assets of a law practice, do not
constitute a sale or purchase governed by this Rule.
[14] This Rule does not apply to the transfers of legal representation between lawyers when
such transfers are unrelated to the sale of a practice.
See Rule 1.0(b)
“Consultation”See Rule 1.0(c)
“Law Firm”See Rule 1.0(d)
Proposed Rule 1.17 is identical to ABA Model Rule 1.17 except for the following
modifications:
Paragraph (b): Paragraph (b) includes an additional requirement that the seller provide the
buyer with written notice of the seller’s fee agreements and any other agreements with respect to the
representation of each of the seller’s clients. The Committee believes that the purchasing lawyer
must have this information in order to comply with paragraph (e).
Paragraph (c): The Model Rule presumes consent of the client to the sale of the practice if
the client does not take action or otherwise object within 90 days after notice of the proposed sale.
Paragraph (d): Unlike Paragraph (d) of the Model Rule, the Proposed Rule does not permit
the purchasing lawyer to condition his or her representation of the selling lawyer’s clients upon a
change in the fee or expense arrangements as were agreed to by the client and the selling lawyer.
The Proposed Rule, however, does permit the purchasing lawyer to request such a change and to
implement the change if the client consents after consultation. We have also required the
purchasing lawyer to honor any other agreements with respect to the representation if the lawyer
had notice of them prior to the transfer of the representation.
Made
CHAPTER 2
THE LAWYER AS COUNSELOR, INTERMEDIATOR
INTERMEDIARY,
AND DISPUTE RESOLUTION NEUTRAL
ADVISOR
candid advice. In rendering advice, a lawyer may refer not only to law but to other considerations
such as moral, economic, social and political factors, that may be relevant to the client's situation.
[1] A client is entitled to straightforward advice expressing the lawyer's honest assessment.
Legal advice often involves unpleasant facts and alternatives that a client may be disinclined to
confront. In presenting advice, a lawyer endeavors to sustain the client's morale and may put advice
in as acceptable a form as honesty permits. However, a lawyer should not be deterred from giving
candid advice by the prospect that the advice will be unpalatable to the client.
[2] Advice couched in narrowly legal terms may be of little value to a client, especially where
practical considerations, such as cost or effects on other people, are predominant. Purely technical
legal advice, therefore, can sometimes be inadequate. It is proper for a lawyer to refer to relevant
moral and ethical considerations in giving advice. Although a lawyer is not a moral advisor as such,
moral and ethical considerations impinge upon most legal questions and may decisively influence
how the law will be applied.
[3] A client may expressly or impliedly ask the lawyer for purely technical advice. When
such a request is made by a client experienced in legal matters, the lawyer may accept it at face
value. When such a request is made by a client inexperienced in legal matters, however, the lawyer's
responsibility as advisor may include indicating that more may be involved than strictly legal
considerations.
[4] Matters that go beyond strictly legal questions may also be in the domain of another
profession. Family matters can involve problems within the professional competence of psychiatry,
clinical psychology or social work; business matters can involve problems within the competence of
the accounting profession or of financial specialists. Where consultation with a professional in
another field is itself something a competent lawyer would recommend, the lawyer should make
such a recommendation. At the same time, a lawyer's advice at its best often consists of
recommending a course of action in the face of conflicting recommendations of experts.
[5] In general, a lawyer is not expected to give advice until asked by the client. However,
when a lawyer knows that a client proposes a course of action that is likely to result in substantial
adverse legal consequences to the client, duty to the client under Rule 1.4 may require that the
lawyer act if the client's course of action is related to the representation. A lawyer ordinarily has no
duty to initiate investigation of a client's affairs or to give advice that the client has indicated is
unwanted, but a lawyer may initiate advice to a client when doing so appears to be in the client's
interest.