Regulation of the Legal Profession · 6-12% of the exam
3.3.1Restrictions on the right to practice (Rule 5.6)
Agreements restricting a lawyer's future practice are barred whether they appear in employment contracts or settlement terms.
Why
Whom a client hires is the client's choice, and a departing lawyer's future clients are not a bargaining chip for the firm being left or for the other side of a settlement. A deal that trades away whom a lawyer may represent later spends something the parties do not own: the public's access to counsel.
Plain English
A partnership, shareholders, operating, employment, or other similar type of agreement may not restrict a lawyer's right to practice after the relationship ends, with conditions on retirement benefits excepted, and a settlement may not be conditioned on such a restriction. Restrictions included in the terms of a practice sale under Rule 1.17 sit outside the rule, as Comment [3] provides. The lawyer who proposes the restriction and the lawyer who accepts it are both subject to discipline.
Rule 5.6 — Restrictions on the Right to Practice
- No partnership, shareholders, operating, employment, or other similar type of agreement may restrict a lawyer's right to practice after departure (retirement-benefit conditions excepted)
- No settlement may be conditioned on a restriction of the lawyer's right to practice
- Comment [3]: restrictions included in the terms of a practice sale under Rule 1.17 are outside the rule
- Both the lawyer who proposes and the lawyer who accepts such a restriction are subject to discipline
Example 1
Ex. 1
Jonas represents a manufacturer sued over one product line. He offers to settle on one condition: Karim, the plaintiff's lawyer, must agree never to take another case against the manufacturer. Karim wants the settlement for his client and signs. A settlement may not be conditioned on a restriction of a lawyer's right to practice, and this one is. The rule reaches both of them — Jonas proposed the restriction, Karim accepted it, and the lawyer who accepts is subject to discipline alongside the lawyer who inserts. Strip the settlement away from the promise and ask only what the promise stops Karim from doing next year.
The accepting attorney is equally disciplinable, not just the firm that inserted the restriction.
Questions · 1
Q 01ch03-e08
Question 1 of 1 · Rule 5.6(b)
Beta represents a homeowner in a nuisance suit against a regional water utility, and the case is set for mediation. Alpha, who defends the utility, offers a settlement well above what the homeowner expected, on one written condition: Beta must agree never to accept another matter against the utility. Beta believes the money is an excellent outcome for the homeowner and worries that refusing the term will cost the client the deal. Beta explains the condition to the homeowner, who tells Beta to take the money. Beta signs the agreement containing the promise. Was it proper for Beta to accept that condition?
Keys 1 to 4 choose.