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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

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Ohio Legal Ethics Narrative

v. law firms and associations

5.6 RULE 5.6 RESTRICTIONS ON RIGHT TO PRACTICE

The material in these introductory paragraphs is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 2.167 (1996).

Restrictions on practice in general: As a matter of both individual lawyer autonomy and client freedom to select counsel of choice, lawyers should be able to accept employment from any prospective client, as long as the employment is consistent with the lawyer's ethical responsibilities. At times, however, other people have a real incentive to restrict the clients a lawyer might serve. If a lawyer ends a professional association with other lawyers, for example, the other lawyers might want to limit the defecting lawyer's ability to compete for business. In negotiating a contested matter, those on the other side of the dispute might be willing to settle a controversy in exchange for the lawyer's agreement not to handle such matters in the future. In both of these situations, Ohio Rule 5.6 treats lawyer autonomy and client-freedom interests as paramount. See Ohio Rule 5.6 cmt. [1]. See also Bd. of Comm'rs on Grievances & Discipline Op. 91-3, 1991 Ohio Griev. Discip. LEXIS 27 (Feb. 8, 1991) (recognizing these as the primary policies underlying OH DR 2-108, the Code predecessor to Rule 5.6). To protect those interests, agreements such as these are prohibited. See sections 5.6:200-:300 below.

It is important to recognize that Rule 5.6 addresses only practice restrictions arising from employment termination or the settlement of a claim or controversy. Restrictions that might apply during a particular professional relationship, such as a decision by a firm with which a lawyer is affiliated not to take cases in a particular area that the lawyer might otherwise wish to pursue, are not prohibited. See, under the former OHCPR, Bd. of Comm'rs on Grievances & Discipline Op. 89-004, 1989 Ohio Griev. Discip. LEXIS 11 (Feb. 17, 1989).

5.6:100 Comparative Analysis of Ohio Rule

  • Primary Ohio References: Ohio Rule 5.6
  • Background References: ABA Model Rule 5.6

5.6:101 Model Rule Comparison

Ohio Rule 5.6 is substantively identical to the Model Rule, with the exception of the substitution of "claim or" for "client" in division (b).

5.6:102 Ohio Code Comparison

The following section of the Ohio Code of Professional Responsibility is listed in the Correlation Table (Appendix A to the Rules) as related to Ohio Rule 5.6(a): DR 2-108(A).

The following section of the Ohio Code of Professional Responsibility is listed in the Correlation Table (Appendix A to the Rules) as related to Ohio Rule 5.6(b): DR 2-108(B).

5.6:200 Restrictions on Lawyers Leaving a Firm

  • Primary Ohio References: Ohio Rule 5.6(a)
  • Background References: ABA Model Rule 5.6(a)
  • Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 2.168
  • Commentary: ABA/BNA § 51:1201, ALI-LGL § 13(1), Wolfram § 16.2.3

The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 2.168 (1996).

Ohio Rule 5.6(a) prohibits a lawyer from "participating in offering or making . . . a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits on retirement."

An agreement imposing practice restrictions on lawyers leaving a firm "not only limits their professional autonomy but also limits the freedom of clients to choose a lawyer." Rule 5.6 cmt. [1]. Other than the retirement exception and those contained in Comment [3] (restrictions that may be included in terms of sale of law practice under Rule 1.17), the Rule places an absolute prohibition on agreements restricting practice, and presumably is not subject to waiver by the participants.

The Rule is specifically focused on restrictions on the right to practice law; thus, a non-competition clause clearly would be barred. See, under the analogous OHCPR provision, Bd. of Comm'rs on Grievances & Discipline Op. 90-14, 1990 Ohio Griev. Discip. LEXIS 21 (Aug. 17, 1990); Cleveland Bar Ass'n Op. 97 (Sept. 5, 1993); cf. Bd of Comm'rs on Grievances & Discipline Op. 91-3, 1991 Ohio Griev. Discip. LEXIS 27 (Feb. 8, 1991) (recognizing that restrictive covenants placing limits on practice in particular geographic area had long been recognized as impermissible). Indirect restrictions were prohibited as well. In a 1991 opinion, for example, the Board found that an employment agreement that required departing associates to pay the firm a percentage of the fees earned from former firm clients who chose to become clients of the departing lawyer violated former OH DR 2-108. While not an explicit limitation on practice, that was its "practical effect." Op. 91-3, 1991 Ohio Griev. Discip. LEXIS 27, at *4 (practice also constituted improper division of fees in violation of former OH DR 2-107).

A related concern is the extent to which a lawyer who ends an employment relationship with other lawyers can pursue the former firm's clients. See section 7.3:220. See generally Robert W. Hillman, Hillman on Lawyer Mobility: The Law and Ethics of Partner Withdrawals and Law Firm Breakups (2d ed. 1998 & Supp. 2007) (providing an in-depth analysis of the conflicting nationwide case law on the numerous issues that arise in this context). On the one hand, any restriction on this practice would seem like a limitation on the lawyer's right to practice law. On the other, in some circumstances such conduct might be seen as tortious interference with a business relationship or breach of fiduciary duty owed the firm. See Madorsky v. Bernstein, 89 Ohio App.3d 550, 626 N.E.2d 694 (Cuyahoga 1993) (recognizing that claim for tortious interference with business relationship could apply to activities that undercut an attorney-client relationship). One court of appeals held that, to the extent the departing lawyer contacted firm clients that he or she personally had been representing, the conduct was permissible, Sonkin & Melena Co., L.P.A. v. Zaransky, 83 Ohio App.3d 169, 614 N.E.2d 807 (Cuyahoga 1992) (rejecting tortious-interference claim in such situation), but doubt is cast on this determination by the Ohio Supreme Court's subsequent decision in the Fred Siegel case, discussed in the next paragraph. Use of a firm's client list to identify those to contact might constitute conversion of a trade secret. Sonkin supra (rejecting such claim because facts did not establish client list as trade secret).

The latest word from the Supreme Court on these issues is found in Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171, 707 N.E.2d 853 (1999). With respect to the misappropriation-of-
trade-secrets aspect, the Court held that the court of appeals correctly reversed a summary judgment for the defendant attorneys (a migrating lawyer and her new firm) on plaintiff's claim; there were genuine issues of material fact as to (1) whether plaintiff had adequately protected its client list for the list to qualify as a trade secret and (2) whether defendants had created their own list or had simply used plaintiff's list. With respect to the tortious-interference-with-contract aspect, the Siegel Court likewise affirmed the court of appeals' reversal of summary judgment for the defendants, where the lawyer sent mailings to her former firm's clients, for whom she had worked, inviting them to become her clients at her new firm. The Court held that the disciplinary rules (former OH DR 2-102(A)(2); OH DR 2-110(A)(2)) relied on by the migrating lawyer did not protect her conduct and concluded that there was a genuine issue of fact as to whether, in the language of 4 Restatement (Second) of the Law of Torts § 768 (1979), she and her new firm had employed "wrongful means" (i.e., utilization of protected trade secrets), thereby precluding summary judgment in their favor on the tortious-interference claim. Siegel is further discussed at sections 1.1:390 and 7.3:220.

For a discussion and explanation of the "retirement benefit" exception under MR 5.6(a) (identical in this respect to Ohio Rule 5.6(A)), see ABA Formal Op. 06-444 (Sept. 13, 2006), which opines, among other things, that a firm could consistent with 5.6(a) "properly require that the lawyer receiving bona fide 'retirement benefits' cease the practice of law permanently."  Id. at 5.

5.6:300 Settlements Restricting a Lawyer's Future Practice

  • Primary Ohio References: Ohio Rule 5.6(b)
  • Background References: ABA Model Rule 5.6(b)
  • Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 2.169
  • Commentary: ABA/BNA § 51:1209, ALI-LGL § 13(2)

The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 2.169 (1996).

Particularly in litigation, institutional litigants facing numerous suits over a particular type of conduct, such as suits against a car manufacturer for a specific design defect, might be tempted to induce certain opposition lawyers not to participate in future cases because those lawyers are too talented or have acquired too much expertise on the particular issues at hand through past representations. To accomplish this, the institutional litigant might offer to settle the case on terms favorable to its opponent in exchange for an agreement that the opponent's lawyer handle no more such cases against it. Arrangements such as these are prohibited by Rule 5.6(b). Such practice also creates a potential personal conflict of interest for the lawyer--the duty to reach the best result for this client conflicts with the lawyer's desire to remain free to secure future employment. See ABA, Annotated Model Rules of Professional Conduct 476 (6th ed. 2007) (commentary) (quoting ABA Formal Ethics Op. 93-371 (1993)).

Note, however, that division (b) of the Ohio Rule is not limited to litigation settlements; nor is it limited to settlement on behalf of a client: Any such agreement restricting a lawyer's right to practice contained in settlement of any "claim or controversy" is barred. See ABA Model Rule Comparison to Rule 5.6. For a trenchant analysis and criticism of this seemingly innocuous change from the Model Rule template (MR 5.6(b) prohibits restrictions on practice as part of the settlement of "a client controversy"), see Philip Oliss, Settlement Agreements That Restrict a Lawyer's Right to Practice, Clev. B.J., June 2006, at 22.