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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.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.

Kentucky Legal Ethics

1.17   Rule 1.17 Sale of Law Practice

1.17:100  Comparative Analysis of Kentucky Rule

1.17:101   Model Rule Comparison

Kentucky has no rule corresponding to MR 1.17.

1.17:102   Model Code Comparison

Kentucky has no rule corresponding to MR 1.17.

1.17:200  Traditional Rule Against the Sale of a Law Practice

According to the Annotation to ABA Model Rule 1.17, prior to the ABA adoption of Rule 1.17, it was generally considered unethical to sell a law practice. It was said to violate rules against disclosing confidences, against compensating someone for providing legal business, and against sharing fees with nonlawyers.  Traditional concerns also included fears that such transactions made the practice of law appear to be more of a business than a profession, and that they may operate to foreclose or restrict the right of clients to select a lawyer of their own choosing.

KBA E-324 (1987) asserts that an attorney who is retiring from practice may not sell the right to his or her clientele or the goodwill of his practice to a lawyer with whom he is not associated at the time of the sale. That opinion cites KBA E-319 (1987), which states that a firm may not add to its letterhead the name of a retired or disabled lawyer who has never practiced with the firm, and KBA E-83 (1974), which articulates that, "It is entirely proper for the professional colleagues of a deceased lawyer, and with the approval of the widow or personal representatives to take such steps as are necessary to protect the immediate interests of the clients, to advise such clients that they are doing so, making it clear to the clients that the papers of the latter will be turned over to any other attorney whom the client may desire to designate." Nevertheless, KBA E-324 holds that neither opinion authorizes the sale of the business and goodwill of a law practice. A retiring lawyer may sell, dispose of, or lease the physical assets of his law practice, but he or she may not sell the right to a clientele or the goodwill of his or her practice.  The transfer of client files presupposes that the informed consent of each client has been obtained. A purported sale of clients would run afoul of the rules against fee-splitting and self-recommendation.

KBA E-405 (1998), revisiting the question of a sole practitioner who dies without partners or other persons with similar rights and powers in his firm, reaffirms the assertions of KBA E-83.  The opinion suggests that sole practitioners prepare a future plan providing for the maintenance and protection of client interests in the event of the lawyer&'s death, including a designation of another lawyer who would have the authority to review client files and make determinations as to which files need immediate attention and who would notify the clients of their lawyer&'s death.  Absent such a plan, any lawyers left behind who had no proprietary interest in the firm are encouraged to protect the interests of all of the sole practioner&'s clients, with the cooperation and support of a personal representative of the deceased lawyer. The formerly employed lawyers continue to have the limited obligations set forth in the KRPC, including Rules 1.1, 1.3, 1.4, and 1.15, to notify clients for whom they have been providing services and to move to withdraw from representation if necessary. Those clients may choose to employ the lawyer contacting them without the lawyer running afoul of prohibited solicitation laws. In matters where there exists no attorney-client relationship between the associated lawyers and the client, the associated lawyers have no obligation to the clients or the estate of the responsible attorney to provide continuing professional services.

1.17:300  Problems in Sale of Practice

[See Traditional Rule Against the Sale of a Law Practice, supra, 1.17:200.]