Tom Shumate's Tennessee Non-Compete Law Blog

When Will Law Firms Learn...

The Buffalo News reports that the New York Supreme Court voided clauses in a law firm's employment contract forbidding a departing attorney from notifying firm clients of his departure and setting a 43.56% lien on any future work done for former firm clients by the departing attorney. The Court held that the restrictions violated the ethics rules for attorneys. I believe that Tennessee courts would rule the same way. Clients should have the ability to retain counsel of their choosing and should not be prevented from following their attorney when he leaves a firm. Most law firms know this, but they continue to include such restrictions in firm employment agreements to dissuade departing attorneys from taking clients with them. Apparently the risk of having some clauses held to be unenforceble (or even unethical) is outweighed by the risk of losing firm clients. You can read the article here.

Nashville, Tennessee Non-Compete Lawyer -- Attorney Non-Compete Agreement Held Unenforceable Under Tennessee Model Rules of Professional Conduct

In Spiegel v. Thomas, Mann, & Smith, P.C., 811 S.W.2d 528, 530 (Tenn.1991), the Tennessee Supreme Court held that restraints which infringe on a lawyer's responsibility to “assist the legal profession in fulfilling its duty to make legal counsel available” are against public policy.  Id. at 530.  The Court based its holding on DR 2-108 of the now defunct Code of Professional Responsibility. Over 17 years have passed since that decision, so one would think that Tennessee law firms would know the law and would revise their partnership agreements accordingly.  Unfortunately, some firms still don't get it.  Lest their be any confusion regarding the viability of the Spiegel decision after the adoption of the Model Rules of Professional Conduct in 2003,the Tennessee Court of Appeals affirmed recently that attorney non-compete agreements are still against public policy pursuant to Rule 5.6 of the Model Rules of Professional Responsibility.  See, Arena v. Schulman, LeRoy & Bennett, 233 S.W.3d 809 (Tenn. App. 2006).