One of the largest law firms in New York City appears to be imploding. Dewey & LeBoeuf partners have been encouraged to look for work elsewhere, and law students have been told that they will not have summer associate jobs they had previously been offered. The end of a large firm is not unique, large firms fail and close with regularity. However, this particular failure may be the largest in history.
For purposes of our blog, the end of a law firm is not merely the subject of morbid fascination, but a point of discussion of potential pitfalls. As the 2009 failure of Wolf Block showed, failed law firms are subject to lawsuits from disgruntled former partners, as well as former clients and vendors. These disputes can take years to sort out.
The legal malpractice and ethical implications of a firm break-up are myriad. They include continuing duties to clients, potential conflicts as partners leave for new firms, and confidentiality and safe-keeping problems. Issues can arise out of client file and property transfer; statements to clients about the lawyers’ services; and neglect or abandonment of client files (many of these same issues arise anytime a lawyer leaves a firm). In order to avoid professional liability, ethics problems, and/or legal malpractice actions, a law firm break-up requires as much careful planning on all levels as a law firm start-up. Unfortunately, careful planning of break-ups does not always happen.–Josh J.T. Byrne, Esquire