Opinion 202504

Advisory Opinion:202504
Year Issued: 2025
RPC: 5.6
Subject: Fee Division Contracts with Departing Lawyers
Summary: This opinion discusses the potential application of Washington RPC 5.6(a) to
agreements between a law firm and a lawyer that require payments by a departing lawyer to the
firm when the departing lawyer takes along one or more client matters on which the departing
lawyer had begun to work while at the firm. As explained below, the answer is difficult because
of by the significant differences among other jurisdictions regarding how to approach such
issues and because of the lack of definitive Washington State authority. At present, the only
pertinent Washington authority is an unpublished Washington Court of Appeals opinion which
does not address all the relevant questions. Nevertheless, one can reasonably conclude that
while Washington RPC 5.6(a) may not prevent all such agreements, the required division of fees
between the firm and the departing lawyer should bear a reasonable relationship to the law
firm’s financial investment in the departing client matters and the amount of work that has been
or remains to be done on those client matters.
QUESTIONS:
Lawyer L works at a law firm (the “Firm”). Both L and the Firm have read Seattle Truck Law,
PLLC v. Banks, 28 Wn.App.2d 1044 (Div. 1, 2023) (unpublished), rev. den., 2 Wn.3d 1035
(2024). L and the Firm either have signed or propose to sign an agreement which provides that if
L leaves the Firm and continues to work on one or more client matters on which L had begun at
the Firm, L must compensate the Firm by paying the Firm a stated amount or percentage of fees
received by L for work on that client matter in subsequent years.
1. Is such an agreement consistent with RPC 5.6(a)?
2. If such an agreement is not consistent with RPC 5.6(a), is it nonetheless enforceable as a
matter of contract law?
BRIEF ANSWERS:
1. There is presently no definitive Washington authority on the relevant issues pertaining to
RPC 5.6(a), and the decisions reached in other jurisdictions are inconsistent. The answer
thus depends primarily on how the Washington courts might interpret RPC 5.6(a) in the
future. The answer may also depend on the facts and circumstances giving rise to the
agreement between a lawyer and the lawyer’s firm, and the potential effects of that
agreement. In our opinion, and absent definitive Washington State authority, an
agreement which appears to be punitive towards the departing lawyer and does more than
provide reasonable compensation to the Firm for its past efforts, is unlikely to be
consistent with RPC 5.6(a).
2. If the agreement does violate RPC 5.6(a), the question of its enforceability as a matter of
contract law will depend, among other things, on whether, considering the RPC violation,
the resulting contract violates the underlying public policy of the rule. See, e.g., LK
Operating, LLC v. Collection Grp., LLC, 181 Wn.2d 48, 85 (2014) (business transaction
entered into with client in violation of RPC 1.8(a) rendered contract unenforceable
because contrary to public policy). The Committee focuses solely on interpretations of
the RPCs and does not issue opinions on other questions of law.
DISCUSSION:
Comment [1] to RPC 1.17 states: “Clients are not commodities that can be purchased and sold at
will.” In other words, a firm cannot prohibit a lawyer who chooses to leave a firm from
continuing to represent a client on any matters—even those on which the lawyer began work
before departing from the firm. [n.1] The question here is whether or to what extent the firm can
require payment to the firm by a departing lawyer who takes client matters with them. [n.2]
RPC 5.6 states in pertinent part:
A lawyer shall not participate in offering or making:
(a) a partnership, shareholders, operating, employment, or other
similar type of agreement that restricts the rights of a lawyer or an
LLLT to practice after termination of the relationship, except an
agreement concerning benefits upon retirement ….
.
Comment [1] to RPC 5.6 states:
An agreement restricting the right of lawyers to practice after leaving a firm not only
limits their professional autonomy but also limits the freedom of clients to choose a
lawyer. Paragraph (a) prohibits such agreements except for restrictions incident to
provisions concerning retirement benefits for service with the firm. [n.3]
Washington RPC 5.6(a) is identical to ABA Model Rule 5.6(a). All courts that have interpreted
Model Rule 5.6(a) have held that it prohibits every type of noncompete agreements apart from
retirement and sale-of-practice agreements. However, courts have taken two distinct approaches
on when and to what extent firms may impose economic consequences or financial disincentives
on departing lawyers who take one or more client matters with them.
One approach has its origins in Cohen v. Lord, Day & Lord, 75 N.Y 2d 95, 550 N.E. 2d 410
(1989). See also ABA Formal Op. 489 (2019), 06-444 (2006), 94-381 (1994). Under Cohen and
its progeny, all adverse economic consequences or financial disincentives against lawyers who
leave firms with client matters are prohibited. [n.4]
The other approach has its origins in Howard v. Babcock, 18 Cal. App. 4th 107, 7 Cal. Rptr. 2d
687 (1992). That court held that it would enforce what it described as a reasonable economic toll
on competition when a lawyer changes firms. The court analogized such provisions to
permissible liquidated damage provisions and noted that both can be upheld if reasonable under
the circumstances. [n.5]
The only appellate decision in Washington that addresses this subject is Seattle Truck Law,
PLLC v. Banks, 28 Wn.App.2d 1044 (Div. 1, 2023) (rev. den., 2 Wn.3d 1035 (2024))
(unpublished). In Seattle Truck Law, a lawyer signed an employment agreement with a law firm,
providing that if lawyer separated from firm taking contingent fee matters: (1) the lawyer would
repay the firm for all costs and expenses owed to the firm within three months of the lawyer’s
departure; (2) the lawyer would remit 50% of attorney fees received on those files for the first
year after the lawyer left; and (3) the lawyer would remit 40% of attorney fees received the
second year and thereafter.
In Seattle Truck Law, Division One of the Court of Appeals cited several cases, including Cohen;
but it rejected the Cohen approach and relied instead on cases including Groen, Barna, and
Warner, 827 A.2d 1163 (2003), a case that falls in the Howard v. Babcock line of analysis. The
Seattle Truck Law court held that on the record before it, the agreement did not place a restraint
on the departing lawyer’s ability to practice law under RPC 5.6. The court reasoned that the law
firm had economic rights in the files which the firm was entitled to enforce, and that the claim
for fees did not place a geographic restraint on the departing lawyer’s ability to practice law. The
court also found that the agreement did not restrain the departing lawyer’s ability to compete
with the prior law firm because it allowed the lawyer to keep a higher percentage of fees earned
on a case than the lawyer would have received if the lawyer had stayed at the firm.
The unpublished Washington Court of Appeals decision in Seattle Truck Law, and the
subsequent denial of review by the Washington Supreme Court, do not commit Washington to
either the Cohen (New York) camp or the Howard v. Babcock (California) camp. If presented
with these facts, other Washington courts might choose a different approach. If the Supreme
Court chooses in the future to adopt the full Cohen approach, then the Seattle Truck Law
decision could not stand. If other Washington courts were to reject that approach and instead
adopts one more like Howard v. Babcock in following Groen, a further analysis would be
required before any statements of a general nature about the application of RPC 5.6(a) to such
agreements in Washington can be made.
As Seattle Truck Law, Groen, and many other cases adopting the Howard v. Babcock approach
make clear, the application of RPC 5.6(a) depends not only on the amounts or percentages of any
payments the departing lawyer may be called upon to make, but also upon the particular
circumstances in which the agreement between the firm and the departing lawyer were made and
the actual or theoretical effects of imposing the terms in the agreement on the departing lawyer
and the relevant clients. Solely by way of example, a court might consider questions including
but not limited to:
? Whether the agreement made by the firm was with an experienced lawyer or a relatively
new lawyer who signed something akin to a contract of adhesion imposed by the firm.
? Whether the firm can document that the amount it seeks reflects its actual investment in
cases or its likely actual loss from the departure of those cases.
? Whether enforcement of the agreement as written would be likely to place the departing
lawyer at a disadvantage in serving client needs.
? Whether the client matters that the lawyer is taking are contingent fee matters rather than
hourly matters, since such agreements are far less likely, if ever, to be upheld in hourly
fee situations.
In other words, the specific percentage amounts upheld in Seattle Truck Law might or might not
be upheld in other situations or based on a different record.
The second question asked at the outset is whether, assuming that a particular agreement violates
RPC 5.6(a), it might be enforceable between the departing lawyer and the firm as a matter of
contract law. The Seattle Truck Law court did not rule on this issue in that case, but observed that
under LK Operating, LLC v. Collection Grp., LLC, 181 Wn.2d 48, 85 (2014), the answer to this
question would depend on whether the agreement in question is injurious to the public. Although
we believe it likely that the Washington Supreme Court would decline to enforce an agreement it
found violative of RPC 5.6(a), that is a question which could also turn on the specific facts and
circumstances before the court.
Endnotes
1. On contingent fee matters, the firm may have a post-departure quantum meruit claim
against departing clients. See Ross v. Scannell, 97 Wash.2d 598, 647 P.2d 1004 (1982);
Belli v. Shaw, 98 Wn.2d 569, 657 P.2d 315 (1983). This Advisory Opinion does not
address such claims and is limited to agreements that a firm may reach with a departing
lawyer about claims between them.
2. RPC 1.5(e), which generally addresses fee divisions between lawyers who are not in the
same firm, states in pertinent part:
A division of a fee between lawyers who are not in the same firm may be made
only if:
(i) the division is in proportion to the services provided by each lawyer, or each
lawyer assumes joint responsibility for the representation;
(ii) the client agrees to the arrangement, including the share each lawyer will
receive, and the agreement is confirmed in writing; and
(iii) the total fee is reasonable . . . .
Comment [8] to RPC 1.5 states: “Paragraph (e) does not prohibit or regulate division of
fees to be received in the future for work done when lawyers were previously associated
in a law firm.” Consequently, RPC 1.5(e) does not apply to the division of fees between
a departing lawyer and the former law firm, and any such division of fees need not be
disclosed to relevant clients unless the division would prohibit the lawyer continuing with
the matter to provide competent and diligent representation to a client.
3. Comment [1] to RPC 5.6, with respect to the freedom of clients to choose a lawyer, is
also applicable to the sale of a law practice under RPC 1.17.
4. As stated in note 1, a firm is not prohibited from pursuing a quantum meruit claim for
pre-departure work performed on a contingent fee matter. The question here is whether or
to what extent a firm can demand more than that from a departing lawyer.
5. A detailed discussion of both approaches is contained in Geoffrey C. Hazard, Jr., W.
William Hodes, Peter R. Jarvis & Trisha T. Hedges, The Law of Lawyering §§50.03-.04
(Fourth Ed. 2024 Supp).