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Can You Solicit Former Clients Without Stealing Them?

Most lawyers wouldn't dream of flat-out "poaching" clients from their former firm. But, because the rules of ethics are fuzzy in this particular area, it can be hard to tell where the line is. In this article, we discuss some of the general rules on soliciting customers from a former employer and additional considerations for those in the legal industry.

General Rules on Soliciting Former Clients

When is it okay for a former employee to contact old customers? In most cases, it depends on what kind of efforts their former employer has taken to keep their customer lists confidential. Employers will also often include clauses in employment contracts to prevent someone from soliciting customers or clients if they leave.

However, the enforceability of non-solicitation and non-compete agreements is dicey at best. And many employers who view their customer lists as trade secrets haven't taken the steps required to protect them.

Non-Solicitation and Non-Competes

The approach to non-solicitation and non-competes varies across different states. Non-solicitation agreements are relatively common in sales or service businesses - especially in industries where companies compete for a limited number of customers.

In most states, non-solicitation agreements are enforceable if:

  • The employer has a valid business reason for having one
  • They don't make it too difficult for a former employee to earn a living in that line of work
  • They do not unfairly limit the ability of competitors to hire workers or attract customers

Courts also often require that the employer take steps to protect their customer list. If their customers' identity is available to the general public, a former employee can probably use that list when they leave.

California is the most restrictive state when it comes to these types of agreements. In 2008, the California Supreme Court held that even narrowly tailored non-compete agreements were invalid. Under the California Business & Professions Code, "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."

Non-solicitation agreements, on the other hand, are still enforceable in California. Since they are generally less restrictive than non-competes, California courts are more accepting of them.

Trade Secret Considerations

Even if an employer does not use a non-solicitation agreement, information about former clients might be protected under trade secret law. A client list is likely subject to trade secret protection if it:

  • Has independent economic value, derived from the fact that it's not widely known
  • Is not readily ascertainable
  • Is subject to reasonable efforts to maintain its secrecy

In the legal industry, client identities might be subject to a certain amount of secrecy. This, combined with the ethical rules on solicitation for lawyers, can make things even more complicated for an attorney.

General Solicitation Rules For Lawyers

In general, lawyers are prohibited from soliciting clients in person, on the phone, and through "real-time" electronic communication," unless the person they're talking to is:

  • A lawyer
  • A family member, close friend, or prior business associate
  • Someone who routinely uses similar legal services for their business

If a prospective client has made it known that they do not wish to discuss legal services, the attorney cannot solicit them.

However, seeking business from former clients can be a whole different ball game. What happens when a lawyer decides to leave for a different firm or hang up their shingle on their own?

When a Lawyer Changes Firms

No rule prevents a lawyer from discussing the possibility of continuing representation with their clients in the event they change firms. The key is to keep the decision with the client. The attorney cannot convince the client that they will be better off if they follow them to the new firm. First of all, that can run afoul of ethical rules. And second, it's just not classy.

However, Model Rule 1.4 requires attorneys to inform their clients of an upcoming move to a new firm. This conversation is an excellent opportunity to discuss how the client feels about following you to a new firm.

Practice tip: If you're thinking of (or planning to) change firms, ask clients how they feel about working with you and whether they would consider an ongoing relationship, should you change firms. Make it clear that it is their choice whether to do so.

Most importantly, lawyers should keep in mind that it is ultimately up to the client who represents them. Law firms and lawyers can't divide up clients however they please.

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