When one attorney buys another's law practice, may the buyer purchase the client files and pending cases as accounts receivable and keep the seller's name on the letterhead?

Plain-English summary

The committee addressed attorney "A" proposing to purchase the law practice of attorney "B." It concluded that "B" should contact all present clients and advise them of the termination of "B's" practice, and that the clients should be given the opportunity to retain "A" or other counsel.

The committee further concluded it is improper for "A" to purchase the client files or pending litigation as "accounts receivable," or to retain "B's" name on the office letterhead, citing DR 2-103(D), DR 2-108(D), DR 4-101(B)(1) and (3), DR 4-101(C)(1), and EC 4-6.

Currency note

This opinion was issued in 1979, under Virginia's former Code of Professional Responsibility, before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. The committee note states that Rule 1.17 now permits the purchase or sale of a law firm's practice, including good will, under certain circumstances, which changes the former Code's analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could the buyer treat client files and pending cases as accounts receivable?

A: Under this 1979 opinion, no. The committee found it improper to purchase client files or pending litigation as "accounts receivable."

Q: Could the buyer keep the seller's name on the letterhead?

A: No. The committee found retaining the seller's name on the office letterhead improper.

Q: What did the selling attorney have to do with the clients?

A: Contact all present clients, advise them the practice was terminating, and give them the opportunity to retain the buyer or other counsel.

Background and rules framework

The opinion applied the former Code's solicitation, withdrawal, confidentiality, and letterhead provisions (DR 2-103(D), DR 2-108(D), DR 4-101(B) and (C), EC 4-6) to a sale of a law practice. The committee note records that current Virginia Rule 1.17 now permits the purchase or sale of a practice, including good will, under certain conditions, corresponding to ABA Model Rule 1.17.

Citations and references

Rules of Professional Conduct:

• DR 2-103(D) (former Code)
• DR 2-108(D) (former Code)
• DR 4-101(B)(1) and (3), DR 4-101(C)(1) (confidences and secrets) (former Code)
• EC 4-6 (former Code)
• Virginia Rule 1.17 (sale of a law practice) (cited in the committee note)
• ABA Model Rule 1.17 (sale of law practice)

See also

• VA LEO 956: Sale of a Law Firm; Physical Assets Not Name or Goodwill
• VA LEO 1234: Sale of a Collection Practice on Assuming the Bench

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/0321.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

LEGAL ETHICS OPINION 321

PURCHASE OF LAW PRACTICE – LETTERHEAD.

An attorney “A” proposes to purchase the law practice of another attorney “B.” Under these circumstances, “B” should contact all present clients and advise them of the termination of “B's” practice. The clients should be afforded the opportunity to retain “A” or other counsel. It is improper for “A” to purchase client's files or pending litigation as “accounts receivable” or to retain “B's” name on the office letterhead. [See II: DR:2-103(D), DR:2-108(D), DR:4-101(B)(1) and (3), DR:4-101(C)(1), and EC:4-6.]

Committee Opinion
April 19, 1979

Legal Ethics Committee Notes. – Rule 1.17 permits the purchase or sale of a law firm’s practice, including good will, under certain circumstances.