When a lawyer is winding down a practice, what can and cannot be sold, and how must clients be handled when files move to another lawyer?

Plain-English summary

The committee set out several conclusions about selling a law firm under the former Code. It opined that it is not improper to sell the physical assets or leasehold of a law firm, but improper to sell the firm name (DR 2-101, DR 2-102; EC 2-5, 2-6, 2-13), and improper to sell the good will of a law firm (Canon 2).

On client files, the committee opined that it is proper for an attorney to give notice to clients that a new attorney is taking over the practice and to let clients designate whether their files will be turned over to that attorney (DR 2-108(D); EC 4-6). It is not proper merely to allow another attorney to retain closed files; proper communication should be made to the client, including recommendations based on the contents of a file and the subject matter of the representation, so the client can direct the disposition of the files. It is also not proper to associate someone with the firm for the purpose of transferring files without disclosure to clients (DR 1-102(A)(4), DR 2-102(A) and (B)). The committee added that it is proper to advise the Virginia State Bar of an attorney's change of address, but the bar cannot serve as a referral system. The committee note records that current Rule 1.17 permits the purchase or sale of a law firm's practice, including good will, under certain circumstances.

Currency note

This opinion was issued in 1987, under Virginia's former Code of Professional Responsibility (the disciplinary rules it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. The opinion's conclusion that selling good will is improper has been superseded: as the committee note records, current Rule 1.17 permits the sale of a law practice, including good will, under specified conditions. Subsequent rule amendments or later opinions may have changed the 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 Treat this page as historical context, not current guidance.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 a lawyer sell the firm's name or good will under the former Code?

A: Under this 1987 opinion, no. The committee opined that selling the firm name was improper and that selling good will was improper under Canon 2; current Rule 1.17 now permits sale of good will under conditions.

Q: How were client files supposed to be handled in a transfer?

A: The committee opined that clients had to be notified and allowed to direct disposition of their files, with the lawyer's recommendations based on each file's contents, rather than simply leaving files with another attorney.

Q: Could the lawyer move files to an associated attorney without telling clients?

A: No. The committee opined that associating someone to transfer files without disclosing it to clients was improper under DR 1-102(A)(4) and DR 2-102.

Background and rules framework

The opinion interpreted several former Virginia provisions: DR 2-101 and DR 2-102 (firm names and professional notices), Canon 2 and its Ethical Considerations on availability of legal services, DR 2-108(D) (disposition of client files on termination), and DR 1-102(A)(4) (conduct involving dishonesty or misrepresentation). The committee note maps the sale question onto current Virginia Rule 1.17, the counterpart of ABA Model Rule 1.17 on sale of a law practice.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 2-101, DR 2-102 (firm names and professional notices)
• Former Virginia Canon 2; EC 2-5, 2-6, 2-13 (availability of legal services)
• Former Virginia DR 2-108(D); EC 4-6 (disposition of client files)
• Former Virginia DR 1-102(A)(4) (dishonesty or misrepresentation)
• Virginia Rule 1.17 / ABA Model Rule 1.17 (sale of a law practice)

See also

• VA LEO 1234: Sale of a Collection Practice, Physical Assets Not Good Will
• VA LEO 1357: Refusing a Client Access to the Contents of a File
• VA LEO 1101: Attorney Retaining Lien on a Client File

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/0956.pdf

Original opinion text

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

Committee Opinion
August 21, 1987
LEGAL ETHICS OPINION 956

LAW FIRM – SALE.

It is not improper to sell the physical assets or leasehold of a law firm. It is improper to
sell the firm name. [DR:2-101, DR:2-102; EC:2-5, EC:2-6, EC:2-13]
It is improper to sell the good will of a law firm. [Canon 2]
It is proper for an attorney to give notice to clients that a new attorney is taking over the
law practice and to allow the clients to designate whether their files will be turned over to
that attorney. [DR:2-108(D); EC:4-6]
It is not proper to merely allow another attorney to retain the closed files. Proper
communication should be made to the client, including recommendations based upon the
contents of a file and the subject matter of the representation, so that the client may
properly direct the disposition of the files. [DR:2-108(D); EC:4-6]
It is not proper for an attorney to associate someone with his law firm for the purpose of
transferring files without making disclosure to the clients. [DR:1-102(A)(4), DR:2102(A) and (B)]
It is proper to advise the Virginia State Bar of an attorney's change of address; however,
the bar cannot serve as a referral system.
Committee Opinion
August 21, 1987
Legal Ethics Committee Notes. – Rule 1.17 permits the purchase or sale of a law
firm’s practice, including good will, under certain circumstances.