The lawyer and the

“[Law] Firm”
Problem Areas in Legal Ethics
2018-2019
Choice of a Firm name
• Rule 3.02 of the Code of Professional
Responsibility which states that “in the
choice of a firm name, no false,
misleading or assumed name shall be
used.”

• No name not belonging to any of the

partners or associates may be used in the
firm name for any purpose. - PP v.
Gonzalez, Jr., G.R. No. 139542 June 10, 2003
Negligence of clerks in
a law firm
• Time and again the Court has admonished
law firms to adopt a system of
distributing pleadings and notices,
whereby lawyers working therein receive
 promptly notices and pleadings intended
for them, so that they will always be
informed of the status of their cases.
• Their Court has also often repeated that
the negligence of clerks which adversely
affect the cases handled by lawyers, is
binding upon the latter. - B.R. Sebastian
Enterprises, Inc. v. CA, G.R. No. L-41862
[1992]
Law firm represents the
client
• Respondent judge should not have
accommodated so many Motions for
Postponement filed by the then ailing Atty.
Rosendo Castillo Sr. because a law firm
(Castillo & Castillo), to which the latter
belonged, was really representing the
defendants, there certainly were other
competent lawyers who could have
handled the matter. – Sps. Reaport v. Judge
Mariano, A.M. No. MTJ-00-1253. July 11,
2001
Main and branch office
 constitute one
personality
• Petitioner's counsel was and is the firm of
Ledesma, Saludo and Associates (and not any
particular member or associate of that firm)
which firm happens to have a main office in
Makati and a branch office in Cebu City. The
Court notes that both the main and branch
offices operate under one and the same name,
Saludo Ledesma and Associates. Having
represented itself to the public as
comprising a single firm, LSA should not be
allowed at this point to pretend that its main
office and its branch office in effect
constitute separate law firms with separate
and distinct personalities and
responsibilities. Ouano Arrastre Service Inc. v.
Judge Aleonor, G.R. No. 97664 October 10, 1991
Death of a handling
lawyer of the firm
• Hence, the death of the latter did not
extinguish the lawyer-client relationship
between said firm and petitioner. - B.R.
Sebastian Enterprises, Inc. v. CA, G.R. No. L-
 41862 [1992]

Duties of Firms and Lawyers

When Someone Leaves
• A. Ethical Obligation to Communicate
to Certain
clients
• B. Trust Account Monies
• C. Fee Divisions In General
• D. Files
• E. Phones

• Partners and Associates Leaving Must

Abide By Fiduciary Duties to Firm
Ethical Obligation to
Communicate to Certain
Clients
1) lawyers have a duty to tell “their” clients
that they are leaving.
2) clients are not chattels – the firm and
departing lawyer cannot decide which
 clients can stay and which can go – the
clients decide.
Rule of confidentiality in
a law firm
• Rule 21.04 - A lawyer may disclose
the affairs of a client of the firm to
partners or associates thereof unless
prohibited by the client.
Duty to notify a client
• “The departing lawyer and responsible
members of the law firm who remain
have an ethical obligation to assure that
prompt notice is given to clients on
whose active matters she currently is
working.”

• Rule 18.04 - A lawyer shall keep the client

informed of the status of his case and
shall respond within a reasonable time
to the client's request for information.
Lawyer who has had
 “significant personal
contacts”
• A departing lawyer who has had
“significant personal contacts” with the
client, should inform the client that the
lawyer is leaving the firm.

• Note: this does not mean that an associate

who met a client once or twice and has
prepared discovery requests has had
“significant personal contacts” – the
standard is that if the client were asked
“which lawyer(s) at the firm represents
you?” the lawyers mentioned would be
those that have had“significant personal
contacts.”
Ethical obligations of
departing lawyers
• In addition to the ethical obligations
departing lawyers have, they also must
avoid interfering with the contracts the
firm has with existing clients.
• However, the caution to avoid stealing
clients must be balanced against the
departing lawyer’s ethical obligation to
notify clients that an attorney is
departing.
How to tell clients
• The preferred method of advising firm
clients about the impending departure
of an attorney is a joint letter from
the firm and departing lawyer to all
clients with whom the lawyer had
significant personal contacts.
A letter should advise
the clients
• When the lawyer is leaving
• The client has the option of going with the
lawyer, staying with the firm, or getting a
new firm
• How any advance fee deposit will be
treated
• A place for the client to sign and return the
letter, with instructions on where their file
 should go.
Separate letters may be sent by
the lawyer (or the firm) to clients
with whom the departing lawyer
had substantial personal contact
as long as:
• 1) the letters do not disparage the firm or
the lawyer; and
• 2) the letters do not involve improper
solicitation
Trust Account Monies
• Clients that have given the firm an
advance fee or advance cost deposit
take the money with them (less earned
fees and costs), if they go with the
departing lawyer. While simple in theory,
application sometimes can be problematic.
• The“old” firm should write a check,
consistent with the written instructions of
the client, to either the client or to the trust
account for the departed lawyer’s new
firm.
 Fee Divisions In General
• In contingent fee cases where some or
much of the work was performed at the
existing firm, but the case is going with the
departing lawyer, the firm and lawyer
must agree how the contingent fee will
be apportioned among them, based upon
their respective contributions to the case
(i.e., quantum meruit) or based upon
terms in the partnership agreement.
But can a departing lawyer keep
all of a contingent fee case that
came into
the old firm but ultimately
settled when the lawyer was at a
new firm?
• Probably not, according to several cases.
• A lawyer may be entitled to only his
partnership portion of the fees earned on a
case, even if he performed most of the
work after the dissolution of the firm.
• Nevertheless, some courts will find that
 when a lawyer leaves a firm and takes a
case with him, he may be entitled to the
quantum meruit value of the work he
performed.
Client’s interests not be
prejudiced when the
attorney/client relationship
is terminated
• Do not hold client files hostage, even if the
client that is leaving with the lawyer owes the
current firm money.
• Model Rule 1.16(d) requires that the client’s
interests not be prejudiced when the
attorney/client relationship is terminated.
Have the client or a runner from the departed
lawyer’s new firm sign for the file, if it is going
to the new firm.
• Also, it is appropriate to request in a litigation
matter that the departed lawyer file a
substitution of counsel or at least notification
of address change with the court, to assure that
the old firm is still not listed as counsel of
record.
Client’s file = paper and
 electronic documents
• When a client asks for their file, you must
give them both the paper and the
electronic documents – including emails.
• And remember that the client file is client
property, so you cannot charge the client
for the cost of downloading everything
to disks….
Phones
• It is ethically inappropriate to have the
receptionist tell callers who are looking for
a lawyer who recently left the firm “we
don’t know where he is.” That game is not
professional and not acceptable.
• Assure that all staff are instructed to
provide the departed lawyer’s phone
number and mailing address.
• Also, assign a partner to answer any client
inquiries.
• Moreover, mail should be forwarded to the
departed lawyer.
Partners and Associates
 Leaving Must Abide By
Fiduciary Duties to
Firm
• It is worth noting again that lawyers who
are leaving a firm have certain fiduciary
duties to the firm to not interfere with
the contracts that the firm has with
existing clients, to not use firm resources
to set up their new firm, and to not
attempt to steal away associates and
staff while the lawyers are still working
for the firm. - Lynda C. Shely
A lawyer whose spouse is
associated with a firm
representing an opposing
party
• [T]he lawyer should advise the client of all
circumstances that might cause one to
question the undivided loyalty of the law
firm and let the client make the decision as
to its employment. If the client prefers not
 to employ a law firm containing a lawyer
whose spouse is associated with a firm
representing an opposing party, that
decision should be respected.
WON the firm of “Velasquez,
Rodriguez, Respicio, Ramos,
Nidea, and Prado”may call itself
“A law Firm Of St. Thomas More
and Associate Members”.
• It implies that St. Thomas More is a Law Firm
when in fact it is not it would also convey to the
public the impression that the lawyers are
members of the law firm which does not exist.
To the public, it would seem that the purpose
or intention of adding “The Law Firm of St.
Thomas More and Associates Members” is to
bask in the name of a Saint, although that may
not really, be the purpose or intention of the
lawyers. The appellation only tends to confuse
the public and in a way demean both the saints
and the legal profession whose members must
depend on their own name and record and
merit and not on the name/glory of other
persons living or dead. - PP v. Gonzalez, Jr., G.R.
No. 139542 June 10, 2003
 Duties When Switching
Firms
• Duties of Lawyers Interviewing With
Other Firms
• Screening an “Infected” Lateral Hire
• Death of a Lawyer
Senior partner and
“command responsibility”
• On the other hand, Atty. Janus T. Jarder, a senior
partner of the law firm Jarder Bancolo and
Associates Law Office, failed to exercise certain
responsibilities over matters under the charge of
his law firm. As a senior partner[,] he failed to
abide to the principle of "command
responsibility".
• Respondent Atty. Janus Jarder after all is a
seasoned practitioner, having passed the bar in
1995 and practicing law up to the present. He
holds himself out to the public as a law firm
designated as Jarder Bancolo and Associates Law
Office. It behooves Atty. Janus T. Jarder to exert
 ordinary diligence to find out what is going on in
his law firm, to ensure that all lawyers in his firm
act in conformity to the Code of Professional
Responsibility. - Rodrigo E. Tapay and Anthony J. Rustia v.
Atty. Charlie L. Bancolo and Atty. Janus T. Jarder, A.C. No.
9604, March 20, 2013

Partner liable
• As a partner, it is his responsibility to
provide efficacious control of court
pleadings and other documents that
carry the name of the law firm. Had he
done that, he could have known the
unethical practice of his law partner Atty.
Charlie L. Bancolo. Respondent Atty.
Janus T. Jarder failed to perform this task
and is administratively liable under
Canon 1, Rule 1.01 of the Code of
Professional Responsibility. - Rodrigo E. Tapay
and Anthony J. Rustia v. Atty. Charlie L. Bancolo and Atty.
Janus T. Jarder, A.C. No. 9604, March 20, 2013

Negligence of the law

 firm
• As the Court observes, the law firm’s
unethical acceptance of the criminal
case arose from its failure to organize
and implement a system by which it
would have been able to keep track of all
cases assigned to its handling lawyers to
the end of, among others, ensuring that
every engagement it accepts stands clear
of any potential conflict of interest.
• As an organization of individual lawyers
which, albeit engaged as a collective,
assigns legal work to a corresponding
handling lawyer, it behooves the law
firm to value coordination in deference
to the conflict of interest rule.
All are equally liable
• As the Court sees it, all respondents
stand in equal fault for the law firm’s
deficient organization for which Rule
 15.03, Canon 15 and Canon 21 of the CPR
had been violated. As such, all of them
are meted with the same penalty of
reprimand, with a stern warning that a
repetition of the same or similar
infraction would be dealt with more
severely. – Anglo v. Attys. Jose Ma. V. Valencia,
et. al., A.C. No. 10567, February 25, 2015

Departing solicits a client of

the firm
• Where contingent fees are not an issue,
but the partner prior to departing
solicits a client of the firm, he or she
may have violated a fiduciary duty to
the firm even if the departing partner
brought the client into the firm and has
represented the client for years.-Joseph M.
Perillo,The Law of Lawyers' Contracts Is Different, 67
Fordham L. Rev. 443 (1998).

“Unfinished business”
 doctrine
• The “unfinished business” doctrine reflects
established partnership law. In the law firm
world, the unfinished business doctrine is
frequently referred to as the Jewel doctrine, or
then Jewel rule, after the seminal California case
on the subject, Jewel v. Boxer.
• Regardless of how it is described, the unfinished
business doctrine essentially holds that absent
contrary agreement, partners in a dissolved law
firm must account to the firm and its former
partners either for all fees generated from work
in progress at the time of the firm’s dissolution,
or for the profits made on that work (depending
on the state’s partnership law) in accordance
with their percentage interests in the firm.
Pending client matters are uncompleted
transactions that require winding up after
dissolution, and are therefore partnership assets
subject to post-dissolution distribution.

……
• Pending client matters are uncompleted
transactions that require winding up
after dissolution, and are therefore
 partnership assets subject to post-
dissolution distribution. As the court in
Gull v. Van Epps explained, “all partners
of the dissolved firm are generally
entitled to share in fees for pre-
dissolution work in progress earned
after dissolution, even if the client has
exercised [its] right to discharge the
attorney or attorneys who are sharing in
the fees.”
• This entitlement exists because
dissolution does not terminate the
firm’s pre-existing contracts with its
clients, so that partners who perform
those contracts do so as fiduciaries for
the benefit of the dissolved partnership.
…….
• If partners of a dissolving law partnership
stayed together during the wind up of
the firm’s business, the unfinished
business doctrine would be of no
 moment.
• But they do not—they scatter to new
law firms, taking open client matters
with them. The work they or their
colleagues perform on those matters at
their new firms produces fees that their
new firms wish to collect and retain, and
which they do not want to share with, or
surrender to, the dissolved firm. -Douglas R.
Richmond,Whither (Wither?) the Unfinished Business
Doctrine, 20 Chap. L. Rev. 283 (2017)

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