TIME AND MONEY
For all that a transition is about others, the departing lawyer does have interests that deserve attention. The timing of a move during the calendar year can impact bonus coverage — namely, will a new employer offer a signing incentive that takes some of the sting out of a foregone bonus? In Bongard’s experience, departures in the autumn usually occasion this type of discussion, but economic factors play a part: “It’s a cyclical or economic decision that if business is improving and [a new employer] really wants to bring someone in, they need the body and they’re desperate, they’ll do what they have to do to bring them in.” Given current economic and market uncertainties, however, “more often than not, law firms aren’t really doing that now.” Where the move involves addressing a pressing internal staffing need at a new employer, it can be prudent and potentially profitable to negotiate.

Only one associate interviewed for this article took off a significant amount of time between jobs — four weeks. Typical responses ranged from a few days to none at all. Bongard says the average he sees is “a week, maybe two if they’re lucky. I think a lot of people don’t even take anything.” While some former associates indicated that in an “ideal world” they would have taken more time off, a variety of considerations, ranging from a need for continued income to meeting a new employer’s desire for a quick start, meant their first day at the new job was hot on the heels of the last day at the old job. Of course, by the very nature of the move being made, sometimes time off isn’t all that necessary. As Kee notes, “Maybe it’s because I’m busy doing things that I really, really want to be doing and I find really enjoyable that I don’t feel the burnout.. . . I was a little concerned about that, but actually I haven’t felt that way at all.”

DEALING WITH THE LAW SOCIETY AND PROFESSIONAL ASSOCIATIONS
Each law society requires lawyers to immediately notify their governing regulatory body of any change in status or employment, a task easily accomplished by submitting a  form. Lawyers departing private practice may qualify for reductions in the annual fee payable to their law society: the Law Society of Upper Canada, for example, has three fee categories (100 per cent of standard fees, 50 and 25 per cent) and nine fee-paying statuses (ranging from “partner in a law firm” to “employed in education” to “not working”). New employers not already aware of a lawyer’s fee obligations should be advised of the need to assume this cost. If a lawyer anticipates entirely leaving the practice and not returning, a surrender of licence is also available, obviating the need for further fee payments.

One divide between firms and other employers arises over ancillary costs, such as professional association memberships and publication subscriptions. Non-firm employers may need to be educated about those ongoing costs and the necessity of assuming them. A number of associates who had moved out of private practice also cautioned to raise these issues as soon as possible with a new employer, since internal reimbursements for costs can be much slower than what law firms typically provide.

INSURANCE
Like a steady flow of electricity when we flick on the light switch, many associates (especially those in mid- or large-sized firms) take for granted the presence of insurance coverage — it’s just always there, in the background, unobtrusively humming away. All licensed lawyers, unless they qualify for an exemption, are required to maintain and pay for professional liability insurance. Too busy trying to meet their billable hour targets, associates often never see the premiums invoice and are not encouraged to worry much about such prosaic matters as the policy that covers any missteps in their rendering of legal services.

Until, that is, a claim is made naming them as a defendant. Then suddenly the vagaries of your potential liability are rendered in exquisitely sharp detail. Just ask Mitch Kowalski. In 2001 Kowalski was toiling away at a real estate practice when a file from his past came back to haunt him: he was sued by former clients for work performed at the firm he had left two years before. Kowalski soon learned some crucial, and quirky, aspects about his insurance coverage. The details of coverage vary among jurisdictions but, in Ontario, the Lawyers’ Professional Indemnity Company (LawPRO) issues policies on a “claims made and reported” basis, which is different from the “claims occurrence” basis used by some insurers (such as in British Columbia). The distinction is that the former requires you to be insured at the time the claim is made — it is irrelevant whether you had insurance coverage when you actually performed the work. In short, what matters for basic coverage in Ontario is the insurance you have in place when you get sued. LawPRO’s printed advisories note: “Many claims do not surface for several years after legal services were provided; up to 10 per cent of claims are not reported until five years [later].”

Firms maintain “excess insurance,” available for an additional premium, which covers claims in excess of the coverage limits (usually $1 million per claim) set out in the mandatory standard policy. But such excess coverage, when purchased by a firm, usually only applies to work performed by an employee of the firm maintaining the coverage. Thus a lawyer who has been sued for work done at previous employer needs to look to the excess insurance provider for his or her old firm to cover claim amounts in excess of the $1-million basic coverage.

Kowalski had to look to his current insurance coverage for the first million dollars, and then rely on the excess insurer of his old firm for amounts over that threshold. Individual lawyers can purchase their own excess coverage — and when it comes to limiting personal liability, having a discussion with a provincial insurer about coverage requirements is worth the 15-minute investment.

Lawyers leaving private practice entirely should also inquire about additional “run-off” coverage, which covers claims that arose while a lawyer was engaged in private practice. In Ontario, LawPRO provides free run-off coverage in the amount of $250,000 — the offered coverage, however, is a one-time amount. If no additional coverage is obtained, as LawPRO rather ominously notes, “once the $250,000 limit is used up, you are personally liable for any additional costs.” And, of course, it doesn’t cover legal advice rendered after you’ve left private practice.

Basic liability insurance policies “belong” to each individual lawyer, and not their employer, and are transportable from job to job. Transitioning lawyers should ensure their insurer is notified of any career moves, not only because they are required to advise the insurer of their current employment details, but because changes in “status” can alter premiums. Lawyers who are retiring, moving to in house, taking up positions with government, or moving into non-profit or academic work may be eligible for an exemption from paying insurance

premiums. Those practising part time may qualify for a discount from the full premium.

Kowalski, now managing director of MEK Due Diligence Services, chuckles as he cautions that “legal liability is like herpes — it never goes away,” and warns it is dangerous to assume because you’re no longer practising that problematic old files will stay forever buried.

Speaking of communicable diseases, supplemental health insurance coverage is often overlooked by departing lawyers — unless the potential costs of an absence of coverage are highlighted by, say, a dental emergency you have to pay for out of your own pocket. If any significant amount of vacation time is going to be taken between jobs, discuss with a new employer if they are willing to start coverage early, if such coverage is even available.

ON THE WAY OUT THE DOOR
Properly approaching your departure as much involves looking ahead as making sure matters are OK behind you. Becoming informed about your new work environment will help ease a transition. When moving between Big Law firms, the level of support available to you is bound to be similar if not identical; but if your move involves an entirely new setting, educating yourself can be vital. Home Depot’s Good cautions, “There are certain luxuries in private practice that you just kind of get used to.” Kee advises that “a critical thing is to know what to expect — I was fortunate that I had been advised repeatedly about what the size of the organization that I was moving into was, what the nature of the systems that they had in place were, and that it was going to be a fundamentally different experience than what I had in the law firm.”

The law firm mindset strives to provide lawyers with everything they need to do in order to get their job done — things like office supplies, arranging couriers, and getting that 200-page closing binder photocopied before you return from lunch might be taken for granted on Bay Street, but such pampering is not universal.

There is a less mundane aspect to a new job as well: properly orienting yourself socially with your new colleagues. Bongard says law firms are increasingly aware of the need to quickly integrate new associates. But the best intentions and plans won’t be of much use if a new employee fails to take advantage of the opportunities. The danger to be avoided is “finding themselves off in their corner and not really socializing with the regulars,” which can lead to frustration for both sides of the new relationship.

Leaving isn’t only about where you’re going, of course — it’s also about where you’ve been. Ensuring that your current employer is left with positive sentiments about you can pay dividends down the road. The legal community can be surprisingly small when it comes to the nurturing, or trashing, of a reputation, and one never knows when, and in what context, you will interact with former colleagues — be it across a boardroom table, in a lawyer-client relationship, or even back in an employer-employee capacity.

Brett Seifred, now a partner at Davies Ward Phillips & Vineberg LLP, made two lateral moves as an associate, eventually returning to his initial employer. “Do the right thing,” he offers, “and work hard right to the very end. It’s not helpful to anyone to abuse the trust that your firm puts in you.” Professionalism and simple respect demand that you leave neither your colleagues nor your clients scrambling upon your departure. After all, Seifred muses, you never know when you might have to go back and knock on the same door you just walked through on your way out.