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Shutting it down

|Written By Bob Tarantino

Relief. Excitement. Nervousness. Having made the decision to move on from your current employer, the rush of emotions can be overwhelming and exhilarating. Those taking the plunge and moving to the next chapter of their career should not overlook one minor aspect of the transition: the details.

Sorry, did we say “minor?”

When you start working at a law firm, you get a binder full of information about where to find things (coffee, paper, late-night snacks), how to do your job (show up early, dress neatly, stay late), and how best to fit in (be friendly, attend practice group meetings, stay late). Unfortunately when you leave, there's little guidance, but there are significant logistical, relationship, and even ethical issues raised when an associate changes jobs, whether for another firm, an in-house position, or beyond the law altogether. A plethora of issues warrant attention, particularly ancillary matters that may seem unimportant at the time but could prove consequential.

Even if a soon-to-be former employer provides resources to the transitioning lawyer to guide them through the process of leaving, ultimate responsibility rests with the individual. It's not just for career advancement and peace of mind, but also a more fundamental obligation. As the Law Society of Upper Canada reminds lawyers winding down their practice, the professional duty of competent representation “includes an obligation to take appropriate steps to safeguard your clients’ interests in all circumstances.” Each task completed when changing jobs — from properly notifying others, to passing information on to colleagues who are taking over files, to ensuring availability to answer questions should they arise — should be motivated by remembering that the interests of the client are paramount.

From his vantage point, Warren Bongard, co-founder and vice president of ZSA Legal Recruitment, observes that law firms have “raised their game over the last five years,” in light of increased mobility among lawyers, and have sought to develop internal means for seamlessly handling outgoing and inbound lateral transfers.

However, the transition may not be quite as fluid when the transition is not from one large firm to another but between different facets of the profession: from a firm to in-house counsel, or to a government, union, or non-profit role. Recruiters don't just advise lawyers on the fine points of the transition process but also highlight issues for a new employer, particularly those without long experience in bringing in new counsel, says Bongard.

“If it’s a company that’s just in growth mode and they’re hiring their very first lawyer, we often become the educator.”

TIMING THE TRANSITION
Carey Bertolet, founding managing director of the New York office of BCG Attorney Search, says a resignation is fundamentally a business transaction, overlaid with professional obligations, and should be approached as such. While two weeks is generally acknowledged as the minimum period of notice for leaving a firm, the appropriate amount of time is a function of seniority, file status, and responsibility: two weeks might suffice for the second-year associate but a sixth-year associate with significant oversight of ongoing matters or who has developed long-term client relationships should be giving more notice.

Jennifer Good, who moved from Heenan Blaikie LLP to an in-house position at Home Depot of Canada Inc., suggests up to six weeks to facilitate a clean hand-off of files. While three weeks was enough for a smooth transition when she moved in-house, a longer period was needed when she earlier went on maternity leave. In both cases, “even a little more time might have been nice.” Bongard concurs that, more often than not, lawyers want to give a minimum of three or four weeks of notice.

Several factors can collide in transitions, providing conflicting imperatives: the state of current files may require a long notice period while a new employer may want a relatively early start date. “Often associates will time their resignations with their files . . . sometimes they’re just closing up the deal and then they’ll resign,” says Bongard. Setting, rather than negotiating, the departure date can also help focus and prioritize the transition. A good first step is to sit down and enumerate all active files, their current status, and who is best positioned to take carriage of them.

Jason Kee, currently director of policy and legal affairs at the Entertainment Software Association of Canada and previously an associate at Fasken Martineau DuMoulin LLP, gave three weeks’ notice. “I was in the middle of several transactions and I just couldn’t drop them that quickly without doing damage,” he says. Bongard notes most firms will want to “start transitioning files almost immediately to other lawyers,” and Kee agrees that taking a proactive approach was a significant factor in his effecting a painless transfer: “The moment that the job was secured, I immediately gave notice and started working on a transition plan to get people involved who could take over the roles.”  Now is the time to properly organize and label all files, rather than just leaving behind an accordion folder on a chair with the client name scrawled across the front.

Clients, too, will want to know of a pending departure. Firms may have a protocol in place for advising clients, but it is often up to the departing lawyer to determine how the client will be best served, especially in situations where that lawyer is the client’s primary point of contact. Bertolet says, “Client matters are the most precious cargo to protect as you prepare to leave.” The guiding principle should be to provide clients with as much notice as possible, thereby securing both their interests and the client’s relationship with the firm.

An important metric is the amount of knowledge the departing lawyer has embedded in the client’s matters and how long it will take to convey that to another lawyer. The goal is to ensure the client continues to receive the same high calibre of representation. “I had been working on these things for months, and I had a lot of knowledge built up on the transactions,” says Kee. “I didn’t want to notify a client until I had finalized who it was that was going to take over my files. It took about a week to come up with a complete transition plan about who was going to take over what files, who had availability to do what.”

Schedule generously for the hand-off, since it can involve significantly more work than you might think. Good advises: “For every file you’re working on, you want to sit down with people and talk them through the file; and, ideally, if you’re organized enough, you’re going to send them a transition memo.” As important as it is to pass along “hard” information (such as filing deadlines or the status of negotiations), “soft” information is one of the key pieces of knowledge to transfer: whether a client prefers answers in lengthy e-mails or over the phone, what kind of turnaround they expect once they’ve requested an opinion, or the decision-making hierarchy at an organization.

Providing accurate contact information to both the human resources department and any individuals who are taking over carriage of files is essential and obligatory — there’s no quicker way to generate resentment among former colleagues or clients than to leave behind a Byzantine file and no one to turn to for answers. The final goodbye can also be an opportunity to solidify relationships. Avoid sending a gushing e-mail to all firm employees across the country if you’ve only ever dealt with the bankruptcy group in one office — but be sure to leave on a positive note. Professionalism and brevity, rather than bitterness (at past disappointments) or glee (at finally getting out of there), should be the guiding sentiments.

Not getting e-mails on the first day of work is a little like showing up to find the phone hasn’t been connected. Like law firms, some private companies insist on owning their employee’s PDAs, while others will cover the access and data costs — be sure to confirm which approach a new employer has adopted (and be sure to give back any electronic devices owned by a former employer). Arrange for an automatic “out of office” response to be active on old e-mail accounts for at least two weeks; the response should both contain new contact information and advise who at the old employer can be contacted with questions about old files.


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.


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