[*See an update on this topic below*]
Are you thinking of leaving your law firm for another? Do you know your professional obligations with respect to your clients and your firm? Recently a decision of the Ontario Superior Court of Justice  reviewed those obligations in the context of a dispute that arose after an associate left one personal injury law firm for another, taking some of her clients with her. The principal of the associate's former firm commenced a claim for $1.25 million in damages against the associate for "breaches of fiduciary duty, trust, good faith and / or loyalty" and as against the principal of her new firm for "knowing assistance" in the alleged breaches.
Summary Judgment Motion
The defendant principal of the new firm brought a summary judgment motion seeking to have the action against him dismissed on the basis that the plaintiff (the principal of the associate's former firm) failed to show (and could not show) "knowing assistance" in the associate's alleged breaches. Justice Gordon noted that solely for the purpose of the summary judgment motion, he assumed that the plaintiff had met the threshold of proving that the associate had breached "some duty" owed to the principal of her former firm. Whether she actually did or not, however, was "a matter for another day".
In his analysis of the legal issue, Justice Gordon reviewed certain guidelines provided by the Law Society of Upper Canada (dated 2009) concerning a lawyer's professional obligations when leaving a law firm. In summary, those guidelines provide that:
In this particular case, the plaintiff could only be successful in a claim in "knowing assistance" against the principal of the associate's new law firm if the following elements were met:
a) there was a trust;
b) the new principal had knowledge of the trust;
c) the associate perpetrated a dishonest and fraudulent breach of trust; and
d) the principal had actual knowledge of, or was wilfully blind to, and participated in the associate's dishonest and fraudulent breach of trust.
The defendant testified that he advised the associate that she must abide by the Law Society guidelines and specifically her duty to inform her clients. This evidence was uncontradicted. The Court noted that if there was "more or better evidence, it should have been tendered on this motion."
Justice Gordon concluded that there was no evidence to support an allegation of "knowing assistance" either in the form of actual knowledge or wilful blindness: "Indeed the evidence is to the contrary. It was unchallenged that [the new principal] was well aware of the lawyer's duty to inform clients on leaving a firm and the manner in presenting the options for the client. . .On this evidentiary record, I conclude [the new principal] did all that was required."
The motion for summary judgment dismissing the action as against the new principal was granted.
Do you know all of your professional obligations when leaving a law firm? It appears that the LSUC's guide referenced in this case "Leaving a Law or Legal Services Firm" (Dated 2009) is no longer available on its website. However, the guide "Closing Down Your Practice" also provides some useful tips.
If you are interested in case summaries for your website or blog please contact me.
 Robert Findlay Law Office Professional Corporation v. Werner et al 2015 ONSC 2955.
 Ibid. at para. 12.
 Ibid. at para. 15 & 23-27.
 Ibid. at paras. 30.
 Ibid. at para. 49.
*UPDATE: In June 2017 the Law Society of Upper Canada amended the Rules of Professional Conduct to add a rule dealing with a lawyer's professional obligations when leaving a law firm, based in part on the Robert Findlay case discussed above. See my blog post on this new rule on the Flex Legal blog.*
7/3/2020 05:31:56 am
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11/19/2021 02:16:34 am
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12/28/2021 03:01:10 pm
Justice Gordon noted that solely for the purpose of the summary judgment motion, Thank you for making this such an awesome post!
1/28/2022 06:13:16 pm
Reviewed those obligations in the context of a dispute that arose after an associate left one personal injury law firm for another, taking some of her clients with her. I truly appreciate your great post!
1/31/2022 12:39:39 pm
As a lawyer, you're fully committed to your clients. You aim to represent them well and fight for their future. That's a huge responsibility. And chances are, you don't take it lightly.
4/11/2022 08:47:03 pm
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10/22/2022 10:51:13 am
Very detailed article. I appreciate you sharing.
1/3/2023 01:04:56 pm
Thanks for sharing this information! lawyers have a duty to exercise loyalty and fidelity to their former firm and its clients.
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Erin C. Cowling is a freelance lawyer, entrepreneur, legal career consultant researcher & writer, and President and Founder of Flex Legal Network Inc., a network of freelance lawyers.