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Introduction: In a landmark decision that could have wide-reaching implications for legal firms and their departing attorneys, the Colorado Supreme Court has ruled against the enforceability of a contract clause demanding a fee from lawyers for each client they take upon leaving a firm. This ruling underscores the delicate balance between a firm’s financial interests and a lawyer’s right to practice.

Background: The case centers around Grant Bursek, a former associate at Denver’s Johnson Family Law, known as Modern Family Law. Upon his departure, along with 18 clients, Bursek faced a demand from his former firm to pay $18,936, calculated at $1,052 per client, as stipulated in his employment contract.

The Ruling: The Colorado Supreme Court deemed this contract provision in violation of a Colorado ethics rule. This rule specifically prohibits employment and partnership agreements from restricting a lawyer’s right to practice post-departure. The court opined that while reimbursement of specific client costs might be permissible under certain circumstances, imposing a blanket fee for continuing to represent clients who choose to follow the departing attorney is not allowed.

Implications: This decision puts into perspective the ongoing debate over the ethics of financial penalties imposed on lawyers when they leave a firm. The Colorado Supreme Court’s ruling aligns with the majority view in states with similar ethics rules, which consider any financial burden on departing attorneys a violation of these rules. In contrast, the minority view, also acknowledged by the Colorado Court, calls for a balance between client choice, attorney autonomy, and a firm’s financial stability, requiring a reasonableness inquiry.

Broader Context: The type of fee imposed on Bursek was criticized for forcing attorneys to weigh the financial value of retaining each client, potentially leading to a bias towards high-fee cases and against less lucrative ones. The court did note, however, that reimbursement could be justified in scenarios where a firm incurs specific costs, like advancing litigation expenses or attracting particular clients.

Conclusion: The Colorado Supreme Court’s ruling in Bursek’s case sets a precedent that emphasizes the ethical considerations in lawyer employment agreements, particularly concerning client transitions. It highlights the importance of balancing a law firm’s financial interests with the fundamental rights of lawyers to practice freely and the clients’ right to choose their legal representation. This decision is a significant step in defining the boundaries of financial agreements within legal firms and their departing attorneys.

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About Blanford Law:

We are no-nonsense, relentless, fair, and honest. We are great listeners instead of fast talkers, that is just who we are. More than 20 years ago, Ken began practicing law with a deeply-seeded belief that every person has the right to the best legal representation available. He built his law firm on that belief. Another belief that he strongly adheres to is his fundamental belief that clients deserve respect, with no assumptions or preconceived notions.  If you or someone you know is accused of a crime or injured as a result of the negligence of another, please have them call us at 253-720-9304 or email us