An Austin personal-injury firm has nonsuited its claims against an ex-associate in a case that raises questions about the proper way for a lawyer to leave a firm for a new job.
Lorenz & Lorenz alleged that before leaving to form a solo practice, Adam Alvarez “surreptitiously” copied client files, emailed form documents to himself and contacted clients five days before announcing his resignation. But Alvarez has denied all of the allegations, and his lawyer said he handled the departure ethically.
Amy Dashiell, who represents Lorenz & Lorenz, said a lawyer must tell his firm he’s quitting before he contacts clients about the move. Lorenz & Lorenz partner Ted Lorenz was concerned about the steps Alvarez took before leaving, she noted.
“I would speak on behalf of Ted in that his concern is: We all recognize lawyers can leave, and he is not out to punish anyone for leaving his firm,” said Dashiell, a partner in Scott, Douglass & McConnico in Austin. “The big point I would make is, it has to be a level playing field. Associates need to understand they do have a duty of loyalty to their current firm.”
But Robert House, who represents Alvarez and his firm, said, “I think it’s pretty clear, Mr. Alvarez did act properly.”
He said that Alvarez contacted the State Bar of Texas for ethical advice before leaving, and he followed the advice.
“The steps he took were pretty well within the guidelines for contacting clients,” said House, managing member in the Law Office of Robert House in Austin. “One, he did not contact any client prior to departing the firm. And two, he never took any client files.”
Neither Lorenz nor Alvarez returned a call seeking comment before deadline.
According to the Oct. 2 original petition in Lorenz & Lorenz v. Alvarez, Lorenz & Lorenz, referred to as “L&L,” sued Alvarez and his firm, The Law Office of Adam Alvarez in Austin.
Alvarez was an L&L associate in the prelitigation department from January 2012 to September 2013. As the only Spanish-speaking lawyer, he was the primary contact for Spanish-speaking clients.
He resigned on Sept. 3, but L&L learned that beginning on Aug. 30 he contacted clients “in an effort to coerce them to terminate their attorney-client relationship with L&L and then retain defendants to represent them,” alleges the petition.
At least one client did go with Alvarez.
“Most disturbingly, defendants have informed some of L&L’s existing clients that, even though Alvarez is no longer employed by L&L, he possesses the files created and maintained by L&L,” alleges the petition.
The firm alleges that Alvarez used his time there to develop a client base for himself, benefit from L&L’s reputation and access the firm’s proprietary information, among other things.
L&L sued Alvarez for breach of contract and breach of fiduciary duty, and sued both defendants for tortious interference with existing contracts. The firm sought actual damages, consequential damages, exemplary damages, pre- and post-judgment interest, costs, attorney fees and injunctive relief.
On Oct. 3, 201st District Judge Amy Clark Meachum granted a temporary restraining order, finding that L&L could be irreparably harmed unless the defendants were restrained from using, disclosing and keeping copies of L&L’s proprietary and confidential information. The judge ordered the defendants to stop using and return L&L’s confidential information, except names, phone numbers and addresses.
On Dec. 9, L&L nonsuited its claims without prejudice to refiling.
L&L cocounsel Paige Amstutz, a partner in Scott, Douglass & McConnico in Austin, said the TRO gave the firm the relief it wanted, which resolved the matter.
But House said the claim was dropped when L&L realized “they had no case. That was what was very clear to me.”