Firms Have No Claim to 'Unfinished Business,' ABA Tells DC Court
Pointing to ethics rules, the country's largest bar group said dissolved law firms should not be able to claim a property stake in unfinished client matters that travel with a partner to a new firm.
July 16, 2018 at 03:37 PM
4 minute read
The original version of this story was published on The American Lawyer
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The American Bar Association has urged an appeals court in Washington, D.C., to rule against Howrey's bankruptcy estate and prevent dissolved law firms from claiming a portion of fees from hourly matters that partners bring with them to a new firm.
In an amicus brief filed late Thursday, the ABA, represented by Reed Smith and Orrick, Herrington & Sutcliffe, weighed in on the so-called unfinished business doctrine, the idea that a defunct law firm's bills for ongoing matters qualify as assets for the bankrupt firm. The ABA wrote that client matters should be considered the property of the clients themselves and that a ruling otherwise would run counter to legal ethics rules and the reality of running a modern-day law practice.
The bar association's amicus brief, in the District of Columbia Court of Appeals, comes after the California Supreme Court ruled in March on the unfinished business doctrine in litigation involving the estate of another bankrupt law firm, Heller Ehrman. The California ruling was prompted by the U.S. Court of Appeals for the Ninth Circuit, which asked the state high court to consider the unfinished business doctrine in the Heller case. The Ninth Circuit also certified related questions to the D.C. appeals court in the Howrey case because that firm's partnership was subject to D.C. law.
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