A recruiting law firm can face more than it bargained for when making a lateral hire. A recent House of Lords decision clarifies how economic torts can be used to hold a recruiting firm liable in damages to the lateral hire’s original firm. The recruiting firm has deeper pockets than the lateral so is often included in any claim.
While partner moves are much more common in the current market, when a partner decides to move on, the interests of that partner’s original firm are at odds with those of the recruiting firm. Any prudent firm – whether a general partnership or limited liability partnership (LLP) – will have an agreement in place that ought to subject a partner to a notice period and, after departure, restrictive covenants that limit that partner’s ability to work with the firm’s clients or hire its staff and deal with confidential information.
