North Carolina 2023 Formal Ethics Opinion 1
If you’re retiring and want to sell your law practice, how to determine if a potential purchaser is the right one?
What sort of due diligence is required? How to avoid common legal, financial and ethical pitfalls?
NC State Bar 2023 Formal Ethics Opinions 1, adopted April 21, 2023, sheds light on these and related questions. The opinion clarifies a lawyer’s professional responsibility when closing and/or selling a law practice and when handling aged client files.
Read, print or download NC State Bar 2023 Formal Ethics Opinion 1 here.
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NC 2023 Formal Ethics Opinion 1
Sale or Closure of a Law Practice and Handling Aged Client Files
Here is the Factual Background:
Lawyer A is a solo practitioner with a general practice focused primarily on real estate, estate planning, and small business matters. After 40 years of practice, Lawyer A has decided to retire. Lawyer B, a solo practitioner in Lawyer A’s town with a practice similar to Lawyer A’s practice, approached Lawyer A about purchasing Lawyer A’s practice. After negotiations, Lawyer A agrees to sell his entire practice to Lawyer B. The sale includes Lawyer A’s entire book of business, encompassing both current clients and former clients, but does not include Lawyer A’s office space. Lawyer A plans to provide Lawyer B with the client files for all current clients as well as all former clients, which will be stored in Lawyer B’s office. Lawyer A did not dispose of any client files created during his 40 years of practice.
Inquiry #1: Considering Lawyer B’s experience and current practice, is Lawyer B an appropriate purchaser of Lawyer A’s practice?
Opinion #1: Yes. …
Inquiry #2: Despite his retirement and sale of practice to Lawyer B, Lawyer A hopes to offer limited legal services to a few of his long-term clients, family members, and friends in the area (for example, Lawyer A might perform an occasional residential closing transaction or draft a simple will). May Lawyer A offer these limited services after selling his practice to Lawyer B?
Opinion #2: No, unless the service is offered pro bono to indigent persons or members of the seller’s family….
The opinion addresses multiple permutations, possibilities and fact scenarios along these lines. It is recommended you read the full opinion.
Read or download 2023 NC FEO 1 here.
SOURCE: 2023 Formal Ethics Opinion 1 | North Carolina State Bar (ncbar.gov)
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