Most Read Contributor in United States, April 2016
Partners recruited from dissolved law firms might bring more
than just a book of business to a new firm. These partners
and their new firms could be required to share the fruits of the
recruited partner's labor with his or her former
partners. So, before you hire a partner from a dissolved law
firm with the promise of an established book of business, check to
make sure that the partner's former partnership agreement
contains a Jewel v. Boxer waiver. Otherwise,
in addition to generating new business, your new recruit could
expose you to expensive litigation over attorneys' fees related
to transferred matters.
According to Jewel's unfinished business rule,
attorneys' fees received on cases in progress upon the
dissolution of a law firm partnership must be shared amongst the
former partners according to their right to fees in the former
partnership. The rule applies even where the partner that
originated the business is the partner that takes the business to
the new firm. In that case, the partner still must share the
matters' attorneys' fees with the partner's former
partners. Courts have applied the unfinished business rule to
the dissolutions of law firms organized as both professional
corporations and LLCs. State laws should be consulted to
determine whether a particular state has adopted the unfinished
On the flip side, a law firm may be able avoid the impact of the
unfinished business rule by including a Jewel waiver in
its partnership agreement. A typical Jewel waiver
might look like this:
Except as specifically set forth below, neither the Partners nor
the Partnership shall have any claim or entitlement to clients,
cases or matters ongoing at the time of the dissolution of the
Partnership other than the entitlement for collections of amounts
due for work performed by the Partners and other partnership
personnel on behalf of the Partnership prior to their departure
from the Partnership. The provisions of this Section are intended
to expressly waive, opt out of and be in lieu of any right any
Partner or the Partnership may have to "unfinished
business" of the Partnership, as that term is defined in
Jewel v. Boxer.
A law firm that wants to protect some of its "unfinished
business" might also carve out any significant contingent fee
matters by specifically excluding such cases from the waiver in the
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