Rule 1.17 Amended: You may sell a practice area without selling your whole practice
On Friday, the Court released an amendment to Rule of Professional Conduct 1.17 (Relating to Sale of Law Practice), allowing for the purchase of a practice area, rather than of an entire practice. Previously, the rule only spoke to an attorney selling his whole practice and ceasing any active practice of law. The amendment provides that an attorney may–to use the Supreme Court’s example–sell his estate planning practice, but retain his probate work.
The Rule also clarifies that an attorney who comes back to practice later is not necessarily in violation of Section 2 of the rule, which requires the “Termination of Practice by the Seller.” An attorney who returns to private practice “as a result of an unanticipated change in circumstances” such as an attorney who took a judicial appointment only to lose a retention election, does not necessarily violate this rule. Furthermore, the Rule is clarified to provide that the selling attorney may continue providing pro-bono services to the poor in his practice area, among other outlets.
- “disappeared” lawyers’ representatives are no longer permitted to sell the attorney’s practice, while representatives of lawyers estates are still permitted to do so;
- clients must be given “actual” notice of the sale of the practice, and if any client cannot be reached, a court order approving the transfer of the file is necessary, with the potential for in camera review;
- A selling attorney may assist “in the orderly transition of active client matters for a reasonable period after the closing without a fee.
You can read the new rule here, with deletions in brackets and additions underlined.