Because the Law Firm Owners practiced principally in the State of New York, the D.C. Court of Appeals’ Ad Hoc Committee first had to address a threshold choice-of-law issue:

“The Respondents are admitted to practice in the District of Columbia. Each also is admitted in New York and one additional jurisdiction. As D.C. Bar members, they are subject to the disciplinary jurisdiction of the D.C. Court of Appeals regardless of where their conduct occurs and even if they also are subject to the jurisdiction of one or more other courts. See Rule 8.5(a).  Disciplinary Counsel contends that the D.C. Rules apply because the Respondents are both licensed in D.C. and D.C.’s Rules are substantially the same as any other potentially applicable disciplinary rules (e.g., the Model Rules, or the New York or Virginia rules). The Respondents argue that Disciplinary Counsel bears the burden of proving that the D.C. Rules apply to the specific alleged misconduct and that the similarity of the disciplinary rules between jurisdictions is not relevant. They contend that in each instance where Disciplinary Counsel failed to establish that the D.C. Rules apply to this matter, such charges should be dismissed.”  Rule 8.5(b)(2)(ii) provides that: “If the lawyer is licensed to practice in this and another jurisdiction, the rules to be applied shall be the rules of the admitting jurisdiction in which the lawyer principally practices; provided, however, that if particular conduct clearly has its predominant effect in another jurisdiction in which the lawyer is licensed to practice, the rules of that jurisdiction shall be applied to that conduct.” Here, the Respondents concede that “this matter concerns the Firm’s treatment of personnel in the D.C. Office and treatment of clients who were being serviced by lawyers working in the D.C. Office. Given the facts here, the Respondents’ conduct had its predominant effect in the District of Columbia. Thus, the D.C. Rules of Professional Conduct apply.”

Then the Ad Hoc Committee addressed the issue of imposing “liquidated damages” on a departing attorney with respect to clients who might leave the firm and retain the departing attorney to complete the representation:

“The legal profession exists to serve clients, and lawyers must perform such service with skill, zeal, and diligence. The same Rules of Professional Conduct that create this commitment, however, also limit it in a variety of ways. Insofar as relevant here, Rule 5.6 prohibits conditions whose effect is to limit the access of future clients to lawyers of their choosing – particularly ‘to lawyers, who by virtue of their background and experience, might be the very best available talent to represent such individuals.’  Rule 5.6(a) reflects the tension between two values – protecting client (and potential client) choice of counsel by ensuring lawyer mobility, on the one hand, and allowing law firms to protect their investments in their lawyers, on the other. The ABA Model Rules of Professional Conduct and the rules of most American jurisdictions favor the former value. The District of Columbia long – and emphatically – has taken that position. So has New York, where Respondents’ principal office is located and where they principally practice. Legal Ethics Opinion 368 may have been more specific on this issue than some previous expressions of D.C. law but it did not mark a change of direction. For example, comment [2] to Rule 5.6, which took effect in February 2007 – before Tully Rinckey opened the D.C. Office – states that ‘restrictions, other than those concerning retirement benefits, that impose a substantial financial penalty on a lawyer who competes after leaving the firm may violate paragraph (a).’ Legal Ethics Opinion 325, issued in 2004, said that ‘it has long been clear that Rule 5.6(a) bars not only agreements that would explicitly restrict lawyers’ practices but also reaches agreements that may not explicitly bar such actions but create financial disincentives to taking these actions.’”

In addition:

“The Firm had a practice of transferring the clients of departing lawyers to other Firm lawyers, barring the departing lawyers from contacting those clients in connection with their departures, and advising those clients – sometimes unilaterally and sometimes by a joint letter – that their matters had been transferred to other lawyers in the Firm.  Numerous separation agreements implementing this policy were signed for the Firm by each Respondent. When it excluded the departing lawyer from any role in formulating or sending a communication to the clients about their right to choose who would represent them going forward, the latter aspect of this practice arguably violated Rules 1.4 and 5.6(a) because it removed the departing lawyer from the notification process. See D.C. Bar Ethics Opinion No. 221.”


Report & Recommendation of the Ad Hoc Committee, In the Matter of Tulley and Rinckey, No.22-BD-025 (D.C. App. Nov. 20, 2023).