Selling your law practice with a covenant not to compete

Where courts have refused to uphold a covenant not to compete given by one lawyer to another in the sale of a law practice, one of the primary arguments against validating the covenant is that clients have a right to counsel of their own choosing. And, the argument continues, saying that a lawyer cannot practice law in a given area for a reasonable period of time restricts that right.

Yet, the court just upheld the Vioxx settlement with Merck & Co., one provision of which states that a lawyer who has a client accept the settlement must withdraw from the case and cannot represent any other client in the case, even if he/she already represents other clients in the class action litigation.  Effectively, this provision restricts the right of clients to select counsel of their own choosing. What makes this situation even worse is that the second client (and others also represented by the lawyer whose one client accepted the settlement) is unlikely to get another lawyer with the skill, time and money to invest in learning a new matter in the middle of the case. The choice for these plaintiffs is simple: Settle with Merck or lose your lawyer!

While it’s nice to settle a large and complex class action, what happened to the famous and apparently not so inalienable right to counsel – competent (in Vioxx litigation) counsel?

Categorized in: Buying & Selling a Practice, Management