The New York state bar’s disciplinary committee has called for a 90-day suspension each for the founding partners of Tully Rinckey, a leading law firm, due to controversial employment and separation agreements. The controversy relates to the alleged restrictions on departing lawyers’ rights in the contracts, causing severe negative implications for professional mobility in law.
These agreements, as noted by the disciplinary committee, imposed a whooping $50,000 in liquidated damages if the attorney decided to leave the firm within a pre-defined tenure and if they attempted to solicit any of Tully Rinckey’s clients or employees. Moreover, the firm took measures to enforce these clauses on multiple occasions leading to a series of litigations.
The disciplinary committee underscored that employment and separation agreements in the legal profession should respect lawyers’ professional autonomy and mobility. Therefore, the clauses in Tully Rinckey’s contracts were seen as overly restrictive, controversial, and at odds with these values.
Furthermore, the committee highlighted that liquidated damages should not be punitive but rather a genuine pre-estimate of the potential loss. In the case of Tully Rinckey, the agreements seemed to serve as a deterrent for lawyers seeking to leave the firm or compete with it post-employment.
Notably, these circumstances are most concerning, considering the large number of lawyers affected. Tully Rinckey employs hundreds of attorneys across various offices in the United States and Europe, many of whom could potentially experience severe financial repercussions due to these heavily criticized provisions in their contracts.
To read more about this ongoing case and its implications on the professional rights of attorneys, you may refer to the original notice here.