LEO: Corporation - Employment Agreement LE Op. 985
Corporation - Employment Agreement.
November 16, 1987
You ask whether an attorney may enter into an agreement with a
professional corporation which would allow the value of the stock of a
withdrawn member to be reduced if the attorney (a) withdrew in concert
with other attorneys and/or (b) carried with him or her or them clients of
Your inquiry is governed by Canon 2 of the Code of Professional
Responsibility. Specifically, DR:2-106(A) states that "a lawyer shall
not be a party to a partnership or employment agreement that restricts the
right of the lawyer to practice law after the termination of a
relationship created by the agreement, except as a condition to payment of
The Committee opines that only those agreements that restrict the right
of a lawyer to practice law after the termination of the relationship are
prohibited; there is no prohibition on agreements that affect the
termination of the relationship itself.
Accordingly, it is not improper for a professional corporation to enter
into an agreement with attorneys of the corporation which states that the
value of withdrawing attorney's stock would be reduced if he or she (a)
withdraws in concert with other attorneys and/or (b) carried with him, her
or them clients of the firm.
Committee Opinion November 16, 1987