Model Rule 1.17: Sale of Law Practice

When it applies

This comes up when a solo practitioner retires, dies (through an estate), or leaves a practice area and wants to transfer client files and goodwill to a buyer; on the MPRE it tests whether students know the specific conditions (entire practice/area, cessation of practice, written notice, no fee increase) that make such a sale ethical rather than an improper sale of clients as commodities.

What the rule requires

• The sale must be of the entire practice, or the entire area of practice, not just a subset of profitable clients.
• The selling lawyer must cease private practice entirely in the relevant jurisdiction or in the area of practice sold.
• Clients must receive written notice of the proposed sale, including their right to retain other counsel and to take possession of their file, and notice that consent to transfer will be presumed if the client does not take any action or object within 90 days of receiving the notice.
• If a client cannot be given notice, the representation may only be transferred with court approval.
• The fees charged to clients cannot be increased by reason of the sale.
• The purchasing lawyer must comply with conflict-of-interest analysis under Rule 1.7 and related rules for the newly acquired clients.

Exceptions

• The entire-practice requirement is met if the seller in good faith makes the entire practice (or area of practice) available to the purchaser or purchasers; it is not violated merely because some clients decline the purchaser and take their matters elsewhere.
• A seller who later returns to private practice because of an unanticipated change in circumstances does not necessarily violate the cessation requirement, and taking a position as in-house counsel or a government lawyer, for example, is not a return to private practice.

How the MPRE tests Model Rule 1.17

• Students forget that the seller must stop practicing altogether in that area/jurisdiction — a lawyer who sells but keeps practicing in the same field violates the rule.
• Students assume any fee arrangement is fine, but raising fees solely due to the sale is prohibited.
• Students overlook that client consent is presumed only after proper written notice and a waiting period, not automatic upon sale.
• Students confuse this with Rule 5.4 fee-splitting issues, but a proper 1.17 sale is not improper fee sharing; Rule 5.4 expressly allows a lawyer who buys the practice of a deceased, disabled, or disappeared lawyer to pay the agreed price to that lawyer's estate or representative.