Rule Text (verbatim from The Florida Bar)
A lawyer or a law firm may sell or purchase a law practice, or
an area of practice, including good will, provided that:
(a) Sale of Practice or Area of Practice as an Entirety. The
entire practice, or the entire area of practice, is sold to 1 or more
lawyers or law firms authorized to practice law in Florida.
(b) Notice to Clients. Written notice is served by certified
mail, return receipt requested, on each of the seller’s clients of:
(1) the proposed sale;
(2) the client’s right to retain other counsel; and
(3) the fact that the client’s consent to the substitution of
counsel will be presumed if the client does not object within 30
days after being served with notice.
(c) Court Approval Required. If a representation involves
pending litigation, there will be no substitution of counsel or
termination of representation unless authorized by the court. The
seller may disclose, in camera, to the court information relating to
the representation only to the extent necessary to obtain an order
authorizing the substitution of counsel or termination of
representation.
(d) Client Objections. If a client objects to the proposed
substitution of counsel, the seller must comply with the
requirements of rule 4-1.16(d).
(e) Consummation of Sale. A sale of a law practice may not
be consummated until:
(1) with respect to clients of the seller who were served
with written notice of the proposed sale, the 30-day period referred
to in subdivision (b)(3) has expired or all these clients have
consented to the substitution of counsel or termination of
representation; and
(2) court orders have been entered authorizing
substitution of counsel for all clients who could not be served with
written notice of the proposed sale and whose representations
involve pending litigation; provided, in the event the court fails to
grant a substitution of counsel in a matter involving pending
litigation, that matter may not be included in the sale and the sale
otherwise will be unaffected. Further, the matters not involving
pending litigation of any client who cannot be served with written
notice of the proposed sale may not be included in the sale and the
sale otherwise will be unaffected.
(f) Existing Fee Contracts Controlling. The purchaser must
honor the fee agreements that were entered into between the seller
and the seller’s clients. The fees charged clients may not be
increased by reason of the sale.
Educational reference. This page summarizes a Florida Rule of Professional Conduct for educational purposes. The rule text and Comment are mirrored from the Florida Bar's official publication and are public domain. The plain-English summary and any commentary are the opinion of Phillips, Hunt & Walker and are general information only — not legal advice. Reading this page does not create an attorney-client relationship. If you believe a Florida lawyer has violated this rule, you can file a complaint with The Florida Bar at floridabar.org. Past results do not guarantee a similar outcome.
What this rule means in plain English
A Florida lawyer can sell a law practice (or part of one) to another lawyer or law firm, but only under specific conditions: the selling lawyer must cease practicing in that area, clients must receive written notice of the sale with the option to choose different counsel, and fees can’t be increased simply because of the sale. The rule protects clients from being treated like assets on a balance sheet without their consent.
Florida Bar Ethics Opinions interpreting this rule
- Opinion 77-1 (1977)
<p>A retiring Florida lawyer may write to clients proposing either to transfer their files to a named successor attorney (who will help close out the practice) or to return the files to them. The notice should give the client a clear choice rather than presuming consent. Selling a law practice has additional disclosure requirements under Rule 4-1.17.</p>
Read on floridabar.org →
Comment (verbatim from The Florida Bar)
The practice of law is a profession, not merely a business.
Clients are not commodities that can be purchased and sold at will.
In accordance with the requirements of this rule, when a lawyer or
an entire firm sells the practice and other lawyers or firms take over
the representation, the selling lawyer or firm may obtain
compensation for the reasonable value of the practice as may
withdrawing partners of law firms. See rules 4-5.4 and 4-5.6.
The requirement that all of the private practice, or all of an
area of practice, be sold is satisfied if the seller in good faith makes
the entire practice, or area of practice, available for sale to the
purchasers. The fact that a number of the seller’s clients decide not
to be represented by the purchasers but take their matters
elsewhere, therefore, does not result in a violation. Similarly, a
violation does not occur merely because a court declines to approve
the substitution of counsel in the cases of a number of clients who
could not be served with written notice of the proposed sale.
Sale of entire practice or entire area of practice
The rule requires that the seller’s entire practice, or an area of
practice, be sold. The prohibition against sale of less than an entire
practice area protects those clients whose matters are less lucrative
and who might find it difficult to secure other counsel if a sale could
be limited to substantial fee-generating matters. The purchasers
are required to undertake all client matters in the practice, or
practice area, subject to client consent or court authorization. This
requirement is satisfied, however, even if a purchaser is unable to
undertake a particular client matter because of a conflict of
interest.
Client confidences, consent, and notice
Negotiations between seller and prospective purchaser prior to
disclosure of information relating to a specific representation of an
identifiable client do not violate the confidentiality provisions of rule
4-1.6 any more than do preliminary discussions concerning the
possible association of another lawyer or mergers between firms,
with respect to which client consent ordinarily is not required. See
rule 4-1.6(c)(6). Providing the prospective purchaser access to
detailed information relating to the representation, for example, the
file, however, requires client consent or court authorization. See
rule 4-1.6. Rule 4-1.17 provides that the seller must attempt to
serve each client with written notice of the contemplated sale,
including the identity of the purchaser and the fact that the
decision to consent to the substitution of counsel or to make other
arrangements must be made within 30 days. If nothing is heard
within that time from a client who was served with written notice of
the proposed sale, that client’s consent to the substitution of
counsel is presumed. However, with regard to clients whose
matters involve pending litigation but who could not be served with
written notice of the proposed sale, authorization of the court is
required before the files and client-specific information relating to
the representation of those clients may be disclosed by the seller to
the purchaser and before counsel may be substituted.
A lawyer or law firm selling a practice cannot be required to
remain in practice just because some clients cannot be served with
written notice of the proposed sale. Because these clients cannot
themselves consent to the substitution of counsel or direct any
other disposition of their representations and files, with regard to
clients whose matters involve pending litigation the rule requires an
order from the court authorizing the substitution (or withdrawal) of
counsel. The court can be expected to determine whether
reasonable efforts to locate the client have been exhausted, and
whether the absent client’s legitimate interests will be served by
authorizing the substitution of counsel so that the purchaser may
continue the representation. Preservation of client confidences
requires that the petition for a court order be considered in camera.
If, however, the court fails to grant substitution of counsel in a
matter involving pending litigation, that matter may not be included
in the sale and the sale may be consummated without inclusion of
that matter.
The rule provides that matters not involving pending litigation
of clients who could not be served with written notice may not be
included in the sale. This is because the clients’ consent to
disclosure of confidential information and to substitution of counsel
cannot be obtained and because the alternative of court
authorization ordinarily is not available in matters not involving
pending litigation. Although these matters may not be included in
the sale, the sale may be consummated without inclusion of those
matters.
If a client objects to the proposed substitution of counsel, the
rule treats the seller as attempting to withdraw from representation
of that client and, therefore, provides that the seller must comply
with the provisions of rule 4-1.16 concerning withdrawal from
representation. Additionally, the seller must comply with applicable
requirements of law or rules of procedure.
All the elements of client autonomy, including the client’s
absolute right to discharge a lawyer and transfer the representation
to another, survive the sale of the practice or an area of practice.
Fee arrangements between client and purchaser
The sale may not be financed by increases in fees charged the
clients of the practice. Existing agreements between the seller and
the client as to fees and the scope of the work must be honored by
the purchaser. This obligation of the purchaser is a factor that can
be taken into account by seller and purchaser when negotiating the
sale price of the practice.
Other applicable ethical standards
Lawyers participating in the sale of a law practice or a practice
area are subject to the ethical standards applicable to involving
another lawyer in the representation of a client for all matters
pending at the time of the sale. These include, for example, the
seller’s ethical obligation to exercise competence in identifying a
purchaser qualified to assume the practice and the purchaser’s
obligation to undertake the representation competently (see rule 4-
1.1); the obligation to avoid disqualifying conflicts, and to secure
the client’s informed consent for those conflicts that can be agreed
to (see rule 4-1.7 regarding conflicts and see the terminology section
of the preamble for the definition of informed consent); and the
obligation to protect information relating to the representation (see
rules 4-1.6, 4-1.8(b), and 4-1.9(b) and (c)). If the terms of the sale
involve the division between purchaser and seller of fees from
matters that arise subsequent to the sale, the fee-division
provisions of rule 4-1.5 must be satisfied with respect to these fees.
These provisions will not apply to the division of fees from matters
pending at the time of sale.
If approval of the substitution of the purchasing attorney for
the selling attorney is required by the rules of any tribunal in which
a matter is pending, approval must be obtained before the matter
can be included in the sale (see rule 4-1.16).
Applicability of this rule
This rule applies, among other situations, to the sale of a law
practice by representatives of a lawyer who is deceased, disabled, or
has disappeared. It is possible that a nonlawyer, who is not subject
to the Rules of Professional Conduct, might be involved in the sale.
When the practice of a lawyer who is deceased, is disabled, or has
disappeared is being sold, the notice required by subdivision (b) of
this rule must be given by someone who is legally authorized to act
on the selling lawyer’s behalf, for example, a personal representative
or a guardian. This is because the sale of a practice and transfer of
representation involve legal rights of the affected clients.
Bona fide admission to, withdrawal from, or retirement from a
law partnership or professional association, retirement plans and
similar arrangements, and a sale of tangible assets of a law
practice, do not constitute a sale or purchase governed by this rule.
Added July 23, 1992, effective January 1, 1993 (605 So.2d 252); amended
March 23, 2006, effective May 22, 2006 (933 So.2d 417); amended July 7,
2011, effective October 1, 2011 (67 So.3d 1037); amended June 11, 2015,
effective October 1, 2015 (167 So.3d 412).