Eisenstein v. Conlin, P.C.

827 N.E.2d 686 (2005)

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Nature of the Case

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Facts

Ps resigned from the law firm Dike, Bronstein, Roberts & Cushman LLP (DBRC) to become partners in another law firm. Several DBRC clients retained them in the new firm. The DBRC firm agreement provides that, for compensation purposes, partners receive different levels of credit for work performed for the firm's clients. A partner receives credit for 100% of billings for clients 'credited' to that partner, that is, clients whom the partner brought to the firm, even if other partners later obtain new work from the clients. A partner is credited for 90% of billings for noncredited clients, that is, clients attributed to another DBRC partner, with the remaining 10% credit going to the originating partner. Paragraphs 5A and 5B of the agreement provide that when a partner leaves the firm that partner must pay to a remaining DBRC partner 15% of billings for each noncredited client for whom the departing partner performed work after withdrawing from DBRC. The required payments were to be made for a period of four years after the former partner's withdrawal from DBRC. Eisenstein (P) became a partner at DBRC in 1989. Resnick (P) became a partner at DBRC in 1995. Both ratified the terms and conditions of the agreement. In 1999, Ps left to accept positions as partners in the firm Peabody & Brown, a predecessor firm to Nixon Peabody, LLP. Ps both performed legal work for certain present and former clients of DBRC. In May 2001, Ps sued DBRC seeking an accounting and the payment of amounts allegedly due to them pursuant to the agreement for their share of profits, personal property, and a return of their capital contribution. DBRC counterclaimed alleging that Ps had unjustly enriched themselves and breached their contractual and fiduciary obligations to DBRC by failing to make payments pursuant to paragraphs 5A and 5B of the agreement, by disclosing confidential client information and portions of the agreement and by unfairly siphoning clients from DBRC. Ps moved for summary judgment alleging that paragraphs 5A and 5B, on which the claims against them were grounded, were void and unenforceable. Ps argued that the provisions of the agreement are unenforceable because they violate Mass. R. Prof. C. 5.6. Rule 5.6 provides in pertinent part: 'A lawyer shall not participate in offering or making . . . a partnership . . . agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement . . . .' The Superior Court granted summary judgment to Ps and DBRC appealed.