What is the impact of a partnership agreement that prohibits a partner from leaving if he practices law in competition with his former firm?
The following excerpt is from Geron v. Seyfarth Shaw LLP (In re Thelen LLP), 20 N.E.3d 264, 2014 N.Y. Slip Op. 04879, 24 N.Y.3d 16, 995 N.Y.S.2d 534 (N.Y. 2014):
Ultimately, what the trustees ask us to endorse conflicts with New York's strong public policy encouraging client choice and, concomitantly, attorney mobility. In Cohen v. Lord, Day & Lord, 75 N.Y.2d 95, 96, 551 N.Y.S.2d 157, 550 N.E.2d 410 (1989), the partnership agreement provided that a departing partner forfeited his right to departure compensation if he practiced law in competition with his former firm. The lower court held that the provision was a valid ... financial disincentive to competition and did not prevent plaintiff from practicing law in New York or in any other jurisdiction (id. at 97, 551 N.Y.S.2d 157, 550 N.E.2d 410 [internal quotation marks omitted] ).
We reversed, holding that these financial penalties impermissibly interfered with clients' choice of counseli.e., [t]he
[24 N.Y.3d 33]
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