An article in New England IN-HOUSE, February 2012 at 12, discusses whether in-house counsel who leave a law department are free to join a competitor and practice law. It explains Rule 5.6 of the Rules of Professional Conduct which prohibits restrictions on the right of a lawyer to practice law after termination of the attorney-client relationship. Many states have held that in-house lawyers are also protected by this provision.
The article also argues that these restrictions apply to financial disincentives to lawyers who leave. It says “there is a strong argument that forfeiture agreements dis-incentivize in-house counsel from representing clients of their choosing, and, as such, they are unenforceable.” The article closes with some discussion about protection of confidential information and conflicts of interest. What I took away is that general counsel can’t lock up their talent by such constraints. To learn more contact Russell Beck.