87 N.J.L.J. 459
July 16, 1964
Sale of Practice
An attorney inquires whether he may properly take over the
prosecution of certain cases of a retiring attorney and agree to
pay the latter one-third of all net profits from such work and from
any other work he performs for the former clients of the retiring
attorney over a three-year period. In the alternative, he inquires
whether he could properly pay a lump sum to the rotating attorney approximating the latter's net income for one year. He observes that "the good will represented by his (the retiring attorney's) practice has intrinsic value which he is understandably reluctant to give away."
Either type of transaction would violate the Canons of Professional Ethics, Canon 34. See also Canons 12, 27 and 37.
While there is a wealth of supporting authority on the matter, it will suffice here to refer briefly to the following.
The applicable principle is stated succinctly in Drinker, Legal Ethics 161 (1953):
A lawyer's practice and good will may not be offered for sale.
Another clear statement of the rule is found in A.B.A. Committee on Professional Ethics and Grievances, Opinion 266 (1945):