Court Opinion

ID: 2682942
Source: CourtListenerOpinion
Date Created: 2014-07-11 21:02:46.708225+00
Date Added: 2024-06-11T09:14:29.464642
License: Public Domain

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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 136
In re: Thelen LLP.
_________________________________
Yann Geron, as Chapter 7 Trustee
of the Estate of Thelen LLP,
            Appellant,
        v.
Seyfarth Shaw LLP,
            Respondent.
---------------------------------
No. 137
In re: Coudert Brothers LLP,
        Debtor.
--------------------------------
Development Specialists, Inc.,
        Respondent-Appellant,
--------------------------------
K&L Gates LLP et al.,
        Appellants-Respondents,
--------------------------------
Akin Gump Strauss Hauer & Feld
LLP, et al.,
        Appellants-Respondents.

Case No. 136:
          Howard P. Magaliff, for appellant.
          Michael R. Levinson, for respondent.
          DLA Piper LLP (US) et al.; New York State Bar
Association et al.; Liquidating Trustee for the Dewey & LeBoeuf
Liquidation Trust et al.; Attorneys' Liability Assurance Society,
Inc., amici curiae.

Case No. 137:
          Joel M. Miller, for appellants-respondents K & L Gates
LLP, et al.
          Shay Dvoretzky, for appellant-respondent Jones Day.
          David J. Adler, for respondent-appellant.
          New York State Bar Association et al.; Attorneys'
Liability Assurance Society, Inc., amici curiae.

READ, J.:
            The United States Court of Appeals for the Second
Circuit has asked us two questions relating to "whether, for
purposes of administering [a] . . . related bankruptcy, New York
law treats a dissolved law firm's pending hourly fee matters as
its property" (In re: Thelen LLP [Geron v Seyfarth Shaw LLP], 736

                                - 1 -
                                 - 2 -                Nos. 136 & 137

F3d 213, 216 [2d Cir 2013]).    We hold that pending hourly fee
matters are not partnership "property" or "unfinished business"
within the meaning of New York's Partnership Law.    A law firm
does not own a client or an engagement, and is only entitled to
be paid for services actually rendered.
                                 I.
                              Thelen
             On October 28, 2008, the partners of the law firm
Thelen LLP (Thelen) voted to dissolve the firm, which was
insolvent.    In carrying out the dissolution, Thelen's partners
adopted the Fourth Amended and Restated Limited Liability
Partnership Agreement ("Fourth Partnership Agreement") and a
written Plan of Dissolution.    The Fourth Partnership Agreement
provided that it was governed by California law and, unlike its
predecessor agreements, included an "Unfinished Business Waiver."
The waiver recited that
             "[n]either the Partners nor the Partnership shall have
             any claim or entitlement to clients, cases or matters
             ongoing at the time of the dissolution of the
             Partnership other than the entitlement for collection
             of amounts due for work performed by the Partners and
             other Partnership personnel prior to their departure
             from the Partnership. The provisions of this [section]
             are intended to expressly waive, opt out of and be in
             lieu of any rights any Partner of the Partnership may
             have to "unfinished business" of the Partnership, as
             the term is defined in Jewel v Boxer, 156 Cal. App.3d
             171 [203 Cal. Rptr. 13] (Cal. App. 1 Dist. 1984), or as
             otherwise might be provided in the absence of this
             provision through the interpretation of the [California
             Uniform Partnership Act of 1994, as amended]."
             This kind of waiver is referred to as a "Jewel Waiver,"

                                 - 2 -
                                - 3 -                 Nos. 136 & 137

after Jewel v Boxer (156 Cal App 3d 171 [Cal Ct App 1984]), the
intermediate appellate court case that inspired it.    Applying the
Uniform Partnership Act (UPA), the Jewel court held that, absent
an agreement to the contrary, profits derived from a law firm's
unfinished business are owed to the former partners in proportion
to their partnership interests.   The Thelen partnership adopted
the waiver with the
            "hope that, [it would] serve as an inducement to
            encourage partners to move their clients to other law
            firms and to move Associates and Staff with them, the
            effect of which will be to reduce expenses to the
            Partnership, and to assure that client matters are
            attended to in the most efficient and effective manner
            possible, and to help ensure collection of existing
            accounts receivable and unbilled time with respect to
            such clients."
            Following Thelen's dissolution, 11 Thelen partners
joined Seyfarth Shaw LLP (Seyfarth) -- 10 in its New York office
and one in California.   The former Thelen partners transferred
unfinished matters to Seyfarth, which billed clients for their
services.   On September 18, 2009, Thelen filed a voluntary
petition for relief under Chapter 7 of the Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of New
York.
            After his appointment as the Chapter 7 trustee of
Thelen's bankruptcy estate, Yann Geron (Geron) commenced an
adversary proceeding against Seyfarth in the United States
District Court for the Southern District of New York.    Geron
sought to avoid the "Unfinished Business Waiver" as a

                                - 3 -
                                 - 4 -                Nos. 136 & 137

constructive fraudulent transfer under 11 USC §§ 544 and 548 (a)
(1) (B) and California state law, and to recover the value of
Thelen's unfinished business for the benefit of the estate's
creditors.    On the assumption that pending hourly matters were
among a law firm's assets, Geron argued that Thelen's partners
fraudulently transferred those assets to individual partners
without consideration when they adopted the "Unfinished Business
Waiver" on the eve of dissolution.
             Seyfarth moved for judgment on the pleadings, arguing
that New York rather than California law defined whether it
received any "property interest."    In a decision dated September
4, 2012, the District Court Judge first agreed with Seyfarth that
New York law governed.    He then concluded that under New York
law, the "unfinished business doctrine" does not apply to a
dissolving law firm's pending hourly fee matters, and that a
partnership does not retain any property interest in such matters
upon the firm's dissolution.    In the Judge's view, to rule
otherwise would "conflict[] with New York's strong public policy
in favor of client autonomy and attorney mobility" (In re Thelen
LLP [Geron v Seyfarth Shaw LLP], 476 BR 732, 742-743 [SD NY
2012]); and "result in an unjust windfall for the Thelen estate,
as 'compensating a former partner out of that fee would reduce
the compensation of the attorneys performing the work'" (id. at
740, quoting Sheresky v Sheresky Aronson Mayefsky & Sloan, LLP,
35 Misc 3d 1201 [A] [Sup Ct NY County 2011]).    He further

                                 - 4 -
                                 - 5 -                Nos. 136 & 137

observed that "[s]uch an expansion of the [unfinished business]
doctrine would violate New York's public policy against
restrictions on the practice of law" and "clash directly with New
York's Rules of Professional Conduct"; specifically, the rule
generally forbidding fee splitting (id. at 740).     Accordingly,
the Judge granted Seyfarth's motion for judgment on the
pleadings.    The Judge sua sponte certified his order for
interlocutory appeal (id. at 745-746).
             By decision dated November 15, 2013, the Second Circuit
agreed with the District Court that New York law governed the
parties' dispute, and asked us to answer two unresolved questions
of New York law regarding the applicability and scope of the
"unfinished business doctrine"; specifically,
             "Under New York law, is a client matter that is billed
             on an hourly basis the property of a law firm, such
             that, upon dissolution and in related bankruptcy
             proceedings, the law firm is entitled to the profit
             earned on such matters as the 'unfinished business' of
             the firm?
             "If so, how does New York law define a 'client matter'
             for purposes of the unfinished business doctrine and
             what proportion of the profit derived from an ongoing
             hourly matter may the new law firm retain?" (736 F3d at
             225).
                             Coudert
             On August 16, 2005, the law firm Coudert Brothers LLP
(Coudert) dissolved in accordance with the terms of its
partnership agreement.    That same day, the equity partners
adopted a "Special Authorization," whereby the equity partners
authorized

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                                - 6 -                Nos. 136 & 137

            "the Executive Board . . . to take such actions as it
            may deem necessary and appropriate, including, without
            limitation, the granting of waivers, notwithstanding
            any provisions to the contrary in the Partnership
            Agreement . . . , in order to:
            "a. . . . sell all or substantially all of the assets
            of . . . the Firm to other firms or service providers,
            in order to maximize the value of the Firm's assets and
            business;
            "b. wind down the business of the Firm with a view to
            continuing the provision of legal services to clients
            and the orderly transition of client matters to other
            firms or service providers, in order to maximize the
            value of the Firm's assets and business to the extent
            practicable."
            Coudert partners were subsequently hired by several
different firms.   As of the date of the firm's dissolution, there
remained between Coudert and its clients partly performed
contracts for the provision of legal services.   When former
Coudert partners joined other firms, those firms were retained by
Coudert's former clients to conclude these unfinished legal
matters.    The client matters were completed by the new firms on
an hourly basis, with only two exceptions.
            In September 2006, Coudert filed for protection from
its creditors pursuant to Chapter 11 of the Bankruptcy Code.
Developmental Specialists, Inc. (DSI), as administrator of
Coudert's bankruptcy estate, brought 13 separate adversary
proceedings against the firms that had hired the former Coudert
partners.   These lawsuits were premised on the unfinished
business doctrine.   More specifically, DSI argued that the
defendant firms were liable to Coudert for any profits derived

                                - 6 -
                                - 7 -                   Nos. 136 & 137

from completing the client matters that the former Coudert
partners brought to those firms.    The firms moved for summary
judgment, arguing that the unfinished business doctrine did not
apply to matters billed on an hourly basis.   DSI cross-moved for
a declaration that the unfinished client matters were Coudert's
property on the day it dissolved.
            In a decision dated May 24, 2012, the District Court
denied the firms' motion for summary judgment and granted DSI's
cross-motion.   The Judge agreed with DSI that
            "[u]nder the Partnership Law, the Client Matters are
            presumed to be Coudert's assets on the Dissolution
            Date. While the Coudert Partnership Agreement could
            have provided otherwise, it does not; on the contrary,
            it confirms the statutory presumption, as does the text
            of the Special Authorization adopted by the partners
            who voted to dissolve the firm. In the absence of any
            evidence that Coudert's partners intended to exclude
            pending but uncompleted client representations from the
            firm's assets, DSI is entitled to a declaration that
            the Client Matters were Coudert assets on the
            Dissolution Date. Because they are Coudert assets, the
            Former Coudert Partners are obligated to account for
            any profits they earned while winding the Client
            Matters up at the Firms" (In re: Coudert Brothers LLP
            [Development Specialists, Inc. v K & L Gates LLP], 477
            BR 318, 326 [SD NY 2012]).
            Upon the District Court's certification, the law firms
appealed.   By order dated December 2, 2013, the Second Circuit
certified the same two questions asked in Thelen.
                                   II.
                      The Role of the Partnership Law
            Geron and DSI (collectively, the trustees) base their
claims principally on the unfinished business doctrine as

                                - 7 -
                              - 8 -                  Nos. 136 & 137

originally articulated and applied by the Jewel court in the
context of a law firm dissolution.    The doctrine derives from an
interpretation of various provisions of the Partnership Law;
primarily, sections 12, 40 (6) (the so-called "no compensation"
rule), 43 (1) (the so-called "duty to account") and 66 (1) (a).1
The trustees also rely on Partnership Law § 4 (4), which directs
that the statute "shall be so interpreted and construed as to
effect its general purpose to make uniform the law of those
states which enact it."
          The legislature enacted the Partnership Law in 1919,
thereby adopting the UPA, which was approved and recommended to
the states by the Conference of Commissioners on Uniform State

     1
      Section 12 (1) provides that "[a]ll property originally
brought into the partnership stock or subsequently acquired, by
purchase or otherwise, on account of the partnership is
partnership property"; section 12 (2), that "[u]nless the
contrary intention appears, property acquired with partnership
funds is partnership property."

     Section 40 (6) provides that "[n]o partner is entitled to
remuneration for acting in the partnership business, except that
a surviving partner is entitled to reasonable compensation for
his services in winding up the partnership affairs."

     Section 43 (1) specifies that "[e]very partner must account
to the partnership for any benefit, and hold as trustee for it
any profits derived by him without the consent of the other
partners from any transaction connected with the formation,
conduct, or liquidation of the partnership or from any use by him
of its property."

     Section 66 (1) (a) specifies that "[a]fter dissolution a
partner can bind the partnership . . . [b]y any act appropriate
for winding up partnership affairs or completing transactions
unfinished at dissolution."

                              - 8 -
                                - 9 -                Nos. 136 & 137

Laws in 1914.   Prior to the Conference's approval and
recommendation for adoption of the Revised Uniform Partnership
Act (RUPA) in 1994, the UPA had been enacted in every state
except Louisiana.   Generally speaking, the unfinished business
doctrine provides that profits arising from work begun by former
partners of dissolved law firms are a partnership asset that must
be finished for the benefit of the dissolved partnership, absent
an agreement to the contrary.   The doctrine rests on the legal
principle that because departing partners owe a fiduciary duty to
the dissolved firm and their former partners to account for
benefits obtained from use of partnership property in winding up
the partnership's business, they may not be separately
compensated.    This rule has been applied by courts in other
jurisdictions to both contingent and hourly matters.2
          Importantly, though, the Partnership Law does not
define property; rather, it supplies default rules for how a
partnership upon dissolution divides property as elsewhere
defined in state law.   As a result, the Partnership Law itself
has nothing to say about whether a law firm's "client matters"
are partnership property.   When discussing what constitutes
"property," we have explained that the
          "expectation of any continued or future business is too
          contingent in nature and speculative to create a
          present or future property interest. Although property

     2
      It is not entirely clear to what extent the post-
dissolution attorney fees at issue in Jewel were for hourly or
contingency fee matters.

                                - 9 -
                              - 10 -                Nos. 136 & 137

           is often described as a 'bundle of rights," or
           'sticks,' with relational aspects . . . the ability to
           terminate the relationship at any time without penalty
           [] cannot support a finding that a transferrable
           property right existed" (Verizon New England, Inc. v
           Transcom Enhanced Servs., Inc. (21 NY3d 66, 72 [2013]
           [emphases added]).
           In New York, clients have always enjoyed the
"unqualified right to terminate the attorney-client relationship
at any time" without any obligation other than to compensate the
attorney for "the fair and reasonable value of the completed
services" (In re Cooperman, 83 NY2d 465, 473 [1994] [emphasis
added]).   In short, no law firm has a property interest in future
hourly legal fees because they are "too contingent in nature and
speculative to create a present or future property interest"
(Verizon New England, 21 NY3d at 72), given the client's
unfettered right to hire and fire counsel.   Because client
matters are not partnership property, the trustees' reliance on
Partnership Law § 4 (4) is misplaced.   As the District Court
Judge in Geron pointed out, "[t]he purpose of [the] UPA is to
harmonize partners' duties regarding partnership property, not to
delineate the scope of such property" (Geron, 476 BR at 742
[emphasis added]).
                     The Contingency Fee Cases
           Moreover, contrary to the trustees' contentions, New
York courts have never suggested that a law firm owns anything
with respect to a client matter other than yet-unpaid
compensation for legal services already provided.   Appellate

                              - 10 -
                              - 11 -                Nos. 136 & 137

Division decisions dealing with unfinished business claims in the
context of contingency fee arrangements uniformly conclude that
the dissolved partnership is entitled only to the "value" of its
services (see Grant v Heit, 263 AD2d 388, 389 [1st Dept 1999];
Shandell v Katz, 217 AD2d 472, 473 [1st Dept 1995]; DelCasino v
Koeppel, 207 AD2d 374, 374 [2d Dept 1994]; Dwyer v Nicholson, 193
AD2d 70, 73 [2d Dept 1993]); Kirsch v Leventhal, 181 AD2d 222 [3d
Dept 1992] [Levine, J.]).
          The Appellate Division has occasionally referred to a
contingency fee case as an "asset" subject to distribution (see
e.g. Shandell, 217 AD2d at 473; Kirsch, 181 AD2d at 225).     But as
then-Justice Levine stressed in Kirsch, a former partner "is only
entitled to 'the value of his interest at the date of dissolution
. . . with interest'" (id. at 226, quoting Partnership Law § 73;
see also Santalucia v Sebright Transp., Inc., 232 F3d 293, 298
[2d Cir 2000] ["(I)n a case where a lawyer departs from a
dissolved partnership and takes with him a contingent fee case
which he then litigates to settlement, the dissolved firm is
entitled only to the value of the case at the date of
dissolution, with interest.   Stated conversely, the lawyer must
remit to his former firm the settlement value, less that amount
attributable to the lawyer's efforts after the firm's
dissolution" (citing Kirsch, 181 AD2d at 225-226)]).    The
trustees have not cited any New York case in which the law firm
was awarded the client matter itself, or any fee not earned by

                              - 11 -
                               - 12 -                Nos. 136 & 137

the law firm's own work.   This is hardly surprising since, as
already discussed, a client's legal matter belongs to the client,
not the lawyer.
           And notably, these cases have involved disputes between
a dissolved partnership and a departing partner, not outside
third parties.    In this context, statements that contingency fee
cases are "assets" of the partnership subject to distribution
simply means that, as between the departing partner and the
partnership, the partnership is entitled to an accounting for the
value of the cases as of the date of the dissolution.   Kirsch,
Shandell and other Appellate Division decisions involving
contingency fee arrangements do not suggest that law firms own
their clients' legal matters, or have a property interest in work
performed by former partners at their new firms.
                        Stem v Warren
           The trustees rely heavily on our decision in Stem v
Warren (227 NY 538 [1920]), as did the District Court Judge in
DSI.   But Stem involved claims for breach of fiduciary duty; we
did not hold "that executory contracts to perform professional
services are partnership assets unless a contrary intention
appears" (DSI, 477 BR at 333), or define unfinished client
engagements as partnership property.
           In Stem, one architectural partnership (Reed & Stem)
entered into an agreement with another architectural partnership
(Warren & Wetmore) for the purpose of "secur[ing] a contract for

                               - 12 -
                                - 13 -                Nos. 136 & 137

architectural services in the construction of the Grand Central
Station and buildings in connection therewith" (Stem, 227 NY at
542).   The agreement stated that the partnerships would "share
and share alike as firms and not as individuals the profits and
losses" (id. at 543).     On the same day, the joint venture entered
into a separate contract with the railroad company agreeing,
among other things, to jointly act as architects for the company.
It was the clear intent of the parties that the contract was to
be performed notwithstanding the death of Reed, the "executive
head" of the joint venture, if this should occur; that is, the
agreement between the partnerships contemplated that the joint
venture would survive either partnership's dissolution and that
the contract with the railroad company would be performed by the
survivors.
             The joint venture worked on the Grand Central Station
project for over seven years before Reed died.    The trial court
found that, without consent from Reed's surviving partner or his
estate, Wetmore sent the railroad company a proposed new contract
that was, in substance, the same as the joint venture's existing
contract, except that Warren & Wetmore was named as sole
architects.    The railroad company immediately terminated its
contract with the joint venture and entered into the new,
identical contract exclusively with Warren & Wetmore.
             Stem, the surviving partner, filed suit to recover one
half of the profits on two separate projects of the joint

                                - 13 -
                              - 14 -                Nos. 136 & 137

venture: the work performed pursuant to the joint venture
agreement and the contract with the railroad regarding Grand
Central Station; and the work performed on what became the
Biltmore Hotel, for which the joint venture had prepared
preliminary plans prior to Reed's death.   We determined that "the
firm of Warren & Wetmore are to be held accountable to the
plaintiff" for the profits from work on Grand Central Station
(id. at 547), but denied Stem compensation from the Biltmore
project for anything other than the value of the actual work
performed (the preliminary plans) by the joint venture before the
dissolution.
          Thus, Stem is not a case that defines what makes up the
partnership property or "assets"; it is a breach-of-fiduciary
duty case in which one joint venturer underhandedly cut a
surviving joint venturer out of a contract expressly intended
(including by the client) to survive dissolution.   We
specifically held that as a result of Wetmore's "breach of duty,"
Warren & Wetmore was liable to account to the joint venture for
the usurped opportunity.   We recited that the railroad contract
was intended to survive Reed's death3 and, from that, concluded
that the surviving members of the joint venture had a duty to

     3
      By contrast, contracts between a law firm and a client
cannot contemplate survival of the law firm's dissolution without
impermissibly infringing the client's right to terminate an
attorney at will (see Demov, Morris, Levin & Shein v Glantz, 53
NY2d 553, 556 [1981]).

                              - 14 -
                             - 15 -                  Nos. 136 & 137

complete the contract for the joint venture's benefit.   Stem does
not hold that the joint venture "owned" the railroad contract to
the exclusion of others; rather, we decided that Stem's former
joint venturers (Warren & Wetmore) did not have the right to
exclude him from the contract.   Certainly, if the railroad had
terminated its contract with the joint venture and hired a new,
unrelated firm, nothing in Stem suggests that Stem could have
pursued the new firm to recover a percentage of its profits.
                   Public Policy Considerations
          Treating a dissolved firm's pending hourly fee matters
as partnership property, as the trustees urge, would have
numerous perverse effects, and conflicts with basic principles
that govern the attorney-client relationship under New York law
and the Rules of Professional Conduct.   By allowing former
partners of a dissolved firm to profit from work they do not
perform, all at the expense of a former partner and his new firm,
the trustees' approach creates an "unjust windfall," as remarked
upon by the District Court Judge in Geron (476 BR at 740).
          Next, because the trustees disclaim any basis for
recovery of profits from the pending client matters of a former
partner who leaves a troubled law firm before dissolution, their
approach would encourage partners to get out the door, with
clients in tow, before it is too late, rather than remain and
work to bolster the firm's prospects.    Obviously, this run-on-
the-bank mentality makes the turnaround of a struggling firm less

                             - 15 -
                              - 16 -                 Nos. 136 & 137

likely.
          And attorneys who wait too long are placed in a very
difficult position.   They might advise their clients that they
can no longer afford to represent them, a major inconvenience for
the clients and a practical restriction on a client's right to
choose counsel.   Or, more likely, these attorneys would simply
find it difficult to secure a position in a new law firm because
any profits from their work for existing clients would be due
their old law firms, not their new employers.
          The trustees answer that clients do not care whether
they pay one law firm or another, so long as their legal affairs
are handled properly, and that requiring law firms to forfeit the
fees earned by their lawyers' efforts has no impact on attorneys
or clients.   We disagree for the reasons already mentioned.
Additionally, clients might worry that their hourly fee matters
are not getting as much attention as they deserve if the law firm
is prevented from profiting from its work on them.   The notion
that law firms will hire departing partners or accept client
engagements without the promise of compensation ignores
commonsense and marketplace realities.   Followed to its logical
conclusion, the trustees' approach would cause clients, lawyers
and law firms to suffer, all without producing the sought-after
financial rewards for the estates of bankrupt firms.
          Ultimately, what the trustees ask us to endorse
conflicts with New York's strong public policy encouraging client

                              - 16 -
                              - 17 -                Nos. 136 & 137

choice and, concomitantly, attorney mobility.   In Cohen v Lord,
Day & Lord (75 NY2d 95, 96 [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 [internal quotation marks omitted]).
          We reversed, holding that these financial penalties
impermissibly interfered with clients' choice of counsel -- i.e.,
"[t]he forfeiture-for-competition provision would functionally
and realistically discourage and foreclose a withdrawing partner
from serving clients who might wish to continue to be represented
by the withdrawing lawyer and would thus interfere with the
client's choice of counsel" (id. at 98).   In this regard, we
quoted approvingly from an opinion of the New York County
Lawyers' Association issued in 1943, which stressed that
          "[c]lients are not merchandise. Lawyers are not
          tradesmen. They have nothing to sell but personal
          service. An attempt, therefore, to barter in clients,
          would appear to be inconsistent with the best concepts
          of our professional status" (id. at 98; see also
          Denburg v Parker Chapin Flattau & Klimpl, 82 NY2d 375,
          381 [1993] [finding unacceptable a provision in a
          partnership agreement that "improperly deter(red)
          competition and thus impinge(d) upon clients' choice of
          counsel" by creating an incentive for a partner
          changing firms to discourage a Parker Chapin client
          from coming along]).
          Finally, the trustees seek to entice us to hold in
their favor on the ground that a law firm may always avoid the

                              - 17 -
                                 - 18 -                    Nos. 136 & 137

unfinished business doctrine by placing a well-crafted Jewel
waiver in the partnership agreement.          This suggestion fails to
consider the possibility that classifying clients' pending hourly
fee matters as firm property may lead to untoward unintended
consequences.    For example, the trustees, as noted before, limit
their sought-after recoveries to client matters that remain
unresolved as of the date of a law firm's dissolution.         As
Seyfarth pointed out, though, if a client's pending matter is
partnership property, why doesn't every lawyer whose clients
follow him to a new firm breach fiduciary duties owed his former
law firm and partners?   In the end, the trustees' theory simply
does not comport with our profession's traditions and the
commercial realities of the practice of law today, a deficiency
beyond the capacity of a Jewel waiver to cure.
            Accordingly, the first certified question should be
answered in the negative, and the second certified question
should not be answered as it is unnecessary to do so.
*   *   *    *   *   *   *   *     *      *    *   *   *   *   *    *    *
For Each Case: Following certification of questions by the
United States Court of Appeals for the Second Circuit and
acceptance of the questions by this Court pursuant to section
500.27 of this Court's Rules of Practice, and after hearing
argument by counsel for the parties and consideration of the
briefs and the record submitted, first question answered in the
negative and second question not answered as unnecessary.
Opinion by Judge Read. Chief Judge Lippman and Judges Graffeo,
Smith, Pigott, Rivera and Abdus-Salaam concur.

Decided July 1, 2014

                                 - 18 -