When a partner retires, resigns or leaves in less than amicable circumstances, the seemingly innocuous task of announcing that departure can be highly contentious. It can have both legal effects as well as setting the tone for the any negotiations with the individual who is leaving.
Departing professionals are often focused on their reputations and an ill-thought through announcement can become a real barrier to agreeing departure terms and can squander an important bargaining chip.
We set out below a few of the practical and legal considerations that you should consider when considering an announcement about a partner departure, both internally to staff and partners and externally to clients and other interested third parties.
Timing of the announcement
In most cases it is best not to make any announcement about a partner departure until agreement has been reached as to the terms on which the partner will go. A premature announcement would be particularly inappropriate if it gives the impression of a pre-determined outcome in any process taking place around the departure, e.g. a disciplinary hearing.
Even telling staff that a partner’s departure is or may be under consideration is also likely to be highly contentious. However, if a partner is out of the office or not working to his/her usual pattern there is a danger that employees will engage in damaging speculation if there is a vacuum of information.
Contents of the announcement
Before agreeing or deciding the contents of any announcement, it is important to check the provisions of the partnership or members’ agreement. The categorisation of a departure may impact on the financial terms of the exit, so it is important that the firm adopts a joined-up approach between those handling the legal aspects of the departure and those handling the communications aspects of the departure.
Don’t assume that presenting any absence as being for a reason other than their departure (such as, for example, that person being off sick or on holiday) will be preferable to the partner in question. It’s best to first tell the individual what you intend so that they can air their views.
If you agree that staff will be told a certain “cover story” it is important that this is not deviated from. It can be very damaging if one message is being communicated officially, whilst talking informally about a completely different version of events. This needs to be clearly communicated to those in the know.
It is often the case that, in relation to an amicable exit, a firm is prepared to agree the wording of the announcement with the departing partner. However it is important that the firm retains ultimate control over an announcement. Departing professionals are, in our experience, very sensitive about the most minor of errors being made in relation to the contents or timing of the announcement when the detail has been agreed. In some cases, we have seen a huge amount of management time being wasted over disputes regarding amendments to the agreed wording which are not substantive. We therefore advise agreeing the sentiment of the announcement but not commit to anything prescriptive regarding the wording or indeed the timing of the announcement.
In an amicable departure it is relatively common for partners to be permitted to provide the first draft of their own reference. There is clearly a risk attached to this, in that what the individual wishes the firm to represent might not be acceptable to the firm. In addition, the firm has a duty of care to the person to whom it is providing a reference and can be sued for negligence if it provides an inaccurate reference. However, it can be an inexpensive way to generate goodwill with the departing partner.
If a departure is acrimonious and/or no agreement can be reached as to the form of an announcement the text should be kept brief and factual to avoid creating any new claims e.g. for defamation (see below).
Considering impact on other partners
Where there is a performance-related departure, or in other contexts where the firm does not want to encourage similar behaviour by others at the firm, the impact of the leaving announcement on those who are left behind should be considered. If it is important that employees do not consider the departing partner’s conduct to be acceptable, you might consider making a somewhat ambiguous announcement. This must stick to the facts and not make any defamatory remarks about the departing partner, but could be framed so as not to be as cordial or flattering as one might expect in the case of an amicable parting. For example, by leaving out any thank you for the contributions to the firm. This will usually imply to others within the firm that a departure was not entirely amicable.
Making External Announcements
A key aspect for most departures in the professional practices sphere will be to ensure that the impact of the announcement on clients of the departing partner’s practice is considered. The priority for the firm will usually be to retain those clients. Typically a partner departure is announced towards the end of any negotiation process, which invariably involve discussions as to how the departure will be presented to the partner’s client following. The firm might want to approach key clients separately prior to any official announcement. Less important clients should be promptly contacted once the terms of the announcement are agreed, as the worse case scenario is for a client to first hear about a partner’s departure on the grapevine or in The Lawyer, for example.
Aside from any legal risks, it is rarely in a firm’s interests to make derogatory statements as to a former partner’s abilities or performance, as this calls into question the firm’s judgment in recruiting the individual in the first place.
It is of course very important not to make any statements which are incorrect or defamatory and might damage the reputation of the departing partner. In law, a defamatory comment is one that tends to lower the individual in the estimation of right-thinking members of society generally. If the departing partner has complained of discrimination an unnecessarily vindictive announcement might land the firm with a victimisation claim in an employment tribunal.
Announcements where there is litigation in prospect
It is important to remember that the firm has an interest in the departing partner finding a new role or partnership position as quickly as possible since this will reduce any losses that the departing partner could potentially recover from the firm if successful in a claim.