California Has Some Unfinished Business with Law Firm Bankruptcies

When partners leave a failed law firm, should their new firms reap the profits of client matters they take with them? Or does the profit belong to the fallen firm’s estate?

An appeals court in New York has already decided on the matter , ruling that hourly fees earned on client matters are not the property of their old firm. But out there in sunny California, courts are still grappling with the issue.

The 9th Circuit Court of Appeals on Wednesday sought some guidance, posing the question to the California Supreme Court and asking it to put the matter to bed ...