For an individual or a team moving to a competitor there is a sensitive balance to be struck between, on the one hand, complying with their continuing obligations to their current firm, and on the other hand, the steps they can take in preparation for their move. Careful consideration needs to be given to the restrictive covenants, notice and gardening leave provisions (amongst others) and the activities which they seek to restrict. Generally, the safest starting point is to assume that the restrictive covenants are enforceable, however it may be possible to challenge the validity and enforceability of restrictive covenants if they are poorly drafted or if they are too broad.

Practical considerations when moving to a competitor firm either as a team or as an individual will include:

  • In the case of a team move, how the move should be staged, particularly if the restrictive covenants are expressed in different ways for the senior equity partners, the fixed share partners and the employees forming the team.
  • Should the moving individual or team tell the firm they are joining about the restrictive covenants and provide them with copies?
  • How should the move be communicated and how should members of the team conduct themselves in the lead to the move?
  • What information can and cannot lawfully be shared with the new firm without breaching confidentiality obligations and other duties, such as the duty of good faith, to the current firm?
  • How does the person leading the move bring in other members to the team and how does a moving individual or team get the new firm to target people whom they know are potentially good candidates without breaching non-solicitation and non-dealing of staff covenants?
  • What are the implications of any fiduciary duties owed to the firm?
  • Where the current firm seeks undertakings, in what form should these be given?

Inevitably a move to a competitor firm is a difficult and sensitive issue for all parties involved, particularly for the partner leading the move. There is no doubt that individuals moving to a competitor feel vulnerable because they may be in conflict with the firm where they have spent a number of years and gained a number of colleagues and friends. Emotions often run high. We have significant experience in all types of team move scenarios and can provide independent legal analysis and a coherent strategy.

How Fox & Partners can help…

  • Advise you and other members of the team on your legal obligations to your current firm and on the best way to manage your move to a competitor in light of those obligations. This includes formulating a strategy, advice on the practical considerations in relation to the team move scenario and advice on the likely enforceability of the restrictive covenants and how to work around them.
  • Guide you on how the move should be communicated to your current firm.
  • Negotiate on your behalf with the firm you are leaving to agree the terms of your exit or guide you through the process whilst remaining in the background.
  • Advise you on the scope of any undertakings requested from your current firm and advise on the form of undertakings to be given.
  • Engage in discussions with your new firm in order to manage its expectations and ensure the new firm is aware of the overall strategy for extricating the team.
  • If departure on an amicable basis is not possible, act robustly on your behalf in the event that the matter becomes litigious.

Please call us on 020 7618 2400