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Conflicted Out? How Law Firms Can Refer Employee Matters They Can’t Take
When a law firm can't provide employment counsel to an individual because of a conflict or practice focus, lawyers can refer the matter responsibly
By David Perla
Key takeaways
Law firms routinely receive requests for employment counsel from individuals they can’t represent due to conflicts or other factors
When a firm that's conflicted refers the employee to independent counsel, it benefits the employee and the firm’s relationships and reputation
Lawyers should prioritize referrals to firms that are trusted, responsive, and non-competitive
Every law firm lawyer has likely had the experience dozens of times: a call or an email comes in from a friend, family member, or former colleague or client with an urgent need for employment counsel. The caller has just received a separation agreement, or perhaps a job offer with an unusual non-compete or approach to equity vesting. Time is short, money is on the line, and the caller needs either help or a referral. Even highly educated, sophisticated professionals don’t know how to get the help they need.
Unfortunately, the lawyer is often unable to help the caller, because most large and medium-sized law firms provide counsel to businesses that employ professionals, not individual employees. Often, the lawyer can’t even make a referral, as many plaintiff-side employment firms only take on big cases with significant fees attached and just aren’t built to provide urgent counsel on an ordinary course termination or offer. So the lawyer can’t provide counsel and frequently can’t make a referral to a firm that will actually accept the matter.
In the article below I offer a referral plan to help law firm lawyers who receive calls for employment counsel they cannot provide, including understanding conflicts, the impact of turning away requests without a referral, how referrals to employment counsel benefit law firms, and what to look for in a referral partner when law firm lawyers receive calls from individual employees seeking employment counsel.
Why law firms turn away individuals seeking employment counsel
When law firm lawyers receive calls from individual professionals seeking help with an employment matter, there are multiple reasons they say no.
Conflicts are chief among the reasons law firm lawyers at large and medium-sized firms turn individuals seeking employment counsel away. For example, it would not be surprising for an employee of a name-brand technology company employer to be turned away by a large firm with dozens of practice areas and international offices representing global clients on the basis of a conflict, whether because the firm already represents the name-brand technology company employer in at least one jurisdiction, creating a direct or imputed conflict, or because the firm has defended the employer before, creating a former client conflict. And even if the firm doesn’t already have a conflict from current or past representation of the name-brand technology company employer, most large law firms simply will not represent individual employees against companies in employment matters, as a matter of firm policy. Even for those firms willing to represent individual employees, cost nearly always precludes representing all but the most highly paid executives. In other words, in nearly all instances, large and mid-size law firms simply cannot represent professionals and other employees.
Even if law firms don’t have real or business specific conflicts with representing employees, it is rare to find a law firm with an employment practice that has an appetite for the type of counsel needed by a professional or other employee under pressure to sign a severance or offer document. Even employment law firms with practices that serve employees often choose, on the basis of their practice focus and firm economics, to represent employees only when they have litigation claims with significant potential monetary recoveries, or to charge for their counsel by the hour at rates that are unaffordable for most professionals.
Table 1: Why law firms turn away individuals seeking employment counsel | ||
Reason | Example | Basis |
Direct conflict | Caller is adverse to a current client | Rule 1.7 |
Imputed conflict | Another office represents the employer | Rule 1.10(a) |
Former client conflict | Firm defended the employer before | Rule 1.9 |
Positional conflict | Management-side firm won't take employee work | Firm policy |
Practice focus | Matter outside the firm's work | Firm policy |
Economics | Matter too small for firm | Firm policy |
What happens when law firms decline to make an employment counsel referral?
Impacts on employees: While there are no exact data for the number of employees who cannot find counsel or the economic impacts of this gap in representation, some telling data points paint a picture of clear need and consequences.
Employees accept what’s offered without negotiation: According to a 2021 study published in the University of Chicago’s Journal of Law and Economics, just 10% of employees negotiate their non-competes.
Employees may leave money on the table: Research in the Journal of Legal Studies in 2024 found that “employees tend to believe that even clearly unenforceable non-competes are enforceable, including their own”; 69.2% of workers with non-competes in states that don’t enforce them believed theirs was enforceable, and the authors assert that “likely causes employees to forgo better job opportunities”.
Logic (and the federal government) suggest exit agreements call for counsel: Federal law recognizes the stakes when employees neglect to engage counsel: before an employee 40 or older can release age discrimination claims in a severance agreement, the employer must advise them in writing to consult a lawyer.
Employees may go without counsel even in court: According to a 2020 study, about 20% of employment civil rights cases in federal court (1999–2018) involved at least one pro se party.
Impacts on law firms: For the lawyers and law firms that decline to represent or refer an individual professional seeking employment counsel, the impacts are implicit: the person asking for help is a relationship that is tied to a partner, a client, or a potential client, and the response to his or her request can either add to or detract from that relationship. However incrementally, the calls and emails asking for help or a referral that are refused reflect badly on the firm and detract from relationships. Conversely, good handoffs build goodwill and cultivate relationships. This matters: over the course of my career, I’ve seen innumerable times the simple truth that people remember and reward introductions to people who can help them solve problems, and this is certainly true when law firms that can’t represent individual employees refer them to employment law firms that can.
How to refer an employee matter to another law firm
There are five steps to consider when a lawyer receives a call or email from an individual asking for an employment counsel and needs to determine how to respond. These five steps, spelled out in the table below, include keeping any details confidential; recommending independent counsel if the employee is adverse to the client; referring the individual to a law firm that represents employees only and that does not compete for corporate work; making a warm introduction promptly given the tight timeframes faced by most individuals negotiating employer documents; and finally, confirming the handoff.
Table 2: Five steps to refer an employee matter to another law firm | |
Step 1 | Keep what you hear confidential (Rule 1.18). |
Step 2 | If the employee is adverse to a client, say only that they should get independent counsel (Rule 4.3). |
Step 3 | Refer to a firm that represents employees only, so it won't compete for your corporate work. |
Step 4 | Make a warm introduction quickly; deadlines in severance and charge-filing timelines can be short. |
Step 5 | Confirm the handoff happened, without receiving confidential details back. |
What to look for in a referral law firm for employee matters
When lawyers refer employee matters to another law firm, the choice of that firm matters not only to the client but also to the lawyer. For very obvious reasons, lawyers get no credit for good intentions if the firm to which they refer employee matters doesn’t provide quality counsel or if the referral backfires in some way. Thus, lawyers looking for a referral law firm for employee matters should follow a simple checklist:
Quality counsel: Staffed by experienced employment lawyers, ideally with past experience representing employers as well as employees
Employee representation: Focus on representing employees so that the referral does not create a future competitor
Responsive: The firm should have a track record and processes for prompt response
Secure document intake: The firm should offer individuals a secure process for uploading their employment documents
Published, transparent fees: Since many individual employees cannot afford an open-ended hourly fee engagement, firms with published fees are preferable
Licensed in the employee’s state: The firm should be licensed in the individual’s state, or have in place arrangements to handle the referred matter.
FairPlay Law was founded as an AI-native employment law firm with a focus on employees with a clear understanding of the criteria that law firms should consider when they refer employment matters. FairPlay is led by experienced employment lawyers who have worked extensively on both sides of the table; it’s founders have large law firm and corporate in-house experience, and the firm is focused on representing employees and will not compete with large and medium-sized law firms for business; it is built on an AI platform that enables us to respond quickly; and our fees are transparent and deliverables-based.
FAQs: How to Refer Individual Employment Counsel Requests Your Law Firm Can’t Take On
Can a law firm refer someone it can't represent because of a conflict?
Yes, a law firm can refer someone it cannot represent because of a conflict, as long as
1) it clearly and simply declines representation without providing more information;
2) it doesn’t offer anything that could be construed as counsel;
3) acts in good faith in making a sound referral;
4) it does not use information concerning the employee in its representation of its own client.
Does a referral create a duty to the referred person?
A referral does not create a duty to the referred person, although the lawyer owes the caller confidentiality as a prospective client under Rule 1.18, and it is helpful to state when making the referral that no attorney-client relationship is created by the referral.
What information should a referring firm share with the new lawyer?
When referring an individual employee to a new lawyer, the referring lawyer need only provide basic information concerning the name, contact details, and a brief description of what type of employment counsel is sought. In turn, the referring lawyer should expect a simple confirmation back that the referral has been received.
Conclusion
Law firm lawyers have several reasons to refer requests for employment counsel they can’t provide, among them relationships and reputation.
FairPlay Law provides employment counsel for the individual clients that large law firms can’t represent. Law firms seeking a referral path for employee matters can make a referral online at fairplay.law or via email at david.perla@fairplay.law.
Attorney Advertising. Published by FairPlay Law, PLLC for general information only; not legal advice, and no attorney-client relationship is formed by reading or responding to this post. Prior results do not guarantee a similar outcome.