Chapter 11

Protection of Lawyers’ Goodwill



The providers of all professional services rely heavily on intangible rights such as goodwill to compete for clients and those providing legal services are no exception. Lawyers try to maintain client relationships and promote awareness of their name and reputation. It is also important for them to maintain control of confidential information, know-how and databases. These are the assets upon which the business of law depends.

This chapter deals with the extent to which the law permits lawyers to impose contractual duties or enforce other legal rights to protect the intangible assets which underpin their competitive position. Restrictive covenants which apply after termination, binding upon partners and employees, are central to that protection but the practical application of covenants is often uncertain. There is a tension between the reluctance on the part of the courts to enforce agreements which limit economic activity or appear unfair to one of the parties on the one hand, and the principles that legal duties should be enforced and property rights protected on the other.

From the starting point of the intangible rights that may at law be protected by restrictive covenants, this chapter deals with the limits of enforceability. There follows a consideration of the various other sorts of enforceable duties and obligations which may be agreed or implied. The chapter then examines the specific cases in which the courts have applied the general principles to lawyers. The cases chart the development of the law as it has been applied to lawyers. This historical perspective is important but it must be borne in mind that modern cases relating to other professions may be more significant than those relating to lawyers in the early twentieth century. Finally the chapter considers specific issues which are likely to arise for lawyers in the protection of intangible property.