The Challenges and risks involved in Moonlighting

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So what's the harm? Well, even I, someone predisposed to look askance at the practice, was surprised and alarmed when researching this piece by the amount of damage a lawyer can do to his or her career by engaging in this practice. The bottom line is that moonlighting can cost you your career, your fortune, and your livelihood. Stop, look, and listen!

First of all, let's define terms. Moonlighting in the classic sense means working for more than one employer (or for yourself while simultaneously working for an employer). This is something that law firms are particularly sensitive to. Most have policies forbidding the practice outright. Some may indicate that this is a condition for automatic termination. There are many reasons for this, each as valid as the last.

Moonlighting is a Huge Potential Liability for Your Firm.

By virtue of a number of statutory and common-law principles, your firm is potentially on the hook for malpractice for any work you complete, even if you procure and conduct the work on your own. Of course, the particulars vary by jurisdiction, but there have been several high-profile cases in a variety of jurisdictions over the last 10 years that have sent firms scurrying to ensure their policies against this practice are as airtight as possible. Not only is your own potential malpractice a worry, but conflicts are also a gargantuan concern.

Conflicts: Real, Potential, and Strategic

Firms expend extensive resources to ensure that any potential conflict between clients is identified and dealt with early and in conformance with professional ethics and applicable law. You representing a client on your own means, almost by definition, that your client has not been through your firm's conflict-check system.

Even in a circumstance where your moonlighting client may have coincidentally gone through that check, the client most likely is not on the firm's client roster, and thus new matters cannot be checked against the matter. On the most banal level, how do you think your firm will react if it turns out a $10 million book of business was lost because that plum of a client discovered it was adverse to some piddling $100,000 fee you, as an associate, took on your own without notifying the firm? If you think this has not and cannot happen, perhaps you are too naïve to practice law.

Also, you are likely not aware of the firm's entire set of "issue" or "policy" conflicts. Certain clients are very sensitive about positions their attorneys may take in other cases. Lots of blood, sweat, and tears get spilled by partners trying to work out all the conflicting needs of their various clients. Don't come in and tilt that apple cart, or you are, at the very minimum, going to gain for yourself far more negative attention than your career can likely bear.

Do Not Think You Can Escape Personal Liability if Things Go Wrong.

Consider that in the "unlikely" event that you are faced with a malpractice claim from your moonlighting client (regardless of whether you have actually committed malpractice), your firm will fight like hell to ensure that its insurance is not on the hook. Do you have your own insurance? I didn't think so.

Furthermore, there are cases that support the principle that a law firm can pursue you for any damages it sustains. (Remember the $10 million example above?) You might think that "no one can squeeze blood out of a turnip." However, I can assure you that if you think your firm job is stressful now, wait until the full force of its collective legal expertise is being brought against you. Smile! Your career is now in jeopardy.

Professional Ethics and Suspension from the Practice of Law

If the real threat of losing your job and being on the hook for a malpractice claim all by your lonesome without insurance is not incentive enough to make you eschew that "hot" chance to practice law on the side, consider disbarment.

Depending on how clearly you handle the representation, you could face disciplinary action for misrepresentation and fraud. There are real cases on the books of associates being suspended for precisely this because (in the particular facts I've seen) they were not scrupulous about never using firm letterhead and firm phone lines for conducting their "secret" representation.

The bottom line is moonlighting is fraud and misrepresentation to at least one entity, if only your own firm, regarding which some jurisdictions have found duties—duties that can be broken at your peril.

Moonlighting "Lite"

Moonlighting can, of course, take other forms than merely practicing law on the side without your firm's knowledge. You could take a second job unrelated to law or start your own business. At the very least, you should consult your firm's policies with respect to the same—and it does have a policy covering this, I have no doubt.

There are principles of law that state that work performed during office hours and on company premises belongs to the company. This is obviously something to think about if your moonlighting escapade involves creative work.

The best course of action is to make the appropriate partner aware of your endeavor so that the firm is aware of this possibility. Of course, nearly all non-shareholders at firms are employed on an at-will basis. The firm that discovers through other means that you have your own gig on the side may decide that it is simpler to fire you than to figure out, after the fact, whether your particular endeavor conflicts in any way with the firm's clients' interests. Therefore, it's best to clear these issues ahead of time.

Helping Out Your Dear Aunt Harriet

Even pro bono work that you conduct on behalf of a family member that you are absolutely sure could never conflict with any of your clients should and must be opened as a file in your firm. The matter should go through conflicts and get sign-off from the appropriate partner or committee that handles such matters.

Most lawyers have difficulty escaping working on behalf of a family member at least once in their careers. This is understandable. What is not understandable is getting involved in a small matter and then belatedly realizing the case conflicts tangentially with a firm client. Make it official, please.

If this short article accomplishes nothing else, I hope it has at least dispelled the notion that moonlighting is a harmless side interest that an attorney can pick up and set down without risk.

If you would like more advice about advancing and succeeding in the law firm world, contact Pete Smith at 415-568-2201 or psmith@bcgsearch.com, or surf over to www.bcgsearch.com/pete_smith.html for further information.

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