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Pierce v. Morrison Mahoney LLP

897 N.E.2d 562 (2008)

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Pierce v. Morrison Mahoney LLP

Massachusetts Supreme Judicial Court

897 N.E.2d 562 (2008)

Facts

The partnership agreement of law firm Morrison Mahoney LLP (Morrison) (defendant) allocated to each partner annual partnership-interest credits (APICs) based on the partnership’s annual net worth. Partners who voluntarily withdrew from the firm forfeited APICs payments if they competed with Morrison after departing. When this forfeiture-for-competition provision was challenged, Morrison adopted an amended agreement that deleted the provision. Under the new agreement, partners who voluntarily withdrew would forfeit their APICs regardless of whether they competed with Morrison after departure. Joel Pierce, John Davis, Elizabeth Fahey, Mitchell King, and Alice Mann (the departing partners) (plaintiffs) withdrew from Morrison and continued to practice law at different firms; none had attained retirement benchmarks, which were defined in the agreement as having reached age 60 or been a partner for 20 years. The departing partners sued Morrison for their APICs payments. The court held that the amended partnership agreement violated Massachusetts Rule of Professional Conduct (RPC) 5.6 and ordered Morrison to pay APICs to the departing partners. Morrison was granted direct appellate review.

Rule of Law

Issue

Holding and Reasoning (Cordy, J.)

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