Case raises ethics questions about attorneys who switch firms

An attorney who worked at a well-known Kentucky-based firm is accusing his former employer of anticompetitive practices, claiming in a lawsuit that the firm has imposed unreasonable stipulations on how he can move forward with cases where he works now.

The lawsuit raises questions about the ethics of noncompete agreements in law and who owns the relationship attorneys form with their clients.

In early June, an attorney who previously worked for Isaacs & Isaacs Personal Injury Lawyers, which is based in Louisville but serves clients throughout Indiana, filed a lawsuit in the U.S. District Court in the Western District of Kentucky against the firm for enforcing “take-it-or-leave-it” employment agreements he said were meant to “trap attorneys inside the firm and to punish, financially and reputationally, any who leave,” according to the complaint.

The complaint states that the stipulations included an $8,000-per-client liquidated-damages penalty and a $6,000 case acquisition cost, which several attorneys told The Lawyer they were surprised to see.

The lawsuit, Alex R. White, PLLC and Nicholas Alexiou vs. Isaacs & Isaacs P.S.C., states that the terms violate the ethics rules of every state in which Isaacs practices.

Splitting fees

According to the lawsuit, Isaacs and Isaacs imposes hefty monetary penalties on attorneys who choose to leave the firm and makes it difficult for attorneys to inform their clients that they are leaving and where they are going.

In addition to the case acquisition and liquidated damages costs, employment agreements, which the plaintiff signed annually, also laid out what portion of attorney’s fees Issacs is entitled to if clients followed the attorney to a new firm.

In the case of Nicholas Alexiou, who filed the lawsuit in Kentucky courts alongside his current employer, Alex R. White PLLC, that amount was 70%.

Alexiou did not respond to The Indiana Lawyer’s request for comment. Representatives for Isaacs & Isaacs, however, refuted the lawsuit’s claims.

“Isaacs and Isaacs filed a lawsuit one year ago against this former employee for deceptively working to poach clients before his departure,” said Robyn Smith with the Law Firm of Robyn Smith, who represents the Isaacs firm in the earlier lawsuit. “His filing a countersuit now is a desperate ploy to misdirect away from his unprofessional conduct.”

Smith filed a lawsuit in June 2025 on behalf of the firm, claiming Alexiou notified clients of his impending departure from Isaacs & Isaacs before first alerting Isaacs & Isaacs and attempted to persuade clients to follow him to his new firm. The Isaacs & Isaacs firm claims Alexiou’s actions violated his contractual agreement with the firm.

That case is still pending in Jefferson County, Kentucky.

Alexiou’s lawsuit against Isaacs & Isaacs claims that the firm has sued as many as five former attorneys and their new employers in the past 18 months.

“That a law firm with fewer than thirty attorneys working in a particular market would sue five associate-level attorneys on their way out the door is unimaginable,” the lawsuit states.

Ethics opinions in both Indiana and Kentucky strongly recommend that a departing attorney and his or her law firm issue a joint communication to the attorney’s clients explaining the departure to both provide clarity to clients and give them a choice as to whether they stay with the firm, follow the attorney or hire a completely different representative for their legal matter.

And while both Indiana and Kentucky bars provide ethical guidelines for the legal profession on how attorneys are expected to divide case fees with previous employers, the situation becomes more complex for personal injury lawyers.

For many law firms who bill clients on an hourly basis, fees can be divided based on billing records, according to Paul Vink, an attorney with Bose McKinney & Evans LLP and chair of the firm’s litigation group. If a client chooses to follow an attorney to a new firm, most law firms can easily determine when billing at the old firm ends and billing at the new one begins.

But at personal injury firms, pay is “a little more complicated” because of contingency fees, Vink said.

Contingency fees at personal injury firms are built on the assumption that most clients seeking personal injury legal services do not have the money to pay an attorney by the hour. The firms typically operate on the principle that attorneys don’t get paid for their work until a case is settled.

“You have somebody who may have worked for six months on a case, [and] they haven’t been paid anything by the client because the case hasn’t been resolved yet,” Vink said. “Then they leave, and … if the case settles a month later at a new law firm, it wouldn’t be fair for the new law firm to get everything because a bunch of the work was done at the old law firm.”

In these situations, attorneys and law firms typically enter into a negotiated agreement specifying what percentage of a settlement law firms receive once a case is settled. These agreements often vary by case, Vink said.

Ethical guidelines

It’s the doctrine of quantum meruit — or preventing unjust enrichment by determining the value of work performed — that informs the division of those fees, said Betsy Greene, partner and personal injury attorney with Greene & Schultz Trial Lawyers.

“If you have done a whole bunch of work on a case, and then all of a sudden, the client fires you and goes someplace else, you get paid for that work that you did,” Greene said. “That’s the bottom line.”

Quantum meruit also applied to personal injury cases, where the division of fees comes down to how much work was performed at the first firm versus how much work was done at the new firm.

The allegations laid out in the Isaacs & Isaacs lawsuit are not new, Greene said, pointing to past disputes that could inform the path this case goes down.

In 2014, the Indiana Supreme Court disciplined attorney Karl Truman for a separation agreement he asked employees to sign that included provisions for dividing attorney fees if attorneys left the firm and whether attorneys could contact clients upon their leaving.

Truman was ultimately disciplined for filing a complaint against a former employee for notifying clients of their departure from the firm. The Supreme Court cited Indiana Rules of Professional Conduct Rule 5.6 to conclude Truman’s separation agreement restricted the rights of an attorney to practice at another firm upon leaving his firm.

The same rule is found in Kentucky Rules of Professional Conduct Rule 3.130(5.6).

Indiana Rules of Professional Conduct Rule 5.6 is “for the protection of both lawyers and clients,” the Supreme Court wrote in the Truman disciplinary case.

Ultimately, clients have a right to choose who represents them in a legal proceeding, and that means they can follow attorneys to new firms if they wish.

“Clients always have the choice: Do they follow their lawyer to a new firm, or do they stay with the old firm?” Vink said.•