Butler Williams & Skilling Blog

Non-Solicitation Agreement During Merger Talks May Be Useless

When firms enter into merger discussions, the smaller firm may wish to protect itself with a non-solicitation agreement to prevent the larger firm from using the merger negotiation as a pretext for poaching members of the smaller firm.  In a case arising from a failed law firm merger, a New York judge ruled last week that non-solicitation agreements, though common, are unenforceable because they restrict the right of lawyers to work where they want.  Judge Kenneth Fisher ruled that a non-solicitation agreement entered into in 2007 between legal behemouth, Nixon Peabody and a smaller law firm, Taylor Wessing, was unenforceable.  The two firms agreed not to hire from each other for two years.  After the merger negotiations collapsed, Nixon Peabody hired a dozen Taylor Wessing partners.