Selling Your Practice Responsibly By Jason V. Morgan, PRP
Under the retired Code of Ethics for Parliamentarians, it was difficult to sell a parliamentary practice when retiring or moving away from local clients. Potential buyers would be concerned that paying for a practice would mean impermissibly giving something of value to someone for recommending their services. This limited the potential for the profession to grow. But under the newly adopted Code of Professional Responsibility for Parliamentarians, parliamentarians are explicitly allowed to purchase a parliamentary practice. This change could be seminal. Parliamentarians now have more incentive to grow their practices, build relations with clients and colleagues, and develop practices, procedures, contacts, and other tangible and intangible assets that can be packaged for sale to parliamentarians seeking to quickly expand their own practices. This means that parliamentary practices are likely to become more professionalized, thus creating value for clients and to new and potential parliamentarians alike. Parliamentarians have new opportunities to invest or earn material reward, but they also face new risks. Because this is a new provision, and because parliamentarians rarely buy or sell their practices, understanding how to navigate these risks is vital. The clause to allow a parliamentarian to pay for the purchase of a parliamentary practice was inspired by the American Bar Association’s (ABA) Model Rules for 4
National Parliamentarian • Spring 2021
Professional Conduct, Rule 1.17. Under the ABA rules, a lawyer may sell or purchase a law practice if (1) the seller ceases to engage in the private practice of law in the area or jurisdiction in which the practice has been conducted, (2) the entire practice is sold to another lawyer or law firm, (3) the seller gives written notice of certain client rights to each of the seller’s clients, and (4) fees charged to clients are not increased by the sale. Although the Code of Professional Responsibility is less detailed than the rule that lawyers follow, parliamentarians should follow similar practices to protect their clients and to protect themselves: First, when buying or selling a parliamentary practice, the seller must cease to practice in the area where parliamentary services have been provided. This could be a geographic area or an area of service. For example, a seller who is moving to a new state, shifting from serving homeowners associations to serving charitable nonprofits, or retiring from paid parliamentary practice altogether would likely have no difficulty showing that the parliamentary practice sale was legitimate and not just a cover for a prohibited scheme in which clients are developed and then sold like commodities. Second, the parliamentarian selling the parliamentary practice must evaluate potential buyers to make sure they are
