The art of discharging employees

by David J Bilinsky

Anyone can see the road that they walk on
is paved with gold
It’s always summer
They’ll never get cold
They’ll never get hungry
They’ll never get old and grey...
They wanted the highway
They’re happier there today

Words and music by Tony Scalzo
Recorded by Fastball

Your partner comes into your office following a meeting with one of your associates. She gives you “that look” and you and she both know that you are just avoiding dealing with the inevitable. Despite all good intentions and mentoring, one of your associates is, unfortunately, just not “fitting in”. It is not so much a problem with their work or anything in particular, as it is a sense that they seem to have a different focus or feeling for your and your firm’s work. The associate is bright and energetic and you believe they have a promising future in law; it is just that their path doesn’t seem to run in a parallel direction with yours.

So, having decided that the time has come, you must now be the one to break the news to the associate. How do you do so in a manner that is both ethical and compassionate? How do you go about dividing up the files for the clients for whom the associate acted? How do you handle unbilled time and disbursements on files that may go with the associate? What if the associate was on an incentive compensation scheme--how do you handle the present disbursements and future division of revenues on files that are as yet uncompleted? What about the liability insurance covering the associate for which the firm has paid? What if the associate committed an act of potential negligence that may be the subject of a claim? What about all the computer precedents that the associate helped develop--do they have a right to take a copy with them? What about the fact that you heard an unsubstantiated rumour that the associate may have been involved with drugs or other illegal acts? And to just complete the mix, what if the associate might feel that they are being let go simply because a client complained about the associate’s (alternate) lifestyle? Could this land you and the firm in the middle of a messy human rights complaint, in a wrongful dismissal lawsuit and before the Law Society over a complaint of unprofessional conduct? Let’s examine the advice given by Joe Coutts, an employment lawyer who handles these types of cases and Felicia Folk, the Practice Standards Advisor of the Law Society:

• First, have a meeting with the associate. Don’t inform the associate in a letter, but have a letter written to serve as a written confirmation of the ending of the relationship. It is a good idea for this meeting to have been the last in a series of meetings where the expectations of the firm were clearly communicated to the associate and the associate given the opportunity to respond and if appropriate, improve or change. Hopefully the firm has written performance evaluations on file that document these earlier meetings and concerns, and records that these were discussed with the associate. This reduces the shock value of the news as the associate would clearly know that they are not fulfilling the expectations placed on them by the firm.
• Discuss with the associate why the termination is taking place. A termination is a traumatic time for everyone and preserving the associate’s self-worth stands you and the firm in good stead. Emphasise the positive strengths and skills and counsel the associate to look for a different practice or clientele that would be served by those skills.
• Emphasise the reason(s) for the termination. Don’t fuddle, beat around the bush or obfuscate. Be clear. If you had a good working relationship with the associate, emphasise this. If the firm is willing to provide assistance to the associate, put that on the table. Decide before you call the meeting if this is going to be a termination for cause or one involving a severance package.
• If the meeting turns angry or hostile, so be it. That is an expected human reaction. However, before terminating the meeting, make it clear that you are open to answering any further questions or resolving outstanding issues in due course. Emphasise that despite the termination, the firm will fulfil all its obligations to the associate and in turn, the firm expects the associate to reciprocate in kind.
• On the division of files, recall that the right of any file is that of the client and not of any lawyer. On any files for which the associate was primarily the contact person or person handling the file, the client is to be sent a letter advising them that they can have the file stay with the firm, go with the associate or go to any other lawyer of their choice. The firm does have the right not to release the file until all outstanding fees and disbursements are paid. Accordingly, all files which will be leaving the firm should be billed. If any files are leaving with a promise to pay on the conclusion of the file, reduce this to writing and word it as a proper professional undertaking. This is especially important on contingency fee arrangements. Review the contingency agreement for wording covering the change of counsel. This is an area for negotiation between the associate and the firm. The Law Society does not mediate these types of disputes.
• What about calls to the old firm requesting the ex-associate? It is unprofessional to state that he/she has left and you do not know where they are. Clearly forward all such calls to the associate’s new number and place of business.
• What about all those computer precedents? This is an area that is currently unresolved, according to Felicia Folk. At the very least, it should be discussed with the associate.
• Potential liability claims? Report them to the insurer. Best to get all the evidence in the hands of the insurer now rather than later. Saves having embarrassing moments when the insurer may advise that you have lost your coverage. Can you fire for cause? Perhaps not, according to Joe Coutts. It depends on the nature and severity of the associate’s error. You may still be obligated to give notice or a severance package.
• Possible criminal or illegal activities? Lawyers can and do carry on in practice while charged with criminal offences. It depends on the nature of the charge and the circumstances. Impaired driving, possession of drugs, and fraud are all different and may or may not involve disciplinary action by the Law Society. However, you must be careful when terminating someone over an unproven criminal charge. Human Rights decisions indicate that it may be improper to fire someone prior to a determination being made on the charges.
• What about the associate whose lifestyle causes lifted eyebrows? Firing someone over allegations of discrimination could be unprofessional conduct in the eyes of the Law Society. Moreover, section 13 of the Human Rights Code comes into play. The Code overrides the common law and you cannot fire someone over any of the prohibited grounds in this section. Trying to do so could get you and your firm into hot water quickly.
• Subject to certain statutory provisions such as s. 13 of the Code and the pregnancy and parental leave provisions of the Employment Standards Act, any firm is free to hire and fire provided they provide reasonable notice or pay in lieu of notice. What is reasonable depends on the circumstances and warrants a telephone call to your friendly neighbourhood employment lawyer. How much severance pay is reasonable? It depends, says Joe Coutts, on the circumstances. The primary considerations are the associate’s age, the length of service, the character of the employment and the prospects for obtaining similar alternative work. You also must meet the minimum levels in the Employment Standards Act. Did you have an employment agreement specifying the notice to be given? No? Pity…
• What about the liability insurance that the firm has paid for the associate? Generally speaking, many firms do not ask for reimbursement, but this is by no means a fixed or written rule. It is yet one of the many matters that should be the subject of an agreement with the associate.
• How do you avoid most of these problems? A properly drafted associate employment contract would be a good start. Unfortunately, coming across a good precedent may take some looking. To the writer’s knowledge, no such precedent has been published in any practice manual developed for BC. Most firms must look to US, or perhaps Ontario, legal publications if they have nothing in house.
• Dealing with people is partly what makes the practice of law varied and interesting. In your firm’s dealings with the mentoring and growth of associates, it is inevitable that some pruning must take place. What need not happen is the development of a situation of fear, distrust and paranoia if such steps need be taken. After all, while most associates may not realise it at the time, such an action, while causing short-term pain, may be actually to their long term benefit, for it allows them to seek a situation that is closer to their own goals and expectations. Keeping someone in a situation for which they are clearly unsuited, because of a reluctance to let them go, is clearly not in anyone’s interest.

David J Bilinsky is a partner at Lakes Straith & Bilinsky and a principal at Integral Management Inc.

This article originally appeared in the June 1998 issue of BarTalk and is reproduced here with permission of both the author and the Canadian Bar Association, British Columbia Branch.