Selling a law practice in California: Rule 1.17, client notice, and how it differs from the ABA rule

California Rule 1.17: what the rule requires, in plain steps

California's current rule took effect November 1, 2018, replacing former rule 2-300, and the drafting commission says it kept the old rule's substance (source: State Bar of California, Rule 1.17 with comments and executive summary). Read as steps:

1. Sell all or substantially all of the practice. The sale covers the practice of a lawyer, living or deceased, including goodwill, to another lawyer or law firm. Comment 1 says this rules out selling only a field or area of practice, or only your practice in one geographic area or jurisdiction (source: State Bar of California, Rule 1.17 with comments and executive summary).
2. Hold fees steady. Fees can't be increased solely by reason of the sale (source: State Bar of California, Rule 1.17 with comments and executive summary).
3. Notify and get consent. If the sale moves responsibility for unfinished work, client files or information protected by Business and Professions Code 6068(e)(1), each client whose matter is included gets written notice and must give written consent (source: State Bar of California, Rule 1.17 with comments and executive summary).
4. Substitute where courts require it. If a tribunal's rules require substitution in a pending matter, every step needed to substitute a lawyer must be taken (source: State Bar of California, Rule 1.17 with comments and executive summary).
5. Clear conflicts. The buyer must comply with rules 1.7 and 1.9 (source: State Bar of California, Rule 1.17 with comments and executive summary).
6. Keep nonlawyers out of client information. Confidential information shall not be disclosed to a nonlawyer in connection with the sale (source: State Bar of California, Rule 1.17 with comments and executive summary).

The rule doesn't apply to joining or retiring from a law firm, retirement plans and similar arrangements, or a sale of a practice's tangible assets (source: State Bar of California, Rule 1.17 with comments and executive summary). The purchasers must take on all client matters sold, subject to client consent, but the requirement is still met if a conflict keeps the buyer from taking a particular matter (source: State Bar of California, Rule 1.17 with comments and executive summary).

“Substantially all” leaves a little room. The discussion to former rule 2-300 gave the example of keeping one or two clients whose long personal relationship with the lawyer made a transfer impractical; the current comments don't repeat that example (source: State Bar of California, Rule 1.17 with comments and executive summary). For the full process that applies in every state, from valuation to closing, see our main guide to selling a law practice.

How California Rule 1.17 differs from ABA Model Rule 1.17

When California rewrote its rules, the commission looked at the ABA model, which allows selling a field of practice or the practice in one area or jurisdiction, and turned it down. Its reasons: it could be used to evade the fee-division rules, invite lawyers to cash in on client relationships, and add to the commercialization of practice. Most of all, it believed California's approach protects clients better (source: State Bar of California, Rule 1.17 with comments and executive summary).

The cessation point cuts both ways. Under the ABA rule, ABA Formal Opinion 468 lets a seller help move active matters for a reasonable period but not take new work in what was sold (source: ABA Formal Opinion 468 (Oct 8, 2014), via ABA Journal). California's text has no cessation condition at all, so a seller who stays on with the buyer is limited mainly by the all or substantially all requirement and the conflict and fee-division rules.

California law practice sale client notice: contents and timing

The notice is the heart of the rule, and California spells out what it says. Each client whose matter is in the sale must be told (source: State Bar of California, Rule 1.17 with comments and executive summary):

• that the interest in the law practice is being transferred to the buyer;
• that the client has the right to retain other counsel;
• that the client may take possession of any client materials and property, as rule 1.16(e)(1) requires; and
• that if there is no response within 90 days after the notice is sent, or if the client's rights would be prejudiced by the buyer not acting during that time, the buyer may act for the client until the client says otherwise.

Timing for a living seller. The seller, or a lawyer appointed for the seller under Business and Professions Code 6180.5, sends the notice not less than 90 days before the transfer and must obtain the client's written consent before it. If reasonable efforts to locate the client have been made and 90 days pass with no response, consent is presumed until the client says otherwise (source: State Bar of California, Rule 1.17 with comments and executive summary).

Timing for a deceased seller, or one with a conservator. If no lawyer has been appointed under 6180.5, the buyer gives the notice and obtains the written consent, before the transfer, with the same presumption after reasonable efforts and 90 days (source: State Bar of California, Rule 1.17 with comments and executive summary).

Two practical points follow from the text. Count 90 days from the date the notice is sent, not received, and keep proof of the efforts you made to find clients who don't answer, because the presumption depends on them. The State Bar's guidelines suggest agreeing the notice wording with the buyer in the purchase agreement (source: State Bar of California, Guidelines for Closing or Selling a Law Practice (updated May 29, 2024)).

Confidentiality while a buyer reviews your California practice

California's confidentiality duty is statutory. Business and Professions Code 6068(e)(1) makes it a lawyer's duty “to maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client” (source: Cal. Bus. & Prof. Code 6068). Rule 1.17 builds on it in two ways: the notice requirement applies whenever information protected by 6068(e)(1) will be transferred, and paragraph (e) bars disclosing confidential information to a nonlawyer in connection with the sale (source: State Bar of California, Rule 1.17 with comments and executive summary).

The California rule has no comment like ABA Comment 7, which says negotiations before identifiable client information is shared are no more a breach than merger talks (source: ABA Model Rule 1.17, Comment), and it doesn't refer to a conflict-check disclosure exception like ABA Rule 1.6(b)(7) (source: ABA Model Rule 1.6). So a California seller gets less guidance from the rule itself on what can be shared during diligence. A cautious order of operations:

1. Share practice-level numbers first: fees by practice area, matter counts, fee types, staff.
2. Keep nonlawyers, including appraisers, brokers and the buyer's staff, to practice-level data only.
3. Run the buyer's conflict check, which rules 1.7 and 1.9 require, with the minimum data needed.
4. Open files only after the client has consented or the presumption applies.

Fee rules after a California practice sale

Paragraph (a) says fees shall not be increased solely by reason of the sale. Comment 2 explains what that means: the buyer must honor the seller's existing fee and scope arrangements, and the sale can't be financed by raising fees on transferred matters. Fee changes can still be justified by other factors, such as a change in the buyer's responsibilities, the passage of time, or reasonable costs the original agreement didn't cover, and any change must comply with rules 1.4 and 1.5 (source: State Bar of California, Rule 1.17 with comments and executive summary).

• Individual matters. Transferring single client matters, where permitted, is governed by rule 1.5.1 on fee divisions, not by the sale rule (source: State Bar of California, Rule 1.17 with comments and executive summary).
• Brokers. Paying a fee to a nonlawyer broker for arranging a sale or purchase is governed by rule 5.4(a) (source: State Bar of California, Rule 1.17 with comments and executive summary), which bars sharing legal fees with a nonlawyer except in listed cases (source: State Bar of California, Rule 5.4 (eff. Mar 22, 2021)).
• The estate. A lawyer buying the practice of a deceased, disabled or disappeared lawyer may pay the agreed price to the lawyer's estate or other representative under rule 5.4(a)(2) (source: State Bar of California, Rule 5.4 (eff. Mar 22, 2021)).

Selling a deceased attorney's practice in California

California gives estates a specific path, and it runs through two codes.

1. Notice of cessation. When a lawyer dies, resigns, goes inactive, is disbarred or is suspended with a notice order, notice of cessation of law practice must be given (source: Cal. Bus. & Prof. Code 6180 to 6185). It goes to clients, opposing counsel, courts and agencies with pending matters, the errors and omissions insurer, and the State Bar's Office of the Chief Trial Counsel. After a death, the personal representative sends it, or whoever has custody of the files (source: Cal. Bus. & Prof. Code 6180 to 6185).
2. A practice administrator. The personal representative, or another person interested in the estate, may petition for appointment of an active State Bar licensee to take control of the practice's files and assets. The court appoints the lawyer the deceased named in writing, including in a will, unless that would be against the estate's interests or create a conflict, and requires a surety bond (source: Cal. Probate Code 9764).
3. Powers, including sale. The court can let the administrator take control of operating and trust accounts, review files, contact clients about successor counsel, and “create a plan for disposition of the practice” to protect its value. Subject to the personal representative's approval, the administrator may agree to sell the practice and its goodwill (source: Cal. Bus. & Prof. Code 6180 to 6185).
4. Rule 1.17 still applies. The buyer sends the client notice and gets written consent before the transfer, unless a lawyer was appointed under 6180.5, in which case that lawyer does (source: State Bar of California, Rule 1.17 with comments and executive summary).

If there are unfinished client matters and no plan, a court can take jurisdiction over the practice and appoint lawyers to notify clients, return files and, where needed, arrange a receiver for the trust account (source: Cal. Bus. & Prof. Code 6180 to 6185). Sections 6190 and following apply the same process when a living lawyer becomes unable to practice (source: Cal. Bus. & Prof. Code 6190 to 6190.6).

The State Bar's Formal Opinion 2024-209 says lawyers have an ethical obligation to assess whether they need a succession plan, and notes that a plan involving a sale on death must also comply with rule 1.17 (source: State Bar of California, Formal Opinion 2024-209 (succession planning)). The State Bar also publishes a sample succession planning agreement (source: State Bar of California, Opening and Managing a Law Office). Naming a practice administrator in your will and agreeing a sale in advance is what keeps the practice worth something: the State Bar's guidelines say a deceased lawyer's criminal practice may be worth as little as one or two months of income (source: State Bar of California, Guidelines for Closing or Selling a Law Practice (updated May 29, 2024)).

Valuing a California law practice

The State Bar of California's guidelines for closing or selling a law practice give a starting method (source: State Bar of California, Guidelines for Closing or Selling a Law Practice (updated May 29, 2024)):

• Average fee income over the previous five years, by category of fees.
• Start at six times average monthly gross fees, then adjust.
• A corporate, business or probate practice whose seller stays three to six months to introduce clients may be worth 12 to 15 times the monthly average.
• Hard assets and work in process are valued on top of the multiple.
• Price adjustments can track what client accounts actually bring in over 6 or 12 months.

The same guidelines list the contract terms to cover, including assets not being transferred, payment schedule, accounts receivable, transition assistance and who handles closed files (source: State Bar of California, Guidelines for Closing or Selling a Law Practice (updated May 29, 2024)). Our main law practice sale guide compares these figures with other bar guidance and covers tax allocation.

Files, trust money and records in a California sale

• Client materials and property. On termination, rule 1.16(e)(1) requires prompt release at the client's request of all client materials and property, which includes correspondence, pleadings, deposition transcripts, expert reports, exhibits and physical evidence in any form, whether or not the client paid for them (source: State Bar of California, Rule 1.16). Comment 1 to rule 1.16 says it applies to a sale under rule 1.17 (source: State Bar of California, Rule 1.16).
• Unearned fees. Rule 1.16(e)(2) requires a prompt refund of any advance fee or expense not earned or incurred, except a true retainer (source: State Bar of California, Rule 1.16).
• Trust records. Rule 1.15(d)(5) requires keeping records of client funds and property for no less than five years after final appropriate distribution (source: State Bar of California, Rule 1.15).
• Originals and wills. The State Bar's guidelines say original documents should be returned to clients, and that most superior courts have a system for depositing wills that can't be returned (source: State Bar of California, Guidelines for Closing or Selling a Law Practice (updated May 29, 2024)).

The data-license angle: firm-owned material only

In California the line is especially clear. Client files, client information and anything protected by 6068(e)(1) can never be part of a license, and Rule 1.17(e) bars disclosing confidential information to a nonlawyer in connection with the sale (source: Cal. Bus. & Prof. Code 6068, State Bar of California, Rule 1.17 with comments and executive summary). An AI developer or data buyer is a nonlawyer.

What is left is material the firm wrote for itself with no client in it: blank templates, the procedures manual, training material and workflow designs. Broker B, which names law firms, lists templates, precedents, intake and matter workflows and process documentation, and excludes privileged client matter content; Buyer program E accepts law firms with 6 or more employees (source: program terms, Regulr buyer directory). These are the programs' own published terms, checked November 8, 2026; our buyer directory lists them.

Decide before you sign with a buyer, because a practice sale includes goodwill and a buyer will expect the firm's forms and systems. List anything you license separately as an excluded asset and disclose any exclusivity. Our guides to law firm SOPs and templates, law firm data licensing and licensing data before you sell a business cover the details, and the data value checker shows what moves price.

Frequently asked questions

Sources

California Rules 1.15, 1.16, 1.17 (with comments and the commission's executive summary) and 5.4, Business and Professions Code 6068, 6180 to 6185 and 6190 to 6190.6, Probate Code 9764, State Bar guidance, ABA Model Rules 1.6, 1.15, 1.17 and 5.4 and ABA Formal Opinion 468 were read on November 8, 2026. Program terms were re-checked on the programs' own pages on November 8, 2026.

1. State Bar of California, Rule 1.17 with comments and executive summary
2. State Bar of California, Rule 1.15
3. State Bar of California, Rule 1.16
4. State Bar of California, Rule 5.4 (eff. Mar 22, 2021)
5. Cal. Bus. & Prof. Code 6068
6. Cal. Bus. & Prof. Code 6180 to 6185
7. Cal. Bus. & Prof. Code 6190 to 6190.6
8. Cal. Probate Code 9764
9. State Bar of California, Guidelines for Closing or Selling a Law Practice (updated May 29, 2024)
10. State Bar of California, Formal Opinion 2024-209 (succession planning)
11. State Bar of California, Opening and Managing a Law Office
12. ABA Model Rule 1.17
13. ABA Model Rule 1.17, Comment
14. ABA Model Rule 1.15
15. ABA Model Rule 1.6
16. ABA Model Rule 5.4
17. ABA Formal Opinion 468 (Oct 8, 2014), via ABA Journal
18. program terms, Regulr buyer directory