Should I sign Noncompete clause?

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Should I sign Noncompete clause?

Postby Anonymous User » Sun Feb 10, 2019 11:52 pm

Moving to asia - big local law firm. Just got the contract to sign. It has 6 month non-compete clause.
I've never heard of this (at least in US/UK law firm scene). Should I sign this?

If I sign, and were to lateral later, how will this affect me? Will any firm pay for this time?

Lancair

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Re: Should I sign Noncompete clause?

Postby Lancair » Mon Feb 11, 2019 2:28 am

What is the contract actually restraining?

I practice in Australia and restraints are common here. Usually it prevents you from soliciting former colleagues for a job and clients for six months. These are generally enforceable in Australia, but rarely are as a matter of practice.

If they are restraining you from working for another employer, is it a gardening leave (ie a six month notice period) clause? This is not unusual in APAC but generally three months rather than six. This is fine because they’ll generally waive it if you want to leave early because they don’t want to pay you to sit around on the internet for six months.

On the other hand if they are trying to restrain you from working for another law firm for a period and not pay you during this time, that is BS and not market.

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Re: Should I sign Noncompete clause?

Postby Anonymous User » Mon Feb 11, 2019 7:16 am

Lancair wrote:On the other hand if they are trying to restrain you from working for another law firm for a period and not pay you during this time, that is BS and not market.


This.
I asked them and they say everyone joining their firm have signed this and this can't be changed......
Not sure if it's because this is NOT a US/UK firm or what..

albanach

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Re: Should I sign Noncompete clause?

Postby albanach » Mon Feb 11, 2019 9:46 am

See model rule 5.6. in most States this would be prohibited by the rules of personal conduct.

I'd try and use that as the basis of an argument that this is inappropriate, particularly if you think you might ever return to the US to practice.

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AVBucks4239

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Re: Should I sign Noncompete clause?

Postby AVBucks4239 » Mon Feb 11, 2019 11:22 am

If you are returning to the US to practice, I’m not sure that non compete would be enforceable.

albanach

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Re: Should I sign Noncompete clause?

Postby albanach » Mon Feb 11, 2019 12:04 pm

AVBucks4239 wrote:If you are returning to the US to practice, I’m not sure that non compete would be enforceable.


OP needs to be concerned about enforcement elsewhere, not just in the US. If they breached the agreement by returning to the US then subsequently visited a jurisdiction where the non-compete could be enforced, they could find themselves in trouble - particularly so if they later wanted to return and practice in that jurisdiction .

Lancair

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Re: Should I sign Noncompete clause?

Postby Lancair » Mon Feb 11, 2019 8:36 pm

Anonymous User wrote:
Lancair wrote:On the other hand if they are trying to restrain you from working for another law firm for a period and not pay you during this time, that is BS and not market.


This.
I asked them and they say everyone joining their firm have signed this and this can't be changed......
Not sure if it's because this is NOT a US/UK firm or what..


I wouldn't sign it. Tell them you're happy to agree to a 6 month notice period or a no poach/solicitation clause, but it's patently unreasonable for a firm to expect that you are going to hang out for six months without pay waiting for your restraints to expire.

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Re: Should I sign Noncompete clause?

Postby Anonymous User » Mon Feb 11, 2019 9:24 pm

Lancair wrote:I wouldn't sign it. Tell them you're happy to agree to a 6 month notice period or a no poach/solicitation clause, but it's patently unreasonable for a firm to expect that you are going to hang out for six months without pay waiting for your restraints to expire.


There is separate notice period of 1 month.

I said that but they said it's geographically limited (i.e. you can go to foreign country to work) and it is their standard form so they can't change.

I normally would walk away but right now I'm sort of in a position where I have to take the offer........ will this in anyway haunt me later?

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Re: Should I sign Noncompete clause?

Postby Npret » Mon Feb 11, 2019 10:27 pm

Anonymous User wrote:
Lancair wrote:I wouldn't sign it. Tell them you're happy to agree to a 6 month notice period or a no poach/solicitation clause, but it's patently unreasonable for a firm to expect that you are going to hang out for six months without pay waiting for your restraints to expire.


There is separate notice period of 1 month.

I said that but they said it's geographically limited (i.e. you can go to foreign country to work) and it is their standard form so they can't change.

I normally would walk away but right now I'm sort of in a position where I have to take the offer........ will this in anyway haunt me later?


What is the governing law of the contract?
Is the geographical scope the entire country?

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Re: Should I sign Noncompete clause?

Postby QContinuum » Tue Feb 12, 2019 1:16 am

Anonymous User wrote:
Lancair wrote:I wouldn't sign it. Tell them you're happy to agree to a 6 month notice period or a no poach/solicitation clause, but it's patently unreasonable for a firm to expect that you are going to hang out for six months without pay waiting for your restraints to expire.


There is separate notice period of 1 month.

I said that but they said it's geographically limited (i.e. you can go to foreign country to work) and it is their standard form so they can't change.

I normally would walk away but right now I'm sort of in a position where I have to take the offer........ will this in anyway haunt me later?

Assuming the noncompete is enforceable in the country in question, and that it covers that entire country, are you prepared to either go without pay & benefits for 6 entire months, or move out of the country? Even if you're willing to move out of the country, you should be aware that trying to find a job in another country from abroad is very difficult, and trying to return to the U.S. after practicing in Asia is itself challenging, especially if you don't have previous experience practicing in the U.S. So more or less if you walk into this, you should be prepared to go without pay & benefits for 6 months.

Further, consider that as you get older, it is very possible that you will start a family and acquire real estate, which would both make it more difficult to leave the country and also (significantly) increase your expenses (making it that much more difficult to ride out a 6-month noncompete).

Chaucer1343

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Re: Should I sign Noncompete clause?

Postby Chaucer1343 » Tue Feb 12, 2019 2:09 am

What country is this?
Last edited by QContinuum on Tue Feb 12, 2019 12:29 pm, edited 1 time in total.
Reason: Outed for anon abuse.

Lancair

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Re: Should I sign Noncompete clause?

Postby Lancair » Tue Feb 12, 2019 6:07 am

Anonymous User wrote:What country is this?


+1

Can we have some more details OP.

Like, I can see it being okay (on the basis that it's geographically limited) if it's in Jakarta or Bangkok or somewhere were you are a) not likely to be long term and b) you could easily lateral to another jurisdiction from. Asia is a bit different in that going from one of these more "regional" centres to another or HK or Singapore is not that difficult, *assuming* that the work you are doing is international/magical circle standard kinda work. But NFW should you be signing something like that in a normal legal market, and even in a frontier I would want danger money for it.

Also, lol at a law firm saying that a contract can't be changed. :lol:

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RedGiant

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Re: Should I sign Noncompete clause?

Postby RedGiant » Sat Feb 16, 2019 1:02 am

I think your biggest leverage is just to ask re associate retention. Ask how many associates who joined at your year made partner. If the answer is 2/12 in the past 6 years, or whatnot, then you say, "Well, I see you don't really retain associates that well, and, unfortunately, due to my student loan situation, while I am SO SO SO excited to join you, I simply cannot swing the possibility of not having an income for 6 months. Then I would negotiate it down to 3 months or zero. Tell them that you are absolutely joining their firm in good faith with no intention of leaving for another firm *at this time* but the very nature of biglaw is that you may need to look for a job elsewhere in the next 8 years, and you simply cannot survive without an income. pause. let the awkward silence sink it. Fell free to throw in something dramatic about how you're the first in your family to go to college and law school, so you're not just supporting yourself here.

And for them to claim it's not possible to change is simply laughable.



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