Howard

We granted review to decide whether an agreement between law partners is enforceable if it requires withdrawing partners to forego certain contractual withdrawal benefits if they compete with their former law firm. We conclude that an agreement among law partners imposing a reasonable toll on departing partners who compete with the firm is enforceable. We reverse the judgment of the Court of Appeal to the extent it holds the agreement unenforceable and orders an accounting to plaintiffs on that basis. We order the matter remanded to the trial court for a determination whether under the facts of this case the terms of the agreement are reasonable.

In 1982, partners in the law firm of Parker, Stanbury, McGee, Babcock & Combs executed a partnership agreement. Article X of the agreement provided in pertinent part that: "Should more than one partner, associate or individual withdraw from the firm prior to age sixty-five (65) and thereafter within a period of one year practice law ... together or in combination with others, including former partners or associates of this firm, in a practice engaged in the handling of liability insurance defense work as aforesaid…

We granted review to decide whether an agreement between law partners is enforceable if it requires withdrawing partners to forego certain contractual withdrawal benefits if they compete with their former law firm. We conclude that an agreement among law partners imposing a reasonable toll on departing partners who compete with the firm is enforceable. We reverse the judgment of the Court of Appeal to the extent it holds the agreement unenforceable and orders an accounting to plaintiffs on that basis. We order the matter remanded to the trial court for a determination whether under the facts of this case the terms of the agreement are reasonable.

I

In 1982, partners in the law firm of Parker, Stanbury, McGee, Babcock & Combs executed a partnership agreement. Article X of the agreement provided in pertinent part that: “Should more than one partner, associate or individual withdraw from the firm prior to age sixty-five (65) and thereafter within a period of one year practice law . . . together or in combination with others, including former partners or associates of this firm, in a practice engaged in the handling of liability insurance defense work as aforesaid within…

Should an attorney who leaves a law firm be free to compete with that firm? In this state, as in many others, attorneys are bound by a rule of ethics that prohibits them from entering into agreements that “restrict” their right to practice law after leaving a firm. (Rules Prof. Conduct of State Bar, rule 1-500.) The rule serves to eliminate unnecessary and artificial restrictions on clients’ ability to select their attorneys. Yet, the majority, contrary to the unambiguous language of the rule, holds that this rule does not bar law firms from entering into noncompetition agreements with their attorneys if such agreements are “reasonable.” I disagree.

In the majority’s view, whether a noncompetition agreement is “reasonable” depends not upon its effect on the rights of clients, but upon whether it serves to protect and preserve the financial stability of existing law firms. (Maj. opn., ante, at pp. 419, 423.) The majority insists that “a revolution in the practice of law has occurred requiring economic interests of the law firm to be protected as they are in other business enterprises.” (Id. at p. 420.) The majority says that changes in the economics of law practice “make the…