The In-House Offer Is the Easy Part. Five Things to Check Before You Resign

A common route into an in-house role is joining a client you already know: a company you advised, or one you were seconded to. It makes sense. They have seen your work, and you understand their business.

It is also exactly the move many law firm employment contracts are written to limit.

Most of the energy in an in-house move goes into getting the offer. The part that causes problems usually comes afterwards, in the weeks between saying yes and starting, when a clause you signed years ago becomes relevant for the first time. This piece is for attorneys who have an offer, or expect one, and want to leave cleanly. It covers five points to check before you resign, in the order they tend to matter.

This is general information, not legal advice. Your own contract decides the answer, so read it, and if a clause matters, take advice from a labour law practitioner.

1. Read your restraint of trade first, and read it for clients

A restraint of trade limits what you can do after you leave, typically joining a competitor or dealing with the firm's clients.

South African law starts from the position that a restraint is enforceable. The person who wants to escape it has to show that it is unreasonable. That was settled by the Appellate Division in Magna Alloys and Research (SA) v Ellis (1984). In Basson v Chilwan (1993), the court set out the questions a judge asks:

• Does the employer have an interest worth protecting, such as confidential information or client relationships?
• Is that interest threatened?
• Does it outweigh your interest in being free to work?

In Reddy v Siemens Telecommunications (2006), the Supreme Court of Appeal upheld a restraint that stopped an employee joining a competitor for a year.

For an attorney going in-house, the important question is rarely "can I join another firm?" It is usually one of these:

• Does the clause cover clients? Many firm restraints restrict joining, or working for, a client you dealt with. That is the in-house move.
• How is a competitor defined? A company's legal department is not usually a competitor of a law firm. A broad definition might still catch it.
• How long does it run, and where? Six months is a very different conversation from two years.

A court can also enforce a restraint in part, narrowing it rather than striking it out. So "it's too wide to be enforced" is a riskier assumption than it sounds. If the clause could touch your new role, raise it before you resign. Speaking to your firm early, and agreeing a written release or a narrower reading, is far easier than arguing about it after you have left.

2. Plan around your notice period, in both directions

The Basic Conditions of Employment Act sets the minimum notice to end an employment contract:

• one week if you have worked six months or less;
• two weeks if you have worked more than six months but not more than a year;
• four weeks if you have worked a year or more.

These are minimums. Many contracts for qualified attorneys set a longer period, so your contract is where to look.

Notice can also end sooner than you plan. Under section 38, an employer may pay you instead of having you work your notice. So agree a start date with your new employer that works if you serve the full notice and also if you are released early. And give your notice in writing, keeping a copy.

3. Know what happens to your leave

When employment ends, section 40 of the Act generally requires the employer to pay for annual leave you have earned but not taken. For an incomplete leave cycle, that applies once you have been employed for more than four months.

Check your payslip or leave balance before you resign, so the number in your final pay is not a surprise. Check your contract too: some contracts let an employer require you to take leave during your notice period.

4. Leave client information exactly where it is

Your professional duty of confidentiality to the firm's clients does not end when your employment does, and the Legal Practice Council's Code of Conduct binds you wherever you go next.

In practice, don't take any of these with you:

• client files;
• your own copies of matter documents;
• precedents that contain client details.

It doesn't matter that you drafted them. This matters most when your new employer is a client of the firm. In-house, you may end up working on matters the firm still handles, so be clear in your own mind about what you know only because of your old role.

A new employer will usually want to know you understand this. Saying so plainly in the interview is a quiet mark of seniority.

5. Ask the Legal Practice Council about your status

The Legal Practice Act ties the Fidelity Fund certificate to attorneys who practise for their own account, alone or in partnership, or as directors of a practice (section 84(1)). It also restricts who may receive or hold money that belongs to other people (section 84(2)). An attorney employed in a company's legal department is in a different position from one running a practice. But how the rules apply to your enrolment, your practising status and any continuing obligations is a question for the Legal Practice Council, not for a general article.

Ask the Legal Practice Council directly, in writing. Ask your new employer, too, whether the role requires you to remain enrolled as a practising attorney. Some adverts ask for it.

Before you resign: a short checklist

• Read your restraint for three things: clients, the definition of a competitor, and how long it runs.
• Raise any restraint that could touch the new role with your firm, and get the outcome in writing.
• Check your notice period, and agree a start date that works if you're released early.
• Check your leave balance.
• Leave client files and client information where they are.
• Ask the Legal Practice Council how your status applies to the new role.
• Have the offer in writing (role, reporting line, start date, probation and full package) before you give notice.

The short version

The offer is the part you can see. The clauses you signed when you joined the firm are the part you can't. They rarely stop a move, but they can delay it, sour a relationship you will need later, or cost you a start date. An hour spent reading your own contract, and one or two early conversations, usually prevents all three.

If you are still deciding whether to make the move, our earlier piece, on what the move in-house actually asks of you, is the place to start.

LexLaunch Careers provides skills training and development for legal professionals at every stage, including experienced attorneys preparing for an in-house move. If you would like to talk through where you are, you can book a free 20-minute call.