How friending, liking, connecting or Tweeting can come back to haunt you.
By R. Peter Fontaine
It is axiomatic that the only true assets of any accounting firm are its clients and its people. These relationships are typically protected through a legal agreement between the firm and its people. Known as restrictive covenants (or, colloquially, as “non-competes”), under these contracts former partners and employees are prohibited from soliciting or serving firm clients, and soliciting or hiring firm employees.
Restrictive covenants are becoming increasingly more significant in the accounting industry because of the growing mobility of and competition for a scarce workforce and partner and employee “fallout” following a merger. The ever expanding popularity of social media only contributes to the uncertainty surrounding the enforceability and effectiveness of post-employment restrictions.
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About the AuthorPeter Fontaine, a CPA Trendlines expert author, is the founder and managing partner of NewGate Law. Before launching NewGate in 2012, he was the general counsel at McGladrey and assistant general counsel at Arthur Andersen. Peter works exclusively with CPA firms. He is also a contributor CPA Firm Partner Agreement Essentials and to the CPA Trendlines publication Making Mergers Work: Special Report [eBook]. He has served as chief legal counsel for professional services firms for more than two decades. Before establishing NewGate Law, Peter held the general counsel post at McGladrey LLP, and was responsible for the company’s legal, compliance, risk management, and government relations functions. Peter was also a partner at Arthur Andersen LLP, where he managed the legal support for its global business consulting practice. Prior to entering the accounting industry, Peter had a lengthy career at Maynard, Massachusetts based Digital Equipment Corporation, and was general counsel of its professional services division. Peter is an honors graduate of the College of the Holy Cross and the New England School of Law, both in the Boston area. Peter is a member of the American Bar Association, Association of Corporate Counsel and American Institute of Certified Public Accountants. Peter’s areas of expertise include:
- Accountancy regulation
- Acquisitions & divestitures
- Employment and partnership matters
- Litigation management
- Corporate governance
- Enterprise risk management
- Intellectual Property
- International transactions