A · Planning & eligibility
Leaving Your Firm to Start a Practice: Restrictive Covenants and Clients
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Quick answer
Restrictive covenants in your employment contract may limit soliciting former clients or working in a defined area for a period after you leave. They are only enforceable if reasonable in scope, duration and geography. Read your contract before telling anyone you are leaving, and always issue a professional clearance letter rather than approaching clients directly.
Key takeaways
- Check your contract for non-compete, non-solicit and non-dealing clauses before resigning.
- Courts only enforce covenants that protect a legitimate business interest and go no further than necessary.
- Non-solicitation clauses are more commonly enforced than blanket non-competes.
- Clients are free to choose their accountant; you cannot solicit them but you can accept unsolicited approaches.
- Professional clearance and a clean handover protect your reputation and your professional body membership.
- Take independent legal advice on your specific contract wording before acting.
What are restrictive covenants in an accountancy employment contract?
Restrictive covenants are clauses that restrict what you can do after leaving, typically covering non-competition, non-solicitation, non-dealing and confidentiality.
Most partnership agreements and senior employment contracts for accountants include some form of restrictive covenant. They are drafted to protect the firm's client relationships, goodwill and confidential information after you leave, whether you are moving to a competitor or starting your own practice.
Common types of clause
- Non-compete: restricts you from working in a competing business within a geographic area for a set period.
- Non-solicitation: prevents you from actively approaching the firm's clients to move their work to you.
- Non-dealing: goes further than non-solicitation by prohibiting you acting for former clients even if they approach you first.
- Non-poaching of staff: restricts recruiting former colleagues for a period.
- Confidentiality: an ongoing duty not to use or disclose client information, which survives regardless of other covenants.
Are restrictive covenants enforceable against accountants?
Yes, but only if they protect a genuine business interest and are no wider than reasonably necessary in duration, geography and scope; anything broader can be struck out by a court.
English law treats restrictive covenants as being in restraint of trade and therefore void unless the employer can show the restriction is reasonable and proportionate. Courts look closely at the length of the restriction (commonly 3 to 12 months for client non-solicitation), the geographic area covered and how precisely the clause defines the clients or staff caught.
A non-dealing clause that bans you from acting for any client of the firm, anywhere, for two years is far more likely to be found unreasonable than a 6-month non-solicitation clause limited to clients you personally worked on in the previous 12 months.
| Clause type | What it restricts | Enforceability risk |
|---|---|---|
| Non-solicitation | Approaching named clients you worked with | Lower risk if narrowly drawn |
| Non-dealing | Acting for clients even if they approach you | Higher risk if broad |
| Non-compete | Working in a competing practice locally | Higher risk, rarely enforced in full |
| Confidentiality | Using firm's confidential information | Generally enforceable, indefinite |
How should I handle leaving ethically?
Give proper notice, do not copy client data or take files, do not solicit clients before or during your notice period, and let professional clearance and natural client choice do the work.
Both ICAEW and ACCA expect members to act with integrity when leaving a firm. That means not using your position to actively canvass clients, not removing client records or contact lists, and being transparent with your employer about your plans once you have resigned.
- Re-read your contract and any partnership deed before resigning or discussing your plans with anyone.
- Take independent employment law advice if the covenants look wide or unclear.
- Resign formally and serve your full notice period professionally.
- Do not copy, export or forward client data, working papers or contact lists.
- Do not proactively contact clients to tell them you are leaving or where you are going.
- Once you have left, if a client contacts you unprompted, respond honestly but request professional clearance from their existing accountant before you act.
- Send a proper professional clearance letter and wait for a response before starting work.
Can clients follow me to my new practice?
Clients are free to choose their accountant and cannot be forced to stay, but you must not solicit them while a valid non-solicitation clause applies, and you should still obtain professional clearance.
A restrictive covenant binds you, not the client. If a client independently decides to move their work to your new practice, that is their choice. The risk sits with you if the firm can show you solicited them in breach of a valid clause, for example by messaging them before you left or during a restricted period after.
Keep a written record of who approached whom and when. If a dispute arises, contemporaneous evidence that the client approached you first is valuable.
What if my restrictive covenant seems unreasonably wide?
An unreasonable clause may be unenforceable, but you should get it confirmed by a solicitor rather than assuming so, since firms can and do pursue injunctions.
Firms sometimes include deliberately broad covenants knowing full well a court might narrow them, simply to deter departing staff. Ignoring a covenant because you believe it is unenforceable is risky: an interim injunction can be sought quickly and litigation is expensive and stressful even if you would ultimately win.
What role does professional clearance play?
Professional clearance is the formal, ethical route for a new accountant to confirm there is no reason not to act, and it should always be sought regardless of what any covenant says.
Whatever your contractual position, professional bodies expect a proper clearance process before you accept a new client who was previously served by another firm. This protects you, the client and the profession's reputation, and is separate from any restrictive covenant dispute.
How Remindoo helps
Whatever the history behind a new client relationship, the way you bring them on board matters. Remindoo gives you a standardised client onboarding workflow so every new client, whether a referral, a former colleague's client or a cold enquiry, goes through the same checks, engagement letter and first-service setup. Each client also gets one searchable record in Remindoo's client management area, holding notes, timeline and documents from day one, which is useful if a dispute about who approached whom ever arises. Starting clean with consistent records from the outset is good practice generally, and particularly valuable if you have left a firm under a restrictive covenant and want a clear, professional audit trail of how each new relationship began.
Frequently asked questions
Can my old firm stop me starting a practice at all?
A properly drafted covenant can restrict soliciting clients or staff for a period, but a total ban on you working as an accountant anywhere is very unlikely to be enforceable and would rarely be included.
How long do non-solicitation clauses typically last?
Commonly between 3 and 12 months from your leaving date, though this varies by contract and role. Longer periods face a higher bar to be found reasonable.
Do covenants apply to partners as well as employees?
Yes, partnership and LLP member agreements usually contain similar or stronger restrictive covenants, often with longer durations reflecting the partner's closer client relationships.
What happens if I breach a covenant?
The firm can seek an injunction to stop you acting for the client and may claim damages for lost fees. Legal advice before acting is far cheaper than defending a claim.
Should I tell my employer I plan to start my own practice?
You are not obliged to disclose your plans before resigning, but once you resign, be honest during your notice period and avoid any activity that could be seen as covert solicitation.
Does confidentiality apply even without a written covenant?
Yes, a duty of confidentiality over client and firm information generally exists at common law and under professional ethical codes, independent of any written restrictive covenant.
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Sources
Last updated 23 September 2026. General guidance, not legal or regulatory advice. Check with your professional body.
