When a manager or senior accountant leaves, the main protection for the practice’s fees is a well drafted non solicitation or non dealing clause in their contract, backed by the professional duty of confidentiality. A court will only enforce such a clause if it protects a legitimate business interest and goes no further than reasonably necessary, so the clause needs to be tied to the clients the person actually worked with, for a limited period.

Who owns the clients when someone leaves?

ICAEW’s helpsheet on changes in the composition of a firm states that clients are ordinarily clients of the firm, not of individual principals, and usually stay with the firm when a principal leaves. It also stresses that clients have the right to choose their accountants and may follow someone who leaves. A practice cannot stop a client moving; it can only restrict what the departing person does.

The same helpsheet points departing employees to the ICAEW Code of Ethics. Paragraph R114.2 allows an accountant who changes employment to use prior experience but not to use or disclose confidential information acquired through a professional or business relationship, and the helpsheet says a client or address list is confidential to the practice and should not be used by a former employee to promote a new employer’s services.

What types of restrictive covenant are there?

The government’s 2020 consultation on non compete clauses describes the main post termination restrictions:

  • Non compete: stops the former employee working for a competing business, or setting one up, for a period.
  • Non solicitation: stops them soliciting the employer’s customers or employees for a period.
  • Non dealing: stops them having dealings with the former employer’s clients for a period, whoever makes the first approach.
  • Non poaching: stops them hiring the former employer’s staff.

For an accountancy practice the difference between non solicitation and non dealing is important. Clients often contact a departing manager themselves, and a non solicitation clause does not stop the manager accepting that work. A non dealing clause does.

When will a court enforce a covenant?

The consultation summarises the current common law. Restraints of trade are presumed unenforceable unless shown to be reasonable. A clause is only reasonable and enforceable if it protects a legitimate business interest of the former employer and is no wider than reasonably necessary to protect that interest, and the employer has to prove both. If it succeeds, the employer may seek an injunction or damages. The consultation also notes that courts often consider the employee’s seniority and access to confidential information and clients when judging whether the length of a restriction is reasonable, and that it is rare for a non compete lasting over 12 months to be enforced.

For a practice, the obvious interests to protect are the client connections a manager builds through the firm’s work and confidential knowledge of fees and client affairs. A clause that tries to stop a junior bookkeeper working anywhere in the region is hard to justify on that test; a clause stopping a client manager acting for clients they personally handled in their last year is much easier to defend.

How should the clauses be drafted for a practice?

Drafting choices that make a covenant easier to defend include:

  • limiting it to clients the employee worked for, or had material contact with, during a defined period before leaving, usually the last 12 months;
  • keeping the duration proportionate to the role, and shorter for junior staff;
  • defining the restricted services as the accountancy, tax and advisory work the practice actually provides;
  • including a separate non poaching clause for team members;
  • writing each restriction as a separate clause, so each can be judged on its own terms;
  • reviewing covenants on promotion, because a clause written for a trainee will not suit a director.

For partners and members, the restrictions usually sit in the partnership or members’ agreement rather than an employment contract. ICAEW notes a departing principal may be prohibited from acting for clients under those documents and advises legal review. Employment law changes regularly, so the practice should take legal advice on wording and on how to introduce new terms for existing staff.

What else protects the client base?

  • Confidentiality. Taking a client list is a professional breach under the Code, and section 170 of the Data Protection Act 2018 makes it an offence to knowingly or recklessly obtain, disclose or retain personal data without the consent of the controller.
  • Garden leave. Keeping the person employed and paid during notice, away from clients, gives the practice time to introduce a new contact. The 2020 consultation notes some employers already use garden leave alongside non compete clauses.
  • Handover. ICAEW says changes in the engagement partner or key contact should be clearly communicated to clients, often with a handover period.
  • Service. Clients who are well looked after are less likely to follow anyone. Regular reviews of the client base help; see reviewing the client base.

Where a client does move, the professional clearance procedures still apply: ICAEW refers to section 320 of its Code on changes in professional appointment.

Is the law on non compete clauses changing?

In May 2023 the government said, after the 2020 consultation, that it would introduce a statutory limit of 3 months on non compete clauses when parliamentary time allowed. In November 2025 the Department for Business and Trade published a working paper with wider options, including banning non compete clauses below a salary threshold, a statutory limit on length, or a combination. The working paper confirms that under current law a non compete is unenforceable unless the employer shows it is reasonable, and it flags that if only non compete clauses were restricted, the government would need to stop non dealing clauses being used to the same effect. The working paper closed on 18 February 2026 and was a discussion document rather than legislation, so practices relying mainly on non dealing clauses should watch for any proposals that extend to them.

How might this play out?

Illustration only. A client manager with eight years at a practice resigns to join a competing firm across town. Her contract has a 12 month non dealing clause covering clients she worked on in her last 12 months, and a 6 month non poaching clause. She looked after 60 clients. During her 3 month notice period the practice places her on garden leave and the partner calls each of her clients to introduce a new manager. Four clients contact her new firm. Because of the non dealing clause her new firm cannot act for them until the 12 months has passed, so the practice has a fair chance of keeping them. Without it, a non solicitation clause alone would have been hard to rely on, because the clients made the first approach.

What mistakes do practices make?

  • Using one template covenant for every role, from trainee to director.
  • Restricting all clients of the firm rather than those the employee dealt with.
  • Relying on non solicitation only, when clients typically approach the departing person.
  • Not updating covenants on promotion.
  • Letting staff export client data to personal devices, which makes a leak easier and harder to trace; see data protection for accountancy practices.
  • Waiting too long to act after discovering a breach.

Departing staff also affect other arrangements. Check that the practice’s professional indemnity insurer is told of changes in principals, as ICAEW recommends, and review engagement letters where the named contact changes.

Solar Protect runs fee protection schemes for accountancy and bookkeeping practices. See how our accountant schemes work or read fee protection schemes for accountants.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.