Noncompete clauses in employment contracts can be risky, and even law firms that use them find themselves fighting over what the wording means and how legally restrictive the clauses can be.

Just ask Herbert Smith Freehills (HSF) that recently found itself in a court battle with eight of 10 lawyers that White & Case hired away to open an office in Australia. The eight partners were subject to a noncompete clause at the firm that required six months' notice and restrained them from practicing as a partner at a competing firm for one year, according to sibling publication The Asian Lawyer.Herbert Smith Freehills sued the eight attorneys and reached a court settlement on May 2. The accord allowed the lawyers to join White & Case as of March 2, but not as partners until one year after their resignations last September.

Companies and law firms in the United States are increasingly inserting noncompete clauses into employment contracts, and sometimes for good reason: Such clauses can help protect trade secrets such as the recipe for a product, or other confidential information such as client lists.