Protecting client relationships to ensure a fee

Protecting your client relationships from being damaged by other lawyers is important. In many cases, it is good for the client to have more than one lawyer involved. The benefits of co-counsel arrangements are that the lawyers can share expenses (and fees), provide alternative ideas and subject matter expertise about the case, and divide the work. But the client must approve all fee sharing arrangements for lawyers who are not in the same firm. See Georgia Rule of Professional Conduct 1.5 (“Rule 1.5”).

But lawyers must be careful about who they enter into co-counsel arrangements with. Some unscrupulous lawyers might use the opportunity to “steal” the client away from the original lawyer. Where the potential fee is large, the risk goes up. How do you protect yourself?

Protecting client relationships is all about communication

Most lawyer-client and lawyer-lawyer problems we see arise from poor communication. Consider the following example. Lawyer A lives in a small town and handles mainly transactional type work; the only litigation Lawyer A handles is that dealing with probating a deceased client’s estate. Lawyer A knows Client Family, and has done estate planning work for Client Family over the past 10 years. Sadly, one of Client Family’s sons is permanently injured by medical malpractice. As a result, Son requires around the clock care for the remainder of his life. Client Family comes to Lawyer A for advice.

Lawyer A explains to Client Family that Lawyer A is not a litigator. But, because of their close relationship, Lawyer A agrees to take the case. Client Family executes a contingency fee contract with Lawyer A. Lawyer A attends several seminars on medical malpractice, collects Son’s medical records, and sends several demands to the defendants. Unfortunately, the case isn’t settled.

Lawyer A decides that it is time to associate co-counsel, which Lawyer A’s original contingency fee agreement with Client Family allows. Eventually, Lawyer B expresses interest.  Lawyer A and Lawyer B meet with Client Family, and all of them execute a new contingency fee contract. In the contract, Lawyer A and Lawyer B agree to split the attorneys’ fees and expenses 50/50. They decide that they will share equally in the workload, both appear on pleadings, and be jointly responsible for the litigation. The new contingency contract does not have a provision vesting the attorneys’ fee if Client Family decides to terminate either or both Lawyer A or Lawyer B.

The case proceeds for two years. During that time, Lawyer A becomes ill and is advised to stay away from hospitals. As a result, Lawyer A is not able to visit with Client Family and son at the hospital as much as Lawyer A did early on. Seeing an opportunity, Lawyer B increases the frequency of their visits to the hospital to visit Client Family and Son. Lawyer B also surreptitiously takes Lawyer A off the pleadings… and Lawyer A stops receiving service and notice of things happening in the case.

Prior to the trial of the case, the court orders the parties to mediate. But Lawyer A doesn’t receive the notice. Preparing for the mediation, Client Family inquires about whether Lawyer A will attend the mediation. Lawyer B tells Client Family that Lawyer A doesn’t have to attend the mediation. Client Family complains about Lawyer A, thinking that Lawyer A hasn’t contributed much to the case over the past year. Lawyer B is silent about taking Lawyer A off the pleadings, of course. As a result of the Client Family’s mistaken beliefs, Client Family terminates their attorney-client relationship with Lawyer A the day before the mediation is to take place.

Defendants didn’t make any settlement offers before mediation. But the case settled for several million dollars at mediation. Client Family directs Lawyer B to not pay any fee to Lawyer A. Lawyer A decides to litigate to try to collect his portion of the attorney fee under the client contingency contract. But is Lawyer A still entitled to a fee?

If terminated, you may not be entitled to a fee

Under Georgia law, the client has the absolute right to hire and terminate counsel for any reason, or no reason. Many lawyers have tried to contract around this absolute right, but the Georgia Appellate Courts have clearly held that any contractual provision in any contract for representation attempting to limit or thwart the client’s absolute right to his choice of counsel is void as against public policy.

Some Georgia lawyers have even tried to place termination damage clauses in their fee contracts with clients. However, Georgia Courts have also held any contract provision in the attorney-client contract attempting to require a client to pay damages, in the event that the client terminates her lawyer, is unenforceable because it violates the client’s absolute right to terminate his attorney-client relationship.

When the contingency justifying a fee has not yet occurred at the time of discharge, the terminated lawyer has no basis for collecting any fee connected to the contingency. Some lawyers, recognizing their inability to try to recover from the client that terminated them, have tried to sue and recover from their former co-counsel. However, under Georgia law, the terminated lawyer cannot seek a portion of a contingent fee from their former co-counsel who worked on the case. Why? Because allowing a terminated lawyer to collect fees as if they were still involved in the case would render the client’s termination meaningless, and would result in an unreasonable fee to the terminated lawyer.

Even though terminated, isn’t my work compensable?

Assuming the contingency in the contract didn’t occur before termination, can a lawyer still recover fees? The short answer is maybe. According to the Georgia Appellate Courts, a lawyer terminated before the contingency occurs may only receive the quantum meruit value of their services. But the terminated lawyer must prove that their services on behalf of the client prior to termination were reasonable and necessary. This requires, among other things, meeting the 8 factors outlined by Rule 1.5. However, if the lawyer’s services prior to termination had no value to the client, then the terminated lawyer may not be able to recover fees, even under quantum meruit.  Evidentiary problems can also arise if the terminated lawyer did not keep contemporaneous time records to prove his quantum meruit claim.

Finally, some lawyers have tried to give a fee to the discharged lawyer despite what the client directs. But remember, under Rule 1.5, a lawyer may not share a fee with another lawyer without client consent.

To avoid this headache, stay involved with your clients! Clients who believe you’re working hard on their behalf will forgive your minor failures in communication. But clients who aren’t being communicated with well can quickly jump to the worst conclusion about their lawyer. This is especially true if they’re unhappy with the ultimate results.