Car accident lawyer Barry P. Goldberg of Woodland Hills is offered to take over cases by clients upset with their current counsel almost on a daily basis. You may be surprised to learn that the Goldberg Injury Lawyers seldom “jump in” and take over files handled by previous law firms for lots of reasons. Not only are cases and files not handled in the manner of the Goldberg Firm, but a dispute regarding attorney fees can often arise. Potential new clients need to know that they will pay only one attorney fee—-so, the law firms are left to fight it out for an equitable distribution of the eventual fee.
Mr. Goldberg always inquires how the previous law firm was terminated, if at all. If the previous law firm withdraws, then no attorney fee lien attaches. The potential case is “clear” in most instances for the Goldberg firm to move forward with representation. In fact, Mr. Goldberg always recommends that clients try to “work it out” with their existing lawyer because that is usually the best option. Many great lawyers and law firms have disgruntled clients due to the lack of communication about the respective case. News Flash—Most Lawyers have Poor Client Communication Skills! They fail to take calls. They assign communication to an underling. They forget to call back. Many lawyers just don’t like to talk to clients and feel like they should not have to explain themselves and they are insulted that the client even question them! That is why Mr. Goldberg urges clients to schedule an in person, face to face, meeting to discuss the case progress and prognosis. That resolves about 75% of all represented inquiries.
Of course, there are some circumstances that demonstrate a lack of expertise or skill on the part of prior counsel. In our practice, this often involves uninsured and underinsured motorist law and arbitration. However, we have taken over large personal injury cases that were originally signed up with real estate, bankruptcy and probate law firms.
Assuming there is a prior attorney lien, Mr. Goldberg always reviews the prior Retainer Agreement to make certain that there is a right to seek a lien and other information. One mistake attorneys make is by putting an hourly fee amount in the Retainer Agreement for when and if the law firm is discharged. In a recent case, the Retainer contained a provision stating, “I agree this Agreement may be terminated by either Attorney or me. In the event of termination I realize I will be responsible for the expenses incurred and for the value of the services provided. I agree the services will be valued at $275 per hour for attorneys, $150 per hour for legal assistants and paralegals and $50 per hour for all other persons who work on my case.”
That law firm was then terminated and properly asserted a lien against the eventual recovery. The case settled for millions and the law firm claimed it was entitled to “Quantum Meruit” —- the reasonable value of their services by getting the case 90% of the way to the millions. In support of its position, appellant primarily relies upon the decision in Fracasse v. Brent (1972) 6 Cal.3d 784. There, the California Supreme Court held a discharged attorney was limited to “quantum meruit recovery for the reasonable value of his services,” rather than “the full fee specified in the contract of employment.” (Id. at p. 786.) Contrary to appellant’s suggestion, the Fracasse court did not state that discharge of an attorney renders the retainer agreement with that attorney void and unenforceable for all purposes. Instead, the court simply reasoned that to allow the attorney to collect the full fee would be contrary to “the strong policy, expressed both judicially and legislatively, in favor of the client’s absolute right to discharge his attorney at any time.” (Ibid.) The court rejected the attorney’s request to enforce the retainer’s contingency fee provision to recover more than the attorney would be entitled to recover under quantum meruit principles. Accordingly, the prior law firm recovered about $75,000 rather than the hundreds of thousands (even millions) it was seeking.
However, the Court found that nothing in Fracasse supports appellant’s attempt in the present case to rely on quantum meruit to obtain greater compensation upon termination of the Retainer than it expressly agreed to. The Retainer’s termination provision was found to be clear and, even if it were ambiguous, the ambiguity would be resolved against the prior law firm, who drafted the Retainer. (M’Guinness v. Johnson (2015) 243 Cal.App.4th 602, 617–618.)
So— the question is— What is actually contained in the Retainer Agreement you signed? Lawyers would be well-served to not to put an hourly rate in retainer agreements unless some unusual circumstance exists. Further, subsequent counsel should always read and review the prior retainer agreement before accepting a case that was previously handled by another firm.