Fee Dispute Between Counsel Inspires Court To Bemoan The Death Of The Practice Of Law As A Profession

by: Peter J. Gallagher (LinkedIn)

In the final scene of the movie Scent of a Woman, Al Pacino’s character defends Chris O’Donnell’s character, who is about to be expelled from the (fictional) prestigious Baird School. Among many other things, Pacino’s character exclaims: “I don’t know who went to this place. William Howard Taft. William Jennings Bryant. William Tell, whoever. Their spirit is dead, if they ever had one.” Similarly, although slightly less dramatically, a fee dispute between counsel in Meister v. Verizon New Jersey Inc. led the trial court to eulogize the law as a profession:

This unfortunate fee dispute, coming as it does in the midst of seemingly final negotiations of a settlement, should resolve, with certainty, any lingering doubt that the practice of law, that storied profession of Marshall and Jefferson and Lincoln, is really now just another capitalist enterprise.

The court walked these comments back, slightly, by acknowledging that “[t]he practice of law is not a hobby” and “[h]ard working and industrious counsel who take risks to advance a client’s case and to maximize a client’s recovery should be rewarded.” But it then immediately returned to its original thesis:

However, while lawyers may indeed make a client’s life better through their advocacy and vigilant protection of that client’s interests, they are uniquely able to make it seem as though they are not doing so when quarreling, as they are here, over who gets to spell out how much they should be paid from their paralyzed client’s recovery and why one is more entitled to do so than another.

This is probably not how the lawyers in the case hoped the court would start its opinion.

The facts in Meister were tragic. Plaintiff was, as the trial court described her: “an attorney, a wife, and a mother, who, through no fault of her own, and simply by being in the wrong place at the wrong time, was in an instant moment rendered a triplegic.” A “severely rotted and deteriorated wood utility pole snapped at its base and struck [plaintiff] on her head and body, as she was walking to the bus stop to go to work.”

But the issue before the court had nothing to do with plaintiff’s injuries or who might be liable for them. Instead, it was a fight between plaintiff’s former counsel and her current counsel over which of them would be permitted to participate in the hearing to determine the gross attorney fee awarded after settlement or trial.

Plaintiff’s former counsel argued that he had done all of the work on the case and should be allowed to participate. He claimed that new counsel would not have the same incentive to argue for a significant fee because new counsel had done little work and, therefore, any recovery for new counsel would be a windfall. The trial court described former counsel’s argument as follows:

[Former counsel], in essence, wants the court to have the option of awarding a higher fee than the one that may be sought by plaintiffs’ current counsel . . . at the eventual fee hearing. [Former counsel] sees no problem in the conversion of that hearing from one in which the court is asked to approve the reasonableness of the award (given its size and the diminished capacity of the plaintiff) with focus on the interests of the gravely injured party (the very person that hearing is intended to protect), into one where competing versions of how large that fee should be are offered by different attorneys with diverging agendas.

New counsel countered that former counsel’s retainer agreement terminated once former counsel terminated his engagement with plaintiff, and that, as a result, former counsel had no rights to argue for any compensation under that agreement. Rather, former counsel was limited to seeking quantum meruit after the gross attorney’s fee was determined by the court. New counsel also argued that he would seek a fee similar to what former counsel would seek.

Given the way the court framed former counsel’s argument, it should come as no surprise that it rejected former counsel’s position. The court held that there was no case law supporting former counsel’s argument that he should be allowed to participate in the fee hearing. On the contrary, the trial court held that “the case-law seems to emphatically support the opposite view . . . that [former counsel] will be entitled to a quantum meruit recovery – nothing more and nothing less – if and when plaintiffs resolve their underlying litigation or after a jury returns a verdict.”

The court also held that plaintiff’s desire to replace former counsel deserved “significant weight” and supported denying former counsel’s request. This conclusion was based on the well-settled notion that a client always maintains “unfettered discretion to obtain or release counsel.” In other words, plaintiff always had the right to terminate counsel. Allowing counsel to participate in the lawsuit after being terminated would be inconsistent with this right. (Notably, the trial court observed that this result would have been the same whether former counsel was terminated or voluntarily withdrew, an issue that was disputed in the case.)

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