Personal Injury Law

Attorneys Sharing Fees-Court of Appeals Decides

By Gerry Oginski

Here's the scenario:
Lawyer 1 is hired by an injured victim. Lawyer 1 then hires lawyer 2, a trial lawyer to handle the case as "trial counsel." During the litigation process lawyer 2 recognizes that he needs help to try the case and lawyer 2 then hires lawyer 3.

Here's the interesting part. When the client went to lawyer 1, he was told that he'd have to hire lawyer 2 to prosecute the case. The client agreed. The client was also told that there would be only one lawyers' fee. Each attorney would receive a percentage of the single attorney's fee. Client agreed.

Lawyer 1 agreed to accept 1/3 of the total attorney's fee recovered as his share of the attorney's fee. Lawyer 2 agreed.

Here's the problem. Lawyers 2 & 3 tried the case for three weeks. During trial, a large settlement was reached, $6.7 million. Attorney 3 took his share of the lawyer's fee. Lawyer 2 only gave lawyer 1 his 1/3 share out of LAWYER 2's share, and not the entire attorney's fee. This was a no-no.

In this case, which went all the way up to the highest court in New York, both lawyer 1 and lawyer 2 were suing each other. (I'm sure there are some people who rejoice to hear that lawyers are suing each other.)

The Court of Appeals of New York determined that lawyer 1 was entitled to receive his 1/3 share of the TOTAL attorney's fee, and not 1/3 of lawyer 2's share of the fee. This was a significant difference in the amount of money lawyer 1 would receive.

I leave you with this thought:
How many cases do you think lawyer 2 will continue to get from lawyer 1 after all this litigation? You can leave your answer in the comment section.

To read the full Court of Appeals decision, click here.

Full post as published by New York Medical Malpractice Blog on April 01, 2009 (boomark / email).