Legal Malpractice

Old and New Law in Attorney Fee Disputes

By (Andrew Lavoott Bluestone)

New York traveled through a sea change in its attorney disciplinary and ethical rules when the new rules were enacted in April.  Prior to the change, DR 2-107 did not require that a client be notified of the "percentage split" of fees between multiple attorneys working on a case; only the fact of multiple attorneys and fee sharing was required.

Now, the NY rules require that a percentage fee split be disclosed to the client under section 1.5[g][2] of the Rules.  As based upon this interpretation, Justice Goodman of Supreme Court, New York County has decided Lapidus & Associates, LLP v, Elizabeth Street Inc. we wee a result.  Plaintiff attorney seeks $90,000 in fees, and defendants have put up several defenses to the claim, with their own counterclaim of $ 175,000 for overbilling.

Clients are in a tough spot when the attorney sends out regular bills, and the client does not vociferously dispute the bills.  Of course, when the litigation is ongoing, and the client needs representation; when the bills are mostly ok, and there is a percentage of overbilling, the client has to decide what to do.  Does it fire the attorney and pay new counsel to pick up ?  Does it bite the bullet?  Does it find a middle course>

Here, client loses almost all around.  It makes an argument that the attorneys were wrongfully sharing fees;  it loses under the old rules, although the court implies that the result would be different for work performed today.  The Client loses on account stated, which is well described in this decision.

Full post as published by New York Attorney Malpractice Blog on November 17, 2009 (boomark / email).