Source: https://mochiefcounsel.org/news.php?id=44&mydate=6-2018
Timestamp: 2019-04-20 13:15:29+00:00

Document:
Lawyers often lean on each other; they often ask other lawyers to serve as local counsel or for second opinions. Many take bigger steps, setting up joint representations as co-counsel. Some lawyers even advertise their practice by focusing on other lawyers as much as to the public. Those lawyers hope they have earned a professional and collegial reputation among their peers, especially in complex practice areas. Common examples of joint representation occur in tort claims on behalf of plaintiffs, but joint ventures can benefit lawyers - and their clients - in any area of the law.
This article offers references to court rules and judicial decisions to help lawyers navigate the ethical risks and opportunities when sharing fees with other lawyers not in the same firm.
Rule 4-1.5(e) and Rule 4-7.2, and their Comments, provide key guidance. Rule 4-1.5(e) lets lawyers from different firms share fees, but sets three conditions: (a) the total fee remains reasonable; (b) the client is aware of and agrees to the lawyers&rsquo; plan &ndash; which must be confirmed in writing; and (c) the lawyers either &ldquo;assume joint responsibility&rdquo; or divide the fees &ldquo;in proportion to the services performed.&rdquo; Rule 4-1.5(e).
Lawyers disputing fees should assure that clients receive undisputed portions of a recovery as soon as possible. In other words, lawyers&rsquo; fee disagreements with other lawyers should not adversely impact clients, even temporarily. Rule 4-1.15(e).
Missouri courts have further clarified the rules related to fee splitting. Most judicial application of the rules occurs when lawyers go to court to dispute each other&rsquo;s claims. Other relevant Missouri cases address fee splitting consequences when firms dissolve; and, court holdings reinforce the rule based prohibition against referral fees; still others apply and define the quantum meruit (added value) analysis in claims between prior and successor counsel. Courts impose costly consequences when lawyers don&rsquo;t fully comply with the rules and seek compensation without written proof that the client has agreed to joint representation. And, courts deny fee claims for attorneys who abandon their clients or violate rules of professional conduct during their representation.
1. Lawyers may neither demand nor receive fees for merely referring a client to another lawyer. Londoff v. Vuylsteke, 996 S.W.2d 553 at 557-558 (Mo.App.E.D. 1999). And, neither implicit nor oral agreements for referral fees are enforceable. Londoff v. Vuylsteke, at 557-558.
2. Enforceable fee sharing agreements require writings, written notice to clients, and that the lawyers either share responsibility or are paid in proportion to work performed. Rule 4-1.5(e); Londoff v. Vuylsteke, 996 S.W.2d at 557-558. As used in Rule 1.5(e), the term &ldquo;responsibility&rdquo; includes &ldquo;judgment, skill, ability and capacity.&rdquo; In this instance, &ldquo;responsibility&rdquo; requires significantly more than mere shared professional liability for malpractice. Londoff v. Vuylsteke, 996 S.W.2d at 557-558.
In another case, the 8th Circuit found inadequate shared responsibility, and denied a share of the recovery. The court noted that although the firm claiming a fee had occasional telephone calls with one of the several clients, they had not filed an appearance, had not paid any portion of court fees, did not assist the primary firm in creating trial strategy, and did not take depositions, Eng v. Cummings, McClorey, Davis &amp; Acho, PLC, 611 F.3d 428, 435-436 (8th Cir.2010).
the client&acute;s right to discharge an attorney is greater than the attorney&acute;s claim of right to an interest in an agreement with another attorney. Once a client asserts his right to discharge an attorney, there is no longer a special partnership between the attorneys, and the discharged attorney is only entitled to fees as he would be entitled to absent the agreement.
Risjord v. Lewis, 987 S.W.2d 403, 406 (Mo. Ct. App. 1999).
The appellate court got to the heart of the issue, explaining: &ldquo;If [the attorney] wanted a share of the fees, he should have done a share of the work. Fees are not owned, they are earned.&rdquo; Risjord v. Lewis, 987 S.W.2d at 406.
3. When lawyers cannot collect a fee under a contract because, for example, the client discharges them, claims for fees are limited to recovery under quantum meruit. Lawyers must establish the actual value of their services to collect any fee. The fee under quantum meruit is not established by hourly rate or the contract&rsquo;s terms except that a quantum meruit fee may not exceed the contract. Of course, before any contingent fee is claimed (whether under contract or quantum meruit), the contingency must have occurred. Int&acute;l Materials Corp. v. Sun Corp., 824 S.W.2d 890, 895 (Mo. 1992).
The quantum meruit recovery of attorneys employed under a contingent fee contract who are discharged without cause before settlement or judgment, but who have rendered valuable services to the reasonable value of the services rendered, may recover an amount not to exceed the contracted amount, payable only upon occurrence of the contingency. Int&acute;l Materials Corp. v. Sun Corp., 824 S.W.2d at 895, citing Plaza Shoe Store, Inc., v. Hermel, Inc., 636 S.W.2d 53 (Mo. banc 1982).
4. The client should not have to pay for duplicative services. Int&acute;l Materials Corp. v. Sun Corp., 824 S.W.2d at 895.
5. After termination of representation or dissolution of a firm, an ousted lawyer&rsquo;s claim for a contingent fee can no longer be based on a contract. A claim for quantum meruit recovery, &ldquo;not the terminated contingent-fee agreement, is the asset of the dissolved partnership.&rdquo; Welman v. Parker, 328 S.W.3d 451, 458 (Mo.App. S.D. 2010).
The modern rule, whereby the discharged attorney&acute;s recovery is limited to the reasonable value of his services on a quantum meruit theory, is optimal because it evidences a greater sensitivity to the desired public policy of allowing a client to discharge his attorney at any time, without undue burden, in a manner that is not cost prohibitive.
Plaza Shoe Store, Inc., v. Hermel, Inc., 636 S.W.2d at 60.
Under Missouri law, a client may discharge a lawyer at any time, with or without cause, subject to liability for payment for the lawyer&acute;s services. Mo. Rules of Professional Conduct 4&ndash;1.16(c), cmt. 4.
Miess v. Port City Trucking, Inc., 2012 WL 401041, at 3 (E.D. Mo. Feb. 8, 2012).
7. Fee splitting arrangements may be enforced in court, but only if the arrangements fully comply with the Rule 4-1.5(e), Eng v. Cummings, McClorey, Davis &amp; Acho, PLC, 611 F.3d 428, 435-436 (8th Cir.2010).
(6) the result that was achieved.
Welman v. Parker, 328 S.W.3d at 458.
9. A discharged attorney&rsquo;s successful effort to collect a fee will include proof of that attorney&rsquo;s contribution of value to the client&rsquo;s ultimate recovery, relative to contributions by co-counsel, predecessor counsel, and successor counsel. Miess v. Port City Trucking, Inc., WL 401041, at 3. In the Miess case, the successor lawyers&rsquo; extensive work, contribution of resources and case development, as well as the initial (discharged) lawyers&rsquo; faulty client contracts, conflicts of interest and limited resource contribution were weighed against the discharged lawyers&rsquo; initial investigation.
10. All involved counsel must avoid conflicts of interest. An attorney witha conflict with a client is unlikely to recover a fee in quantum meruit. Rule 4-1.7, Reid v. Reid, 950 S.W.2d 289, 292 (Mo.App.E.D.1997).
Partial recovery may be available, even if the attorney claiming the fee caused the attorney-client relationship to break down. Complete forfeiture of fees occurs only when a lawyer&rsquo;s clear and serious violation of a duty to a client is found to have destroyed the attorney-client relationship. Int&acute;l Materials Corp. v. Sun Corp., 824 S.W.2d at 895.
Readers will note the court decisions in this article result from civil disputes over fees. Although discipline was not the aim in these cases, the courts deciding those cases applied the Rules of Professional Conduct to reach their conclusions. Discipline can be a consequence of violations related to fees, but those cases are much less common than cases involving client communication, diligence, and safekeeping property.
Lawyers&rsquo; fee disputes with clients are often resolved by participation in fee dispute resolution programs sponsored by The Missouri Bar and by the Kansas City Metropolitan Bar Association. The Missouri Bar&rsquo;s Lawyer-to-Lawyer Dispute Resolution may be used by lawyers disputing fee splits with other lawyers.
Lawyers can likely identify many acceptable ways to get paid while working with other lawyers. But, to justify a fee, lawyers must do more than simply recommend another lawyer. They must reduce agreements to writing, and they must either share responsibility or get paid in proportion to the work performed. Written notice of fee sharing agreements must be provided to clients.
If the relationship with the client, or co-counsel, falls apart, lawyers hoping for a fee will want to be prepared to show both the work they completed and the value they added to the ultimate recovery. In other words, lawyers should not wait until relationships fail to keep track of their participation. Successful recovery often requires proof of contemporaneous records of tasks intended to benefit the client, including timely investigations and contributions of ideas and resources.
When lawyers join together to help clients, they also help each other get by, as long as they follow the Rules of Professional Conduct and the tenets described in these court decisions.
&ldquo;If [the attorney] wanted a share of the fees, he should have done a share of the work. Fees are not owned, they are earned,&rdquo; Risjord v. Lewis, 987 S.W.2d at 403.
By plain language, Rule 4-1.5 does not allow lawyers to pay or receive a fee for a mere referral.
Clients and their cases are not business assets to be owned by lawyers or law firms. Instead, causes of action, as well as the physical and electronic files, belong to clients. In the Matter of Cupples, 952 S.W.2d at 235.
A discharged attorney&rsquo;s successful effort to collect a fee will include proof of that attorney&rsquo;s contribution of value to the client&rsquo;s ultimate recovery, relative to contributions made by co-counsel, predecessor counsel, and successor counsel.

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