Opinion ID: 1722606
Heading Depth: 1
Heading Rank: 2

Heading: Discharge Without Just Cause

Text: In Henry, Walden & Davis v. Goodman , a law firm was hired by the client for a contingent consideration of one-third of any recovery. That law firm was discharged without just cause. A second law firm was employed, also for a contingent consideration of one-third of any recovery. The second firm obtained a judgment for $100,000, and it was paid a fee of $33,333. The first firm filed suit to collect another onethird from the proceeds of the judgment. The trial court refused to award the first firm one-third, but did award a reasonable fee to it based upon the amount of work done by that firm. We affirmed and stated that it would be an injustice to the client to hold him liable for both contingency fees for exercising that fundamental right [to terminate the contract at any time]. We said, an underlying assumption of this proposition is that the contingency has not been effected prior to discharge. Id. at 31, 741 S.W.2d at 236. That reasoning is in accord with the majority of jurisdictions. See Annotation, Limitation To Quantum Meruit Recovery, Where Attorney Employed Under Contingent Fee Contract Is Discharged Without Cause, 92 A.L.R.3d 690 (1979). The General Assembly enacted an attorney's compensation law in 1989 and expressly stated that the purpose of the act was to modify the effect of Henry, Walden & Davis v. Goodman , and to entitle attorneys to collect the full amount provided in the contract. Act 293 of 1989, codified as Ark.Code Ann. §§ 16-22-301 to -304 (Supp. 1991). The material part of the 1989 act, Ark. Code Ann. § 16-22-302, provides: The compensation of an attorney at law, solicitor, or counselor for his services is governed by the agreement, expressed or implied, which is not restrained by law. (Emphasis added.) We need not resolve the question of whether the legislative branch can regulate compensation of attorneys because the statute was obviously intended to apply to situations in which the client discharged the attorney without just cause. Such is not the case now before us; this case involves discharge with just cause. Even the majority opinion tacitly agrees that the statute does not govern, for it holds that when an attorney is discharged for just cause the amount of compensation is not governed by the agreement, as set out in the statute, but rather is to be based upon the theory of quantum meruit.