Opinion ID: 853798
Heading Depth: 2
Heading Rank: 3

Heading: Who Pays the First Lawyer's Fee

Text: The next inquiry is who is responsible for paying Lyons's feeGalanis or Brownin the absence of any agreement on that point. Galanis argues that Lyons may recover its fee from Brown but not from him because in Indiana parties pay their own fees. This may be true as a general matter in cases where the dispute is between two opposing parties. However, in this case, all agree that Brown has incurred a fee for her case in the form of at least a 40% contingent fee to Galanis. [2] We agree with and adopt for Indiana the Louisiana Supreme Court's approach to fees for successive lawyers employed under contingent fee contracts. [O]nly one contingency fee should be paid by the client, the amount of the fee to be determined according to the highest ethical contingency percentage to which the client contractually agreed [and] ... that fee should in turn be allocated between or among the various attorneys involved in handling the claim in question.... Saucier v. Hayes Dairy Products, Inc., 373 So.2d 102, 118 (La.1979). The fee should be apportioned according to the respective services and contributions of the lawyers based on the work each performed. Id. In a system of professional responsibility that stresses clients' rights, it is incumbent upon the lawyer who enters a contingent fee contract with knowledge of a previous lawyer's work to explain fully any obligation of the client to pay a previous lawyer and explicitly contract away liability for those fees. If this is not done the successor assumes the obligation to pay the first lawyer's fee out of his or her contingent fee. Galanis was in the best position to evaluate and to reach an agreement as to a reasonable fee for the value of the work already done in Brown's case. Lawyers almost always possess the more sophisticated understanding of fee arrangements. It is therefore appropriate to place the balance of the burden of fair dealing and the allotment of risk in the hands of the lawyer in regard to fee arrangements with clients. In the Matter of Myers, 663 N.E.2d 771, 774-75 (Ind.1996). Galanis also had the option to discuss with Brown the need for someone to pay Lyons's fee and to refuse to accept the case if Brown could not resolve any open issues with Lyons. He neither advised her of the need to pay the fee nor contracted away that responsibility for himself. Under these circumstances, Galanis, not Brown, should bear the burden of his silence. Accordingly, Lyons is entitled to recover the compensation due it from Galanis' contingent fee. For the same reasons we reject the approach taken by some states that would require the client to pay fees to both lawyers and then attempt to recover the amount paid to the first from the second. See 1 GEOFFREY C. HAZARD, JR. & W WILLIAM HODES, THE LAW OF LAWYERING § 1.16:602 n. 7 (1990 & Supp.1998) (discussing Plunkett & Cooney P.C. v. Capitol Bancorp Ltd., 212 Mich.App. 325, 536 N.W.2d 886 (1995)). Lawyers, as professionals, should be able to resolve these issues by agreement. If they cannot, they, not the client, should bear the cost of resolving a dispute over their relative contributions.