Quantum Meruit and Attorney’s Fees
Muldoon & Getz
A client may discharge an attorney at any time before the conclusion of the agreed-upon services. That is the rule from Matter of Cooperman. The client may exercise this right for a good reason, a bad reason, or no reason. When discharged without cause, the attorney is entitled to be compensated in quantum meruit.
“If a client exercises the right to discharge an attorney after some services are performed but prior to the completion of the services for which the fee was agreed upon, the discharged attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the completed services.” Matter of Cooperman, 83 NY2d 465, 473, 611 NYS2d 465 (1994).
Frequently the determination of quantum meruit will focus on the amount of time spent by the attorney. The retainer agreement itself may provide the method for determining the fee upon discharge – setting an hourly rate, for example. See 7 NY Jur 2d, Attorneys at Law § 225. However, as the quoted language from Cooperman indicates, the “fair and reasonable value” of services is not necessarily determined solely by the number of hours expended.
If representation ends at an early stage, it may be appropriate for the law office to be compensated for certain initial efforts expended, e.g., setting up the file and the like.
When discharged without cause, the attorney’s recovery in quantum meruit may be greater than what was provided for in the retainer contract. Clifford v Pierce, 214 AD2d 697, 625 NYS2d 602 (2d Dept 1995); Morrison Cohen Singer & Weinstein v Zuher, 203 AD2d 119, 610 NYS2d 226 (1st Dept 1994).
Where the retainer provides for a contingency fee, upon discharge prior to completion of the services, the recovery is in quantum meruit. Ingber v Sabato, 229 AD2d 884, 645 NYS2d 918 (3d Dept 1996); 7 NY Jur 2d, Attorneys at Law §§ 226 - 227.
With division of fees among several attorneys in a personal injury case, in assessing their proportionate contribution, the court focuses on the time and labor spent by each, the actual work performed, difficulty of the questions involved, the skill required to handle the matter, the attorney’s skills and experience, and the effectiveness of counsel in bringing the matter to resolution. Buchta v Union-Endicott Central School District, 296 AD2d 688, 745 NYS2d 143 (3d Dept 2002).
“For cause” discharge
Where the discharge is for cause, the attorney is entitled to no compensation. Estate of Stevens, 252 AD2d 654, 675 NYS2d 182 (3d Dept 1998).
Attorney recovery in quantum meruit has been more restrictive in the area of family law. Where the Milonas rules apply, several decisions have required strict compliance. For example, where a section of the Code of Professional Responsibility was violated -- no written domestic relations retainer agreement -- that effectively precluded the attorney from collecting any fee. McMahon v Evans, 169 Misc2d 509, 645 NYS2d 753 (Sup Ct 1996).
With Part 1400 requirements, virtually total noncompliance has resulted in no fee. Kaplowitz v Newman, 185 Misc2d 205, 713 NYS2d 115 (App Term 2000); Julien v Machson, 245 AD2d 122, 666 NYS2d 147 (1st Dept 1997). See also, Hunt v Hunt, 273 AD2d 875, 709 NYS2d 744 (4th Dept 2000).
Noncompliance with Part 1400 resulted in no further award of fees, but did not require the return of fees already paid. Markand v Markand, 263 AD2d 470, 692 NYS2d 733 (2d Dept 2001). “Substantial compliance” with Part 1400 resulted in fees being granted. Flanagan v Flanagan, 267 AD2d 80, 699 NYS2d 406 (1st Dept 1999).
Effect of disbarment or suspension
Where an attorney is disbarred or suspended and therefore unable to continue representation, Appellate Division rules specify that the attorney fee is arrived at through quantum meruit. See, e.g., 22 NYCRR § 1022.27(e) (Fourth Department). In a contingency fee case, where the attorney was disbarred, the determination of his fee was based on the hours worked and hourly rate, without reference to work performed by successor counsel, rather than a percentage. Casey v Ruffino, 306 AD2d 304, 760 NYS2d 537 (2d Dept 2003).
© 2008 by Gary Muldoon