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Client must hear of potential fee claim; fired attorney may be entitled to some recovery

A lawyer who takes on a contingency-fee case after the client has fired a previous lawyer has an ethical duty to inform the client that the first lawyer may have a financial claim for the work she did, according to a new Legal Ethics Opinion just approved by the Supreme Court of Virginia.

LEO 1878 addresses the common scenario in which a client dismisses one lawyer during a contingency-fee claim, then retains another.

The first lawyer has done work and under quantum meruit principles, is entitled to something.

The opinion acknowledges that the Virginia State Bar ethics committee, which wrote the opinion, cannot set the amount of that fee.

But it does address the ethical obligations of the second lawyer. She has to let the client know that the first lawyer isn’t totally out of the picture and may have a valid lien on any recovery. 

Dennis Quinn, chair of the legal ethics committee, explained the LEO this way to the VSB Council back in February:

“Lawyer Number Two has a duty to advise or warn the client that Lawyer Number One may have a claim for his fees and may file a lien on any recovery and that the combined fees may exceed what the client would have paid Lawyer Number One had she not fired him.”

The successor lawyer may not know about the extent of the work the first lawyer did, the opinion states. Nonetheless, the client must know a potential claim is out there.

And as Quinn noted, the combined fees of the two lawyers may be more than the client might have paid had he not fired his first counsel.

One other issue in the opinion: Can the second lawyer represent the client in negotiations with the first lawyer about the fee?

The answer is a definitive “it depends.”

The opinion states, “[T]here may be instances when successor counsel cannot provide diligent and competent representation to a client because successor counsel herself would not be capable of exercising the independent professional judgment and objectivity required to assess the value of the relative contributions which she and the predecessor attorney made in effecting the recovery.

“The client may need independent legal advice and advocacy regarding the calculation of successor counsel’s fee, the value of predecessor counsel’s quantum meruit lien, or the apportionment of any recovery among counsel claiming a lien on the recovery and the client.”

And the second lawyer must avoid a conflict of interest, but whether there is a conflict “must be assessed on a case-by-case basis,” the LEO stated.