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Lawyer and Client Can Be Held "Jointly and Severally" Liable for Legal Fees

Sometimes, an opposing party can recover legal fees incurred for responding to a frivolous filing. It is now settled in Massachusetts that such a fee recovery can be had against both the frivolously filing party and his/her lawyer. That is, upon the right set of facts and circumstances, lawyer and client can be held "jointly and severally" liable for the legal fees incurred in responding to a frivolous appeal.

Who Has the Burden of Proof in Challenging A Massachusetts Contingency Fee Agreement?

In a recent unpublished Rule 1:28 decision the Massachusetts Appeals Court has ruled that when the reasonableness of contingent fee agreement is at issue, the attorney has the burden to prove reasonableness. A solo practitioner, Landry, sued his clients, Elizabeth Haartz and her husband Walter Davis II, for breach of contract after they ceased paying Landry's fee for his work on the sale of Haartz' stock in her family's company, Haartz Corp. The stock sale made the couple $20,000,000.00. They filed a counterclaim stating that Landry, who had handled their estate planning and other assorted legal needs for 15 years and whom they had trusted and thought of as a friend, had charged them an excessive fee in violation of the Rules of Professional Conduct. Landry had presented Haartz and Davis a contingency agreement which called for him to receive a fee of no more than 1.5 percent of the proceeds of the sale ($300,000.00) Apparently Davis had questioned why Landry was not charging an hourly rate as he had done in the past, and Landry responded that "this is the way" of charging for the particular services being performed. After the deal was closed and the couple had subsequently paid Landry $121,000 of the $300,000 owed him under the agreement, their accountant, told them that a contingency fee of this kind for legal work on a stock sale was not only unusual, but "way out of line." They stopped payments immediately and in July 2004, Landry filed against them for breach of contract In October 2008, a jury found against Landry in favor of the defendants on the breach of contract claim. Additionally, the trial judge ruled that the contingent fee agreement in this case violated Chapter 93A and awarded treble damages against Landry on the counterclaim, finding that Landry had failed to meet his burden to prove his fee was reasonable. When Landry appealed, he failed to persuade the appellate court that the trial judge had erred by shifting the burden of proof on the clients' counterclaim onto him. Interestingly, the trial judge had noted that the result (a finding of an unreasonably excessive fee) would have been the same regardless of which party had the burden of proof.

Who Has the Burden of Proof in Challenging A Massachusetts Contingency Fee Agreement?

In a recent unpublished Rule 1:28 decision the Massachusetts Appeals Court has ruled that when the reasonableness of contingent fee agreement is at issue, the attorney has the burden to prove reasonableness. A solo practitioner, Landry, sued his clients, Elizabeth Haartz and her husband Walter Davis II, for breach of contract after they ceased paying Landry's fee for his work on the sale of Haartz' stock in her family's company, Haartz Corp. The stock sale made the couple $20,000,000.00. They filed a counterclaim stating that Landry, who had handled their estate planning and other assorted legal needs for 15 years and whom they had trusted and thought of as a friend, had charged them an excessive fee in violation of the Rules of Professional Conduct. Landry had presented Haartz and Davis a contingency agreement which called for him to receive a fee of no more than 1.5 percent of the proceeds of the sale ($300,000.00) Apparently Davis had questioned why Landry was not charging an hourly rate as he had done in the past, and Landry responded that "this is the way" of charging for the particular services being performed. After the deal was closed and the couple had subsequently paid Landry $121,000 of the $300,000 owed him under the agreement, their accountant, told them that a contingency fee of this kind for legal work on a stock sale was not only unusual, but "way out of line." They stopped payments immediately and in July 2004, Landry filed against them for breach of contract In October 2008, a jury found against Landry in favor of the defendants on the breach of contract claim. Additionally, the trial judge ruled that the contingent fee agreement in this case violated Chapter 93A and awarded treble damages against Landry on the counterclaim, finding that Landry had failed to meet his burden to prove his fee was reasonable. When Landry appealed, he failed to persuade the appellate court that the trial judge had erred by shifting the burden of proof on the clients' counterclaim onto him. Interestingly, the trial judge had noted that the result (a finding of an unreasonably excessive fee) would have been the same regardless of which party had the burden of proof.

Get It In Writing: Managing Lawyer-Client Expectations

        If you have a good general understanding of how your car works, and you have done some repair work yourself, taking your car to be repaired is less daunting than it is for those of us who do not know the difference between a starter and an alternator. The less you know, the more you can be taken advantage of. The best car mechanics are good listeners, thoughtfully use considerable skill and experience to evaluate the problem, explain the problem in understandable terms without overly relying on technical jargon, give a reasonable estimate of the repair costs, keep you informed, and do the work competently and on time. The very best ones look for ways to save you money without sacrificing value. Why should your experience with your lawyer be any different?

You Lost Your Case: Legal Malpractice Claims Arising From Bad Trial Results

Sometimes, clients feel that their trial lawyers are guarantors of a good result at trial. Under the common law, that is not so. If a lawyer does make inflated claims or goes so far as to actually express a promise or guarantee of victory, he has probably violated an ethical rule and then can be sued successfully if the expressly promised result does not occur. However, it is generally true that the mere act of taking on your case does not by itself mean that you have been promised any particular result. In such instances, it is not legal malpractice just because you lost your case, or just because you won less than you felt entitled to recover.

Legal Malpractice Insurance

It is not mandatory in Massachusetts for lawyers to have insurance for mistakes they may make that cause damages to their clients. This is unfortunate, and causes a great deal of harm. Legal malpractice insurance is not particularly expensive, relative to other forms of insurance, and it is hard to understand why any professional would undertake serious, important client matters without having the ability to compensate the client for making serious mistakes. From the client's point of view, given the choice of hiring two equally competent attorneys to handle any important, high-stakes case, where one of them has legal malpractice insurance and the other does not, is there any doubt who should be hired?

Lawyer Theft: A Different Kind of Problem

This blog illustrates a problem of attorney theft (defalcation) that I have discussed in a prior blog post, CPK in the news: comment on lawyer overcharging claim. Many potential clients contact our office believing they have the ultimate legal malpractice case because their former attorney did something so egregious, so clearly wrong (for example, defalcation), that they are "undoubtedly entitled" to recover damages from the attorney. They are sometimes wrong, but creative lawyering can save the day. The following is an example:

New Rule On Lawyer Fee Agreements in Massachusetts

Regular readers of this blog post know that I am a proponent of clear communication, early and often, between lawyer and client, particularly as to the scope of the engagement and the expected fee structure, and I have written about the fact that, except in contingent fee cases, the ethical rules governing lawyers in Massachusetts have never before required that a fee agreement be in writing.

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