Can a discharged contingent-fee lawyer sue a former client to recover for the work done before being fired?

Plain-English summary

A lawyer had entered a contingent-fee contract with a personal-injury client and, over about four months, advanced expenses and performed work on the case before the client terminated the representation and asked for the file, which the lawyer surrendered. The lawyer billed the former client for the advanced expenses and an itemization of the work performed. Relying on Johnson v. Cerva, 508 So. 2d 257 (1987), and Gaines & Gaines v. Hare, Wynn, 544 So. 2d 445 (1989), which give a discharged contingent-fee attorney a right to a fee based on quantum meruit for services rendered before discharge, the lawyer asked whether suing in a court of competent jurisdiction for the work performed would violate any ethical standard.

The Disciplinary Commission concluded it would not. Under DR 5-103(A)(1), an attorney may acquire a lien granted by law to secure his fee or expenses relating to the litigation he is conducting (as defined by §34-3-60, Code of Alabama), so an attorney may assert such a lien to secure fees and expenses. The Commission stressed it could not consider or recommend specific forms of relief or legal remedies, and that by stating an attorney is ethically permitted to seek legal relief to secure payment, it was not opining that the particular method chosen is legally correct. Whether a contingency contract terminated before full performance converts to a quantum meruit contract is a legal conclusion beyond the Commission's review. But once the attorney has made a reasonable determination of the proper legal course, he may seek appropriate relief. The Commission noted that Rule 1.8(j) of the Rules of Professional Conduct, effective January 1, 1991, maintains the standard established by DR 5-103(A)(1).

Currency note

This opinion was issued in December 1990, at the transition from the former Alabama Code of Professional Responsibility (DR 5-103(A)(1)) to the Alabama Rules of Professional Conduct effective January 1, 1991, whose Rule 1.8(j) it noted maintains the same standard. It predates the 2002 Ethics 2000 revisions to the ABA Model Rules. A lawyer's acquisition of a proprietary interest in litigation, with the lien and expense exceptions, is now governed by Rule 1.8(i); the attorney's-lien statute (§34-3-60) remains a matter of state law. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a fired contingent-fee lawyer pursue payment for work already done?

A: Per the opinion, yes. The attorney may assert the lien granted by law to secure fees and expenses and may seek appropriate legal relief for the work performed before termination, once he reasonably determines the proper legal course.

Q: Does the opinion say the contract becomes a quantum meruit claim?

A: No. The Commission declined to decide whether a contingency contract terminated before full performance converts to quantum meruit, calling that a legal conclusion beyond its authority.

Q: What lien can the lawyer assert?

A: The opinion pointed to DR 5-103(A)(1)'s allowance of a lien granted by law to secure the lawyer's fee or expenses in the litigation, as defined by §34-3-60, Code of Alabama.

Background and rules framework

The opinion interpreted former DR 5-103(A)(1) (a lawyer may not acquire a proprietary interest in the litigation except a lien granted by law to secure his fee or expenses, as defined by §34-3-60, Code of Alabama), and noted Rule 1.8(j) of the incoming Alabama Rules maintains that standard. The proprietary-interest rule, with its lien and expense exceptions, is now Rule 1.8(i).

Citations and references

Rules of Professional Conduct:

• Former Ala. Code of Prof. Resp. DR 5-103(A)(1) (no proprietary interest except a lien granted by law); now Model Rule 1.8(i) (Ala. R. Prof. C. 1.8(j))

Statutes:

• §34-3-60 et seq., Code of Alabama (1975) (attorney's lien)

Cases:

• Johnson v. Cerva, 508 So. 2d 257 (Ala. 1987), discharged contingent-fee attorney's right to a quantum meruit fee
• Gaines & Gaines v. Hare, Wynn, 544 So. 2d 445 (Ala. 1989), same

See also

• AL Ethics Op. 1986-02: client file ownership and the attorney's lien
• AL Ethics Op. 1992-05: absent a valid attorney's lien, the file belongs to the client
• AL Ethics Op. 1991-05: a contingent fee to collect child-support arrearages
• RI Ethics Advisory Panel Op. 2001-03: Escrowing Disputed Fees Owed to Predecessor Counsel
• RI EAP Op. 2012-05: Rule 1.8(i)'s Contingent-Fee Exception Permits a Lawyer to Take a Mortgage on Adverse-Possession Property as a Fee, Subject to Rule 1.8(a) Safeguards

Source

• Landing page: https://www.alabar.org/office-of-general-counsel/formal-opinions/1990-86/
• Original PDF: https://www.alabar.org/assets/2019/02/RO-90-86.pdf

Original opinion text

ETHICS OPINION

RO-90-86

Contingent fee – attorney lien – quantum meruit

QUESTION:

"During the year of 1990, I entered into a contingent fee contract with a client who suffered certain personal injuries. A copy of a like contract, however, with hers being a one-third (1/3) contingent fee as opposed to the one-half (1/2) as reflected in the attachment, was executed by the respective client. Over the course of the employment, this attorney incurred certain advanced expenses, and also, incurred actual work and labor on the case itself. Approximately four (4) months after this attorney was employed, this attorney received a notice to terminate employment with respective client. Client asked for previously employed attorney to surrender her file for which said attorney obliged said request.

Attorney submitted certain money charges to past client evidenced of advanced expenses, and an itemization of actual work and labor on said file from the date of employment to the date of termination.

In reliance upon Johnson vs. Cerva, 508 So.2d 257 (1987) and Gaines and Gaines vs. Hare, Wynn, 544 So.2d 445 (1989), which gives a discharged attorney on a contingent fee contract a right to a fee based upon quantum merit and actual services rendered prior to discharge, would this attorney be in violation of any ethical standard with the Alabama Code of Professional Responsibility in the event said attorney institutes a legal action in a competent court of jurisdiction for the actual work and labor performed from the point of employment to the point of termination?"

ANSWER:

The Code of Professional Responsibility provides in Disciplinary Rule 5-103(A)(1) as follows:

"DR 5-103 ***

(A) A lawyer shall not acquire a proprietary interest in the transaction, cause of action or subject matter of litigation he is conducting for a client except that he may:

(1) acquire a lien granted by law to secure his fee or expenses involving and relating only to the matter of litigation he is conducting for a client and as defined by Sec. 34-3-60, Code of Alabama, et seq."

In accord with the above-cited provision of the Code of Professional Responsibility, an attorney may assert a lien, as granted by law, to secure fees and expenses. The Disciplinary Commission cannot consider or recommend specific forms of relief or courses of action in reference to legal remedies that might be available on these facts. In addition, the Disciplinary Commission cannot and does not, by stating that an attorney, pursuant to the Code of Professional Responsibility, is ethically permitted to seek legal relief to secure the payment of fees and expenses, opine that the method chosen on these facts is legally correct. The determination of whether a contingency contract, upon termination before full performance, terminates to a quantum meruit contract is beyond our review and calls for legal conclusions that the Commission is not authorized to make. However, as is made quite clear by the Code of Professional Responsibility, an attorney, once having made a reasonable determination as to the proper legal course to follow, may on these facts, seek appropriate relief.

Rule 1.8(j) of the Rules of Professional Conduct, effective January 1, 1991, maintains the standard established by DR 5-103(A)(1).

AWJ/vf

12/6/90