When a client follows a departing associate, can the old firm refuse to itemize its services on the contingent-fee lien, and must the new lawyer report that?

Plain-English summary

A client hired Attorney A, an independent-contractor associate of Attorney B's firm, to handle a personal-injury case; A did all the lawyer work, while B's firm paid the staff. The written contingent-fee contract was between the client and B's firm. A year later, A left to open his own practice, and the client chose to continue with A. No settlement offer had yet been made. Attorney B then asserted an attorney's lien (Va. Code § 54.1-3932) with the defendant's carrier and told the client the firm held a lien for fees. When A, on the client's behalf, twice asked B to itemize the services rendered so the lien fee could be determined, B did not respond. B also demanded that A pay him 70% of all attorney's fees on every case A had opened while associated with the firm, including this one. The committee was asked whether B's refusal to itemize was misconduct, whether A had a duty to report B, and whether B could ethically refuse to itemize in a contingent-fee case.

The controlling rules were DR 1-102(A)(4) (no dishonesty, fraud, deceit, or misrepresentation), DR 2-105(A), (B), and (C) (fees must be adequately explained, the basis or rate furnished on request, and a closing statement provided in contingent-fee matters), and DR 1-103(A) (duty to report misconduct).

The committee concluded that, because A had requested an itemization, it was improper under DR 2-105 for B to refuse to supply one. While the committee could not make the factual finding whether the refusal was an attempt to coerce A into paying beyond the contract, it cautioned that the facts reflected a demand for 70% of the attorney's fees (not 70% of the settlement), and that if coercion were factually established, the refusal might also violate DR 1-102(A)(4). On reporting, the committee restated the two-prong test under DR 1-103(A) (substantial certainty of a violation, plus a substantial question as to honesty, trustworthiness, or fitness), warned that the reporting lawyer must observe DR 7-104's bar on threatening a disciplinary charge solely for civil advantage, and found that on these facts B's refusal to itemize, coupled with the lien and the 70%-of-all-fees demand, raised a substantial question about B's fitness. It reiterated that B may not ethically refuse to provide the itemization.

Currency note

This opinion was issued in 1994, under Virginia's former Code of Professional Responsibility (the disciplinary rules and ethical considerations it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. 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 the old firm refuse to itemize its services on a fee lien?

A: Under this 1994 opinion, no. The committee held that because the successor lawyer had requested an itemization, it was improper under DR 2-105 for the firm to refuse to supply one, especially in a contingent-fee matter requiring a closing statement.

Q: When does refusing to itemize become dishonesty?

A: The committee said it could not make the factual finding, but cautioned that if the refusal was an attempt to coerce the departing lawyer into paying beyond the contract (the firm demanded 70% of fees), it might also violate DR 1-102(A)(4).

Q: Did the departing lawyer have to report the firm?

A: The committee applied the two-prong reporting test and found the refusal, with the lien and the 70%-of-all-fees demand, raised a substantial question about the firm lawyer's fitness, while cautioning against using a disciplinary threat solely for civil advantage.

Background and rules framework

The opinion interpreted former Virginia DR 2-105(A)-(C) (explaining fees and contingent-fee closing statements), DR 1-102(A)(4) (dishonesty), and DR 1-103(A) (reporting), against the attorney's-lien statute (Va. Code § 54.1-3932). Those fee duties are now carried forward in Virginia Rule 1.5 (including the contingent-fee writing and closing-statement requirements), and the reporting duty in Rule 8.3.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 2-105(A), (B), (C); DR 1-102(A)(4); DR 1-103(A); DR 7-104 (Code of Professional Responsibility)
• ABA Model Rule 1.5 (fees); Model Rule 8.3 (reporting misconduct)

Statutes:

• Va. Code § 54.1-3932 (attorney's lien).

Other opinions cited:

• Virginia LE Op. 1004, 1528: the two-prong test for the duty to report misconduct.
• Virginia LE Op. 977: some violations are so egregious that reasonable lawyers could not differ on reporting.

See also

• VA LEO 1732: Departing-Lawyer Fee-Split Clause
• VA LEO 1606: Fees Compendium (Retainers, Trust)
• VA LEO 1747: Honoring a Lien on Settlement Funds

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1571.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Committee Opinion
July 12, 1994
LEGAL ETHICS OPINION 1571

FEES - MISCONDUCT: ATTORNEY
LIEN IN PERSONAL INJURY
SETTLEMENT WHEN CLIENTS
CHOOSE DEPARTING ASSOCIATE.

You have presented a hypothetical situation in which a client hires Attorney A, an
independent contractor/associate of the Law Firm of Attorney B, to handle a personal
injury case. One year later, Attorney A leaves the Law Firm of Attorney B and opens his
own law practice. While Attorney A was an independent contractor/associate with
Attorney B, all lawyer work performed on client's case was performed by Attorney A.
The office staff (i.e., personal injury legal secretaries) working on the case at the
direction of Attorney A were paid by Attorney B.
You indicate that the contract for representation on the personal injury case was in
writing between the client and the law firm of Attorney B. The written contract had the
following provision:
"Further, I agree that, in the event I am dissatisfied with his services, I will have the
right to secure the services of another attorney, after reimbursing the law firm ... upon a
quantum meruit basis; however, if he has begun negotiations with the defendant or the
insurance company, I will be obligated to pay him 33-1/3% of the amount offered in
settlement of my case, whether or not the same meets with my approval or acceptance.
And I hereby authorize new counsel to honor a lien for his said fee."
You further indicate that, after Attorney A left the law firm of Attorney B, the client
chose to have Attorney A continue as counsel.
At the time the client made the decision to continue with Attorney A, an offer for
settlement had not been made by the defendant's insurance carrier.
Attorney B then wrote a letter to the claims representative for the defendant and
asserted an attorney's lien pursuant to § 54.1-3932 of the Code of Virginia. Attorney B
wrote a letter to the client which stated as follows: "In the event there is a settlement on
your case, my law firm holds a lien against same on account of attorney's fees."
You advise that, by subsequent letter, Attorney A, on behalf of client, requested that
Attorney B provide an itemization of services rendered on client's case to determine the
attorney's fees pursuant to the attorney's lien claimed by Attorney B. Attorney B did not
respond to the request for itemization of services rendered. Attorney A again wrote
Attorney B, requesting that he provide an itemization of services rendered, but Attorney
B did not respond to the second request either.
Finally, you indicate that the client's personal injury claim was settled. As a result of
Attorney B's refusal to provide an itemization of services rendered, the attorney's lien
issue has been left unresolved. In addition, there are unresolved financial matters between
Attorney A and Attorney B as to Attorney A's termination of their professional

Committee Opinion
July 12, 1994
relationship. Attorney B has demanded that Attorney A pay him 70% of all attorney's
fees paid on all cases that were opened by Attorney A while associated with the law firm
of Attorney B, including the personal injury case in question.
You have asked the Committee to opine under the facts of the inquiry: (1) whether
Attorney B has committed unethical conduct in violation of DR:1-102(A)(4) and DRs 2105(A), (B) and (C) [ DR:2-105] by refusing to provide Attorney with an itemization of
services rendered, in an effort to coerce Attorney A to pay Attorney B 70% of all
attorney's fees pursuant to the employment arrangement between Attorney A and
Attorney B; (2) whether Attorney A has an obligation, under DR:1-103(A), to report
Attorney B's conduct to the Virginia State Bar; and (3) whether Attorney B may ethically
refuse to provide Attorney A with an itemization of services rendered in a contingent fee
case.
The appropriate and controlling Disciplinary Rules related to your inquiry are DR:1102(A)(4) which states that a lawyer shall not engage in conduct involving dishonesty,
fraud, deceit, or misrepresentation which reflects adversely on a lawyer's fitness to
practice law; DR:1-103(A) which requires that a lawyer having information indicating
that another lawyer has committed a violation of the Disciplinary Rules that raises a
substantial question as to that lawyer's honesty, trustworthiness, or fitness to practice law
in other respects, shall report such information to the appropriate professional authority;
and DR:2-105(A), (B), and (C) which sets forth the ethical requirements as to fees.
The committee opines relative to your inquiries as follows:
1. You ask whether Attorney's B conduct is in violation of DRs 1-102(A)(4), and 2105(A), (B) and (C). Disciplinary Rule 2-105(A) requires that fees be adequately
explained to the client. The plain language of DR:2-105(B) indicates that the basis or rate
of a lawyer's fee shall be furnished on request of the lawyer's client. In addition, DR:2105(C) indicates the requirement for a closing statement in contingent fee matters.
Attorney has requested an itemization of services rendered on behalf of the client. Thus,
the committee is of the opinion that it is improper, under the provisions of DR:2-105, for
Attorney B to refuse to supply such itemization.
The committee is not empowered to make the factual determination necessary to decide
whether or not Attorney B's refusal to provide an itemization is an attempt to coerce
Attorney A into paying Attorney B in excess of the contractual arrangement. The
committee, however, cautions that the recited facts indicate a demand by Attorney B of
70% of the attorney's fees, not 70% of the settlement funds.
If it is factually determined that Attorney B's refusal to provide the itemization was an
attempt at coercion, such refusal may also be violative of DR:1-102(A)(4).
2. Your second inquiry concerns the obligation to report Attorney B's conduct to the
Virginia State Bar. Disciplinary Rule 1-103(A) [DR:1-1-3] contains a two-prong test for
determination of obligatory reporting of another lawyer's misconduct. See LE Op. 1004,

Committee Opinion
July 12, 1994
LE Op. 1528. First, the reporting lawyer must have information which establishes to a
reasonable degree of certainty that another lawyer has committed a violation of the
Disciplinary Rules. Second, the reporting lawyer must reasonably determine that the
violation raises a substantial question about the other lawyer's honesty, trustworthiness or
fitness to practice law in other respects. Certain violations of the Disciplinary Rules may
be so egregious that reasonable lawyers could not differ as to whether those violations
should be reported. See LE Op. 977.
The Committee cautions that in every case the reporting lawyer must be vigilant in
observing DR:7-104's prohibition against threatening to present or presenting a
disciplinary charge solely to gain an advantage in a civil matter.
On the facts presented, Attorney B's refusal to provide an itemization of services is a
violation of DR:2-105(A), (B), and (C), which, coupled with the assertion of an attorney's
lien on the settlement proceeds and a demand for 70% of the attorney's fee in all similar
cases, raises a substantial question about Attorney B's fitness to practice law in other
respects.
3. Finally, the committee reiterates its position, stated in issue #1, that Attorney B may
not ethically refuse to provide Attorney A with an itemization as to services rendered to
the client.
Committee Opinion
July 12, 1994
Legal Ethics Committee Notes. – If information about the ethics violation is a client
confidence, a lawyer may report the other lawyer’s misconduct only if the client consents
under Rule 1.6(c)(3); the lawyer considering whether to report must consult with the
client under that Rule.