Legal Partnership Disputes: Reasonable If Not Clean Cut
Submitted by New Jersey Civil Lawyer, Jeffrey Hark.
This blog is important for any lawyer who splits fees with another lawyer and any client who is thinking of switching attorneys, especially if they previously worked together. In Weininger v. Fritzen, decided November 2, the Appellate Division was forced to decide a fee dispute between two lawyers who formerly worked together. Fritzen was hired by Weininger and it was agreed he would be paid a fixed salary while receiving one-third of any contingent fee from matters he originated. One of these matters was the case of Mr. Iodice who had a personal injury case. During the case, Fritzen decided to leave his employment for Weininger and Iodice decided to take his business with him. Weininger returned $382.77 that he had spent on the matter so far to Iodice. With the help of Fritzen, Iodice proceeded to settle for $350,000. Fritzen then paid Weininger the $382.77 associated with his firm’s costs but none of the settlement. Weininger commenced legal action based on a theory of quantum meruit or the idea that a reasonable sum should be paid for work if the exact amount is not stipulated in a contract. The trial judge ruled in favor of Weininger and found he was entitled to $69,886.75.
The factors the Court used in making this decision were laid out in a 1989 case, LaMantia v. Durst. They include:
- the length of time each firm spent on the case
- quality of their work
- comparative results of each firm
- viability (chance of success) of the claim when it was transferred
- amount of recovery realized in the end
- pre-existing partnership agreements between the firms (attorneys)
In this case over 70% of the time spent on the case occurred when it belonged to Weininger’s firm and he also took most of the initial risk. By the time it was transferred success seemed more certain than when it first arrived. Moreover, it was clear the trial judge believed part of the reason the client left with Fritzen was because Fritzen offered him a better deal so it would be unfair for Fritzen to then use this to escape paying Weininger at all. The Appellate opinion notes “the judge also found the nature and quality of the representation did not change…in other words, the representation of Iodice at both firms was hardly rigorous or energetic.” Due to all of these factors and the deferential review of the trial court’s findings, the judgment was affirmed.