By Richard H. Adler, Attorney at Law
When an individual retains an attorney for a personal injury case, the fee agreement is commonly written on a contingency basis, permitting the client the opportunity to secure professional legal representation without the need to pay for the attorney’s services in advance.
Just as a client has the right to retain legal counsel, he/she reserves the right to discharge that attorney. If a client is dissatisfied with counsel, consultation with another attorney or actual substitution of a new attorney are available options. The rules regarding discharge of counsel and hiring a new attorney are clear and simple.
Under the Rules of Professional Conduct governing the practice of law, a discharged attorney still must take reasonable steps to protect the former client’s interest. Nevertheless, two issues often arise when a client seeks to change attorneys:
Who has the right to possession of the client’s file?
To what extent is the former attorney entitled to compensation for legal services rendered?
A. CLIENT’S FILE
The law in the state of Washington clearly holds that the client file belongs to the client since he/she has paid (or, in case of contingency fee, will be paying) for the work performed by the attorney. Moreover, Formal Opinion Number 53 of the Washington State Bar Association provides:
Client’s Right to Files Office copies of probate and court files and correspondence pertaining thereto, as distinguished from papers and documents delivered to an attorney by his client or paid for by him, are the property of the attorney. But, in view of the fact that the client has paid for the work represented by the office files, and in view of the professional relationship itself, a client on his request is entitled at his cost, if any is involved, to have copies of all of the papers and correspondence in the file. This is so especially if the employment is terminated before completion, and the client, after discharging his obligations to the attorney, desires to employ another lawyer in the pending matter and to turn a copy of the file over to him. A lawyer’s duty extends to protecting the interest of the client in all matters in which he has represented him, even though employment is terminated. [Emphasis added.]
Attorneys generally comply with this rule and transfer the client’s file upon written request. At the time the file is transferred, the client should be prepared to reimburse the former attorney for duplication costs. Some attorneys will withhold their hand-written notes and claim these notes are not part of the file because they amount to work product.
B. PAYMENT OF DISCHARGED ATTORNEY’S FILE
Disputes can arise over the timing and extent of payment of the discharged attorney’s fees. One assumption made by clients and health care providers is that payment of the attorney’s fees is a condition of the discharge. Generally, discharge of the attorney is not conditioned on the contracted payment of fees. When the fee agreement provides that the contingency fee converts to an hourly fee upon discharge and is due immediately, the client may be obligated to pay at that time.
Practically speaking, the new attorney will arrange for payment of fees with the discharged attorney at the end of the case. Regardless of how payment of the fee is resolved, the discharged attorney must transfer the client’s file. Another assumption made by clients and health care providers is that when one attorney is discharged and another retained, one-third of the settlement is owed to the first attorney, one-third is owed to the second attorney, and the client is left with only one-third. Generally, the client retains two-thirds of the settlement. However, the new attorney and client may agree to adjust that contingency percentage amount given the nature of the case, predicted case value, client needs, amount of the discharged attorney’s fee, and hours of work to be performed.
In most cases, the attorney fee will remain one-third of the recovery, despite the change of attorney. The discharged attorney and the new attorney typically resolve the fee issue by splitting one-third of the recovery. Division of the contingent fee was addressed by the Washington Supreme Court in a 1982 case, Ross v. Scannell, 97 Wn.2d 598. That decision reaffirmed the law in Washington that where the compensation of an attorney is to be paid contingently on the successful completion of a case, and he/she is discharged or prevented from performing the service, the attorney’s fee is not based upon the contingent fee agreed upon, but on reasonable compensation for services actually rendered.
This Scannell rule has implications for the discharged attorney, the second attorney, and the client.
For the discharged attorney, a fee will be paid at the end of the case, based upon reasonable compensation for actual time and services provided to the client. The discharged attorney will not be able to claim one-third of the recovery.
The new attorney must consider the potential value of the case since the contingent fee will need to be shared with the former attorney. For example, if the value of the case is $30,000.00 and the contingency fee agreement requires payment of one-third to the attorney, then $10,000.00 will be available to cover the attorneys’ fees. If the discharged attorney claims a significant amount of hours of service in the case, a second attorney may have to decline involvement because too large a part of the fee may be due to the discharged attorney.
For the client, a change from one attorney to a second attorney is a decision that requires careful thought. If there are issues of concern for the client concerning the first attorney’s handling of the case, the client should communicate those concerns to the first attorney early. Otherwise, the client may have difficulty finding a second attorney willing to take over representation because the case value is not sufficient to compensate both attorneys for the work required.
Whenever Adler Giersch, P.S., is asked to consider taking on the case of an individual either currently or formerly represented by another attorney, we are guided by several conditions:
The client’s right to quality representation and service by the law firm handling his/her case.
The client’s right to discharge his/her attorney at any point in time.
Whether the quality of representation the client received from the first attorney would impact a second attorney’s case plan strategy and ability to bring about a fair and effective resolution of the case.
The value of the case in light of the first attorney’s “lien” for time he/she spent on the case.
Adler Giersch, P.S., is committed to providing the highest quality legal representation and legendary service to victims of personal injury through advocacy, accessibility, and knowledge. When we are asked to evaluate a case where an individual is currently represented by another attorney, our goal is to point that individual in a direction that would promote the most fair and effective resolution of the claim. Advising the client of their options may include:
Returning to the first attorney to express and try to resolve dissatisfactions;
Recommending the client handle the file themselves at that point in time;
Referring on to other counsel to handle the case; or
Discharging the first attorney and hiring new counsel.
As always, we are available to discuss situations that arise with you and your patients. Simply give us a call.
Very truly yours,
ADLER GIERSCH, P.S.
Richard H. Adler
Attorney at Law
1 WE ARE GRATEFUL FOR THE WORK OF CONTRIBUTING AUTHOR, BARBARA WINTER-COHEN, CASE ANALYST AT ADLER GIERSCH, P.S.