Like all other aspects of the practice of law, fee awards are subject to ethical considerations. When an attorney violates his or her ethical duties to the client and is disqualified for a conflict of interest, the attorney generally is not entitled to a fee for his or her services. See Cal Pak Delivery, Inc. v United Parcel Serv. (1997) 52 CA4th 1, 15, and cases cited. In addition, fees have been denied when the attorney’s relations with the client were tainted with fraud. Clark v Millsap (1926) 197 C 765, 785.
But fees may be allowed in disqualification cases when
- there’s no objection by the client, and
- the services were rendered before the ethical breach.
In the Cal Pak case, the attorney had worked for three years before offering to sell out his client and the class his client was representing for payment to himself personally of $8–10 million. The court of appeal held that the attorney might be entitled to fees for the work performed during those three years, especially because the client was not objecting to possible attorney fees, and because the effect of the attorney’s labors wasn’t yet clear at the present stage of the litigation, before the class was even certified.
Other cases have made similar assessments: In Mardirossian & Assocs., Inc. v Ersoff (2007) 153 CA4th 257, 279, a technical violation of Cal Rules of Prof Cond 3–310 didn’t preclude recovery of quantum meruit fee because the client wasn’t prejudiced; in U.S. ex rel Virani v Jerry M. Lewis Truck Parts & Equip., Inc. (9th Cir 1996) 89 F3d 574, 580, the court held that, under California law, if a fee agreement is tainted by impropriety, the courts may refuse to enforce the agreement but allow the attorney to recover the reasonable value of services.
Although it’s good to know about the exception, the rule is paramount: Violate your ethical duties and you likely won’t get paid for your work (in addition to any disciplinary or other repercussions).
Litigate attorney fee awards with confidence using CEB’s California Attorney Fee Awards, a comprehensive and nuanced guide that’s authored by recognized authority Richard M. Pearl. And keep up developments involving some of the key ethical rules in CEB’s program Recent Developments in California Legal Ethics 2016, available On Demand.
Other CEBblog™ posts you may find useful:
- Fee Agreements: Say What You Won’t Be Doing
- Got a Fee Dispute? Know Your Client’s Rights Under the MFAA
- When Settlement Pits Client Against Attorney
© The Regents of the University of California, 2017. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.