There’s a fee dispute in the Eastern District of Texas over, it’s alleged, $25m owed to Mount Spelman & Fingerman, P.C. by its former client, Geotag, Inc. I’ve uploaded a copy of the judge’s decision from October 2, 2014, here: show_temp
Boiled down, the client retained the firm to sue 350 or so defendants but after just over a year, fired the lawyer. The fee agreement purportedly gave the firm the right for any reason on termination to get either its full hourly fees or a contingent fee, whichever was greater. (Which is insane, but I digress.) But that issue was not what the court addressed.
Instead, the firm moved for a preliminary injunction, asserting that it had a lien over the money and that the patentee was going to send the money out of the country. The court first held that a contractual lien was not prohibited by Texas’ ethical rules, even though there were two opinions which the court viewed as irreconcilable on that point. So, firm wins that round.
But, the court reasoned that the fee agreement was not clear as to which cases it applied to, and under what circumstances. Because of the lack of clarity, it ultimately concluded that the lawyer had a lien only as to cases fully settled/adjudicated prior to termination, and even those it put limitations on. So, firm loses that round.
This is the second Texas case in just the last few months to raise up these “I get paid even if you fire me no matter what” clauses, the other invoking Parallel Networks and Jenner & Block, which you can read about here. I’ve written an article about these purportedly ethical provisions, and if you email me I’ll shoot it to you. Ask for “Dear Lawyer.”
If you have and can forward a copy of this fee agreement to me, I’d love to see it. It did not seem to be on Pacer and may, of course, be under a protective order. Please don’t send it if it is! 🙂