Monday, September 16, 2013

Not Just a Contract

The Maryland Court of Appeals has imposed an indefinite suspension with the right to seek reinstatement after 60 days in a matter where the attorney was retained to assist in the formation of a limited liability corporation.

The attorney was consulted and claimed he promptly began to work on the matter. Several months later, a retainer agreement was executed and he was paid $2,000 of an agreed $3,000. The fee was placed in a personal account. He thereafter neglected the matter and failed to communicate with the client.

One interesting issue led to a concurring opinion.

The hearing judge had found that there no attorney-client relationship until the fee was paid and retainer signed.

Judge Adkins disageed with the "contractual" approach of the hearing judge, but concurred because the finding that the full fee was not earned was not clearly erroneous:

Although I concur in the Majority opinion, I fear that the Majority opinion could be interpreted as grounds to sanction diligent, rule-abiding attorneys. Often an attorney is asked to "jump right on" a client's problem, before execution of a formal retainer agreement, and thereafter will take a portion of the retainer commensurate with the work they have already done. In this case, the hearing court found that no attorney-client relationship was formed until the formal agreement was executed; therefore, it was impermissible for the attorney to allocate a portion of the retainer for work previously done. Most respectfully, I disagree with the Majority's deference to the hearing court's conclusion because it inappropriately stresses the importance of a retainer agreement and will discourage attorneys from promptly beginning working on a client's matter until after the agreement is signed and the retainer paid...

Based on the hearing court's findings, and the Majority opinion, it would be wise for attorneys to include language, in their retainer agreements, that a portion of the retainer fee can be used to pay for work done prior to the effective date of the retainer agreement.

Judge Cathell joined the concurring opinion.

In 2009, the attorney was suspended for 60 days with fitness by the District of Columbia Court of Appeals for misconduct committed while associated with Pillsbury Winthrop Shaw Pittman. The sanction was a consent disposition. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2013/09/the-maryland-court-of-appeals-has-imposed-an-indefinite-suspension-with-the-right-to-seek-reinstatement-after-60-days-in-a.html

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