Successor Counsel Has At Least A Warning Duty, And Successor Counsel May Have More Obligations If That Counsel Tries To Resolve Dispute With Prior Counsel.
We can report that the American Bar Association’s Standing Committee on Ethics and Professional Responsibility recently released Formal Opinion 487, for which we provide a hyperlink. It deals with successor counsel obligations, in a contingency matter, to notify the client about potential obligations the client has to prior counsel—a sequential representation situation, clarifying the very different responsibilities that apply to simultaneous, true fee-splitting situations. We summarize it below.
First, a successor counsel in a contingency case must notify the client, in writing, that some portion of fee may be due to or claimed by the first counsel even if the exact parameters of the claim are not known, especially given attorney’s liens likely possessed by the first counsel. The successor counsel must only “provide written notice that a portion of the fee may be claimed by the predecessor counsel.”
Second, if the successor lawyer takes on or needs to negotiate fees with the prior attorney on client’s behalf, successor counsel needs to advise and obtain an appropriate personal conflict of interest waiver from the client in taking on such retentions.
Third, if a dispute arises between allocation of proceeds by a prior counsel, the successor counsel must hold the dispute portion of the funds in a client trust account. (We would assume that an interpleader would also be an option here.)
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