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The old wisdom against suing your client is giving way to a new normal.
According to recent reports, more BigLaw firms are breaking the old mold and suing their clients for unpaid fees. They say clients expect more of them, and so lawyers should expect more from their clients. This trend is happening at a time when law firm revenues are down and new lawyer expectations are up.
In other words, it is about money after all.
Show Me More Money
The New York Law Journal reports that "fee disputes involving the wealthiest and largest law firms are rising from the past few years when filings were fewer or initiated by smaller firms." In 2016, according to New York city filings, top firms have filed at least a dozen lawsuits in Manhattan and Brooklyn over fee disputes with their ex-clients.
Philip Touitou, a partner at Hinshaw & Culbertson, said the filings represent "the new normal." He said lawyers are no longer willing to wait months to get paid, and they are enforcing their fee agreements.
According to the Journal, Gibson Dunn & Crutcher, Kaye Scholer, Arent Fox, Loeb & Loeb, Sullivan & Cromwell, Shearman & Sterling, Perkins Coie, Brown Rudnick, Boies Schiller & Flexner and Smith Gambrell & Russell have all filed suits or arbitration claims against their clients for fees recently.
What About Malpractice Concerns?
Malpractice? Damn the clients, the big firms say. You know some partners must be thinking that, at least. Because the clients will often respond by suing them for malpractice.
DLA Piper, for example, sued a former client for $675,000 in legal fees. In discovery, the client found embarrassing firm emails saying to "churn that bill, baby" and "that bill shall know no limits."
The client publicly called it a "sweeping practice of overbilling." The firm apologized for its "inexcusable effort at humor," and the suit settled for an undisclosed sum.
Ed Poll, who writes about the law business, says to think twice before suing a client for fees. And double-check your malpractice policy, since your policy may exclude fee disputes.