Departing Associate Retains Contingent Fees For Ongoing Cases

In a fee dispute between an associate attorney and his former law firm over contingent fees, the Indiana Court of Appeals held that the associate was not unjustly by retaining the full fees generated by the cases.

The court majority relied on four actors

the clients chose to continue with the departing associate, there was no agreement between the firm and associate (“sophisticated parties”) as to the consequences of his departure, there were no covenenants not to competeor provisions for file ownership, and the firm was well-compensated for the associate’s work.

The majority rejected the trial court’s suggestion that the firm could sue the clients.

A dissent by Justice Crone would remand to award the firm fees based on quantum meruit

I respectfully dissent. While it may be true that C&M was “very well compensated” for Daly’s time while he was a salaried associate at the firm, that compensation is simply irrelevant to C&M’s quantum meruit claim for the 1000-plus hours that C&M’s attorneys contributed to the twenty-four cases that Daly took with him to Golitko & Daly.

(Mike Frisch)