Legal ethics: Is law practice ‘just a capitalist enterprise’?

According to an Oct. 4 Law 360 Legal Ethics release, a New Jersey state superior court judge questioned whether the practice of law is "just a capitalist enterprise" when faced with an attorney fee dispute. Unfortunately for Gregg Stone, the former attorney for a plaintiff in a personal injury lawsuit (Peter H. Meister et al. v. Verizon New Jersey Inc. et al., ESX-L-4738-17), the judge ruled that, because of the lawyer's standing he was not entitled to express an opinion whether a potential settlement should be approved by the court. The attorney was left only with the opportunity to seek compensation for the work he had provided in the case prior to withdrawal but would not be permitted to object even if he felt the settlement was not enough. Although subsequently the court orders were deleted because of an error categorized as "typographical," without further comment the judge noted there would be no change in the substance of the decision.

In expressing his irritation that he had to deal with this issue, the judge included a statement in his order that it was "unfortunate" the dispute arose in the middle of the final settlement negotiations and "should resolve, with certainty, any lingering doubt that the practice of law, that storied profession of Marshall and Jefferson and Lincoln, is really now just another capitalistic enterprise."

After two years representing his client, Stone withdrew claiming a breakdown of the attiorney-client relationship. David Mazie, the succeeding counsel was the one representing plaintiff in the settlement negotiations. The pebble in the shoe here was created by Stone requesting that (1) he be heard in connection with the settlement because his retainer agreement entitled him to receive a portion of the settlement amount; and (2) the "eleventh hour" appearance by Mazie did not take into consideration the efforts of Stone over several years.

This argument was rejected by the court on the ground that it was not supported by case law. Stone could petition for a share of the ultimate attorney fee award based upon the extent of his services on behalf of plaintiff, pursuant to his retainer agreement with her. However, Stone had lost his right to intervene in the settlement approval process when he withdrew from the case because from that point forward his retainer agreement was no longer binding. The court's postscript was that this entire incident did not reflect well on the legal profession.

The court noted: "While lawyers may indeed make a client's life better through their advocacy and vigilant protection of the client's interests ... they are uniquely able to make it seem as though they are not doing so when quarreling, as they are here, over who gets to spell out how much they should be paid from their paralyzed client's recovery and why one is more entitled to do so than another." A footnote by the court expressed regret that it appeared the two attorneys were more interested in deciding what portion of the fee each lawyer was entitled to receive rather than which could represent the plaintiff's interests.

Generally, the word practice when used in connection with a field such as law is interpreted as the conduct of a profession rather than a business. Under both the California and American Bar Association rules of professional conduct (each designated Rule 1.5 Fees), the applicable provisions for the client-lawyer relationship relating to fees provide for the lawyer's fee to be reasonable. Among other things, reasonableness is determined by (1) time and labor; (2) amount involved and results obtained; and (3) nature and length of the professional relationship with the client.

Nothing is explicitly discussed in either set of rules considering this situation. However, these provisions of the rules make it clear that, while the client's ex-lawyer has the right to subsequently seek a determination of his legal fees using these specifications, there is no assurance, right or provision for later settlement participation by a lawyer who has previously withdrawn. Unfortunately, although the court's categorizing this fee dispute as an argument over fees as a business matter was accurate, it once again continues to demonstrate the historical emphasis on fees that has been chipping away at the professional categorization of the profession. This is the result of the way lawyers have come to treat what we do. Had I been aware of this denigration of the profession's image back in 1955 when I applied for admission to law school, I am sure I would have gone in a different direction. I venture to say I am not alone in this view.

Perhaps it is time for the profession as we know it today to take stock and view it in terms of 21st century society. Mark A. Cohen (writing in the Mar. 29, 2018 Issue of Forbes) argues that law is both a profession and an industry and should be regulated this way. He says: "Regulation of the practice of law and the business of law should be bifurcated. Let lawyers regulate practice and independent business professionals oversee the industry. Conflation of ther two is detrimental to the profession, the industry and society." 