Brief Fact Summary. An attorney entered into to contingent fee agreement to "force probate" of a client's wife's estate. The validity of the contingency fee was at issue.
Synopsis of Rule of Law. "[A]n attorney who enters into a fee contract, or attempts to collect a fee, that is clearly excessive under DR 2- 106 should not be permitted to take advantage of the [rule allowing recovery despite innocent violations of rules]."
Issue. "[W]hether the contingency fee contract between White and McGrory is 'clearly excessive' under Disciplinary Rule 2-106 of the Code of Professional Responsibility, Tenn. Sup.Ct. R. 8, and is, thus, unenforceable?"
• "[I]f the contingency fee contract is unenforceable, whether White may, nevertheless, recover attorney's fees on a quantum meruit basis?"
Held. Yes. The court first lays out DR 2-106 and then recognizes its factors are "to be used as guides", but "ultimately the reasonableness of the fee must depend upon the particular circumstances of the individual case." The court recognized that the matter at issue was not very difficult or novel, the Plaintiff did not advertise himself as a probate specialist, there was no evidence that this matter took up so much time the Plaintiff could not work on other clients matters, and finally the results obtained by the Plaintiff were not particularly good. Most importantly, if the Plaintiff were to have been paid the fee he was requesting, he would be earning $950 per hour. Far in excess of the "fee customarily charged in the locality for similar legal services."
• No. The court agreed "attorneys should not be penalized for innocent snafus, such as an oversight in drafting that might render their fee contracts unenforceable. To do so would be unfair to the lawyer who had otherwise diligently pursued the client's interests, and it would result in a windfall to the client who had benefitted from these services." On the other hand however, "an attorney who enters into a fee contract, or attempts to collect a fee, that is clearly excessive under DR 2- 106 should not be permitted to take advantage of the [rule allowing recovery despite innocent violations of rules]." The court reasoned, "[a] violation of DR 2-106 is an ethical transgression of a most flagrant sort as it goes directly to the heart of the fiduciary relationship that exists between attorney and client. To permit an attorney to fall back on the theory of quantum meruit when he unsuccessfully fails to collect a clearly excessive fee does absolutely nothing to promote ethical behavior. On the contrary, this interpretation would encourage attorneys to enter exorbitant fee contracts, secure that the safety net of quantum meruit is there in case of a subsequent fall."
Discussion. Quantum meruit relief is not available to attorney's who charge their client's excessive fees in violation of the rules of professional responsibility.