The end of the relationship can come from any number of reasons, but the end is reached either before or at the end of the underlying litigation.
<strong>Termination by client</strong>
It is the general rule in the United States, and the rule in New York that an attorney’s representation of a client may be terminated at any time by the client, either for good cause or for no cause.
Analysis of a client’s termination of the attorney’s retention [hereinafter "termination"] starts with determination of whether the termination was for good cause or for no cause.
While the difference between "for cause, good cause, or cause" for termination and "no cause" has been endlessly debated, a "for cause" termination may be based upon misconduct which manifestly does not rise to the level of attorney malpractice.
<strong>Where the discharge is for
cause,the attorney has no
right to compensation</strong>
Where the discharge is for cause, the attorney has no right to compensation. This rule exists regardless of the terms of a retainer or other agreement between the attorney and the client. Traditional contract principles are not always applied to govern disputes between attorneys and clients.
Where the discharge is for cause, the attorney has no right to compensation or a retaining lien, regardless of pleading or stated defenses. "This rule is well calculated to promote public confidence in the members of an honorable profession whose relation to their clients is personal and confidential." "An attorney discharged for cause has no right to a fee or a retaining lien."
<strong>Where the discharge is without
cause, the attorney is limited
to recovering in quantum meruit</strong>
"When an attorney is discharged without cause, the attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the services rendered whether that be more or less than the amount provided in the contract or retainer agreement." This rule, set forth by the Court of Appeals exists as a matter of law, whether pled or not, and whether set forth as an affirmative defense or not.
Where the discharge is without cause, the attorney is limited to recovering in quantum meruit the reasonable value of the services rendered. The courts clearly "possess the traditional authority to "supervise the charging of fees for legal services," pursuant to their "inherent and statutory power to regulate the practice of law."
<em>Quantum meruit</em> means "as much as he deserved, and is premised upon the finding of an implied promise to pay as much as he reasonable deserved." If it is determined that the termination was without cause, recovery should be determined to be an amount which "they reasonably deserved."
The Court of Appeals has found that where the discharge is without cause, as a matter of law, the attorney is limited to recovering the reasonable value of the services rendered, in quantum meruit.
"<strong>Cause" is not the
equivalent of "malpractice"</strong>
Good cause for termination is not the same as malpractice. Attorney malpractice, defined as a deviation from good and accepted practice, which proximately damaged the party, in which, but for the negligence of the attorney there would have been a different or better result is not the same as good cause for termination.
<strong>"Termination for cause"</strong> has arisen in many situations in which malpractice was not even discussed, much less claimed. For example, substantial delays in prosecuting the case or failing to bring the action until 2 days before the statute of limitations is sufficient; failure timely to obtain medical records is similarly sufficient .
Failure to retain an expert is similarly sufficient . "Employment [which] contravenes specific legal requirements is sufficient, as is abandonment of a case, ; or a conflict of interest; a refusal personally to try a case ; or a failure to disclose a settlement offer are all these examples misconduct which resulted in termination for cause, with no fee to the attorney. They do not amount to malpractice, however.
Termination for cause threshold lies well below any question of malpractice. As an example, Dagny Management Corp.,supra, is instructive. Friction between the client and the attorney grew over the management of the settlement funds, in which the attorneys frustrated, but did not destroy, the settlement. The Appellate Division determined that the "firm’s interference with the client’s right to settle constitutes misconduct sufficient to rise to a level warranting discharge for cause and forfeiture of its fee", citing De Luccia v. Village of Monroe, 180 AD2d 897 [3d Dept, 1992]
The difference flows logically from the question of damages is that in malpractice there is a positive claim for damages, over and above fee considerations from attorneys; in the question of termination for cause, there can be but a reduction of the fees paid, but no positive claim for damages. The heightened burden for malpractice logically accompanies the heightened possibility of damages.