The NYLJ reports "An attorney who violates the state’s official Codes, Rules and Regulations (NYCRR) by failing to obtain a written retainer agreement or letter of engagement from a client in a nonmatrimonial case can still recover fees, an appeals court held last week in a ruling of first impression.

An unanimous panel of the Appellate Division, Second Department, said its interpretation of the rule, 22 NYCRR 1215.1, would not render it "impotent and unenforceable," as the appellant in Seth Rubenstein, P.C. v. Ganea, 2005-07813, had alleged.

Attorneys who fail to heed Rule 1215.1 place themselves at a marked disadvantage, as the recovery of fees becomes dependent upon factors that attorneys do not necessarily control, such as meeting the burden of proving the terms of the retainer and establishing that the terms were fair, understood, and agreed upon," Justice Mark C. Dillon (See Profile) wrote for the court. "There is never any guarantee that an arbitrator or court will find this burden met or that the fact-finder will determine the reasonable value of services under quantum meruit to be equal to the compensation that would have been earned under a clearly written retainer agreement or letter of engagement."

Since 2002, attorneys have been required to obtain retainer agreements or letters of engagement from all non-matrimonial clients under 22 NYCRR 1215.1, a rule that was created by the four Appellate Divisions (matrimonial cases are governed by a stricter rule, 22 NYCRR 1400.3).

The Second Department examined the implications of the 2002 rule after numerous trial courts reached different conclusions ."