An attorney may be fired for any reason at any time;  this is the rule in NY as well, apparently in California.  In this case, Mardirossian & Associates, Inc. v. Seth Ersoff, et al., ___Cal.Rptr.3d___, 2007 WL 1732896 (Cal.App. 2 Dist. 2007)  reported by Hinshaw attorneys were retained on a commercial case on a contingency.  They were fired, and the clients settled the case immediately thereafter.  What happens?

"Seth Ersoff and Sugar Ray Leonard retained Mardirossian & Associates, Inc. to represent them in a suit for breach of contract and fraud against Universal Management Services, Inc. (“UMSI”). Because of concerns about obtaining a recovery in the case, Mardirossian agreed to represent both Mr. Leonard and Mr. Ersoff for a 50 percent contingency fee of any settlement or award. The retainer agreement also provided that Mardirossian would have a lien on the cause of action for any recovery based on the reasonable value of legal services provided by Garo Mardirossian at $400 per hour and other firm attorneys at $220 per hour. The retainer further provided that if Mardirossian were discharged by the client, Mardirossian could seek the contingency fee or the reasonable value of services based on the quoted rates. Id. at *2.

After Garo Mardirossian had met personally with Mr. Ersoff and Mr. Leonard to determine he could represent both in the lawsuit, he obtained a signed waiver from each which stated they had “separate counsel with whom I have been given an opportunity to consult regarding this matter. I realize there may be conflicts between my goals and those of (Mr. Leonard or Mr. Ersoff). If there are any such conflicts of interest, I waive them.” Id. at fn. 2. After Mardirossian had filed the complaint, worked the case for seven months and prepared for a mediation scheduled for April 1999, Mr. Ersoff terminated the firm and settled the case nine days later for $3.7 million, while represented by a new firm. Id. at *2.

In November 2002, Mardirossian filed a complaint for quantum meruit seeking at least 50 percent of the $3.7 million settlement. The lower court found in favor of Mardirossian and held that it was entitled to reimbursement for the reasonable amount of hours worked on the case six years earlier. Since no hourly time records had been kept on this contingency matter, the attorneys who worked on the case reviewed the file and testified that they had spent approximately 3,700 hours on the case. The jury determined that 2,392 hours were reasonable for reimbursement, which resulted in an award of $645,440, plus interest. This appeal by Mr. Ersoff followed. Id. at *5.

Mr. Ersoff argued on appeal that because detailed time records were not kept by Mardirossian, the testimony from the firm’s attorneys regarding the estimated hours spent on the file was merely guesswork and should have been excluded from evidence. Id. at *6. The court rejected Mr. Ersoff’s argument, noting that there was no legal requirement that an attorney submit billing statements to support an attorney fee claim. “An attorney’s testimony as to the number of hours worked is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” Steiny & Co. v. California Electric Supply Co., 79 Cal.App.4th 285, 293, 93 Cal.Rptr.2d 920 (2000). The court rejected the cases cited as supporting precedent by Mr. Ersoff. It also noted that this case was distinguishable because each of the attorneys who testified had personal knowledge of the services performed for Mr. Ersoff and testified about the complexity of the issues and extent of the work that was necessary. 2007 WL 1732896 at *7. These are the types of factors relevant to proving the reasonableness of the fees, factors which also include the attorney’s skill and learning as well as age and experience. See Los Angeles v. Los Angeles-Inyo Farms. Co., 25 P.2d 224 (1933). It was appropriate for the parties to use expert witnesses to also address the issue of reasonableness. See Mattheisen v. Smith, 60 P.2d 873 (1936). The fact that the jury awarded less than the number of hours claimed by Mardirossian indicated that the jury had evaluated the testimony of the Mardirossian attorneys as to the time spent, as well as the expert testimony on the issue and had substantial evidence to support their findings.

Mr. Ersoff also contended that Mardirossian violated California Rule of Professional Conduct 3-310, which provides that an attorney may not represent multiple clients where the interests of the clients may potentially conflict without written consent following written disclosure. 2007 WL 1732896 at *12. The court noted that whether forfeiture of the right to collect the fees is appropriate depends on the egregious nature of the violation. Id. at *14, citing Pringle v. La Chapelle, 87 Cal.Rptr.2d 90 (1999). The court upheld the findings below that the written consent was adequate but that even if it was not, any violation was not egregious and therefore did not justify fee disgorgement. The court also agreed with the lower court that Mr. Ersoff would be unjustly enriched if his fee obligation to Mardirossian were excused. "