RECOVERY OF A LAWYER’S PROFESSIONAL FEES: A SWEET BURDEN ON AN INCOMING COUNSEL?

Share this:

INTRODUCTION

The process of recovering a lawyer’s professional fees from a former client following a disengagement appears to be a straightforward matter, yet not so straightened out where a lawyer is disengaged in the middle of a transaction and former client seeks to evade payment.

In such circumstance, the incoming counsel or solicitors bear the sweet burden of acting as a gratuitous “recovery agent” for the disengaged lawyer, pursuant to a duty to ensure the integrity of the profession.

Rules of Professional Conduct (RPC) for legal practitioners in Nigeria, 2007 (“RPC 2007”), a subsidiary legislation, affirms that a client has the right to change counsel or lawyers subject to any surviving obligations, that may include payment of agreed sum (professional fees or a proportion thereof or any out-of-pocket disbursement).

RPC 2007 imposes an obligation on an incoming or succeeding counsel to ensure that his client pays to the disengaged lawyer any outstanding fees – implications of failure of this obligation has clearly ripened within Nigerian jurisdictions. We will examine this in details in this article.

A lawyer’s right to earn his fees following a disengagement is, generally, not circumscribed by the reasons for the disengagement.

Admittedly, where a disengaged lawyer is liable in damages to his former client for negligence – in the absence of any professional liability’s insurance or cover – the former client may deduct such damages from the unpaid fees.

A lawyer should endeavour to conduct his disengagement in a highly professional and ethical manner. He should maintain refinement and candour in such a way as to make the process of disengagement or dis-boarding very easy and friendly for the former client.

Given that onboarding and dis-boarding a vendor is an expensive ritual for any client. Where dis-boarding follows from an unjustifiable action of a client, a dis-boarding process conducted in an ethical and professional manner, may become an opportunity to market or clarify a lawyer’s or firm’s values to the former client.

LAWYER’S DUTIES TO A CLIENT

Legal Practitioners Act, laws of the federation, 2004 (“LPA”), recognizes that a lawyer will not be immune from liability for any damage attributable to his negligence while acting in his capacity as a legal practitioner, and any provision attempting to exclude or limit his liabilities shall be void.

The LPA recognizes 2 exceptions to the rule against non-limitation of liabilities. Circumstances where lawyer renders his services to client without reward either by way of fees, disbursements or otherwise and, under common law principle or rule of law that exempts barristers from liability in respect of proceedings in the face of any court, tribunal or any other body.

In our view, the frontiers of rule of law that exempts barristers from liabilities in respect of proceedings in the face of the court appears to be narrowing, in commercial disputes or litigation.

Given that the aphorism that cases are won in chambers has become very true. All pleading are prepared in chambers and filed in court. Arguably, pleadings prepared in chambers may not readily be stretched to mean proceedings in the face of the court.

RPC 2007 requires a lawyer to devote his attention, energy and expertize to the service of his client and, subject to any rule of law, to act in a manner consistent with the best interest of the client.

A lawyer is prevented from withdrawing from acting for his client except for a good cause, and a good cause includes any situation where client breaches a payment obligation (R. 21(2)(d), RPC 2007).

RIGHT TO PROFESSIONAL FEES

It is a famous cliché that a lawyer’s fee is his worth – a matter that nearly tend to extremism in our social environment that measures every professional benefit in money.

Yet RPC rightly affirms this importance of professional fees when it recognizes it as a good cause that justifies a lawyer to withdraw his services to his client in the event of any breach of payment obligations.

In fact, sections 15–19, and 24 of LPA are designated as the remuneration sections. All in favour of a lawyer who has ethically and professionally serviced his client and for protecting the integrity of the profession.

LPA allows a lawyer to institute an action against a client within the location or jurisdiction that he practices even if the services and engagement were performed outside such jurisdictions.

An exception to territorial jurisdictional requirement that, generally, favour where cause of action arose or where defendant resides.

RPC 2007 (R. 29(3)(b)) allows a lawyer to withhold any documents due to a client where a client fails to pay professional fees, whether or not, default results in disengagement.

A right of lien that may as well apply to any money payable to a client or former client where terms of engagement did not authorize lawyer or firm to set-off or deduct professional fee at source.

Right of lien over documents due to be delivered to a former client or client is an effective debt recovery measure in any transaction where a lawyer is disengaged in the middle of a transaction that include litigation or other dispute resolution.

Where a change of counsel occurs before or after disengagement, the incoming counsel bears the sweet burden to ensure that his client pays the disengaged lawyer’s fees (his professional colleague).

Nigeria’s practice and procedures favour a disengaged lawyer whose professional fees are unpaid because a court of law will generally not recognize the incoming counsel as counsel on record until the disengaged lawyer confirms that his fees had been paid.

Ethical practices require lawyers to see to it that a client duly pays the disengaged lawyer while ensuring that it installs transparent structures that will prevent the client to withhold or delay payment of his professional fees amongst others, by including an interest-upon-default-of payment clause in the engagement letter.

In view of LPA (s. 16(4)(b)) that allows a court (on an application ex parte or on notice) to order a lawyer to produce or deliver to client any document withheld, following disengagement. It is prudent to react extensively to apparently innocuous written enquiries from any incoming counsel.

Given the tendencies to use such correspondence as exhibits in an ex parte application to a court for an order directed against a lawyer to deliver a withheld document to client or former client.

Why bolt the stable after the horses have bolted? If the incoming counsel wilfully fails to seek details from (and assist) the disengaged counsel to recover his fees, any such actions should be deprecated as unethical conduct without more.

CONCLUSION

The duty of lawyers or law firms to carry on legal practice or services in an ethical and professional manner include the duty to ensure that his client duly pay to the disengaged (professional) colleague any outstanding fee.

It is disparaging to the integrity of the profession for lawyer’s professional fees to constitute a subject matter for litigation.

It is dishonourable for a senior lawyer or Senior Advocate of Nigeria to permit itself to be engaged by a client to frustrate a junior lawyer from earning his fees.

For our legal services market to grow, comparatively, with its peers in other climes that now include Singapore or Ghana, all stakeholders must realize that ethics is indispensable and that its first beneficiary, is the person who acts ethically.

An incoming counsel’s failure to assist a disengaged colleague to recover fees from a former client is a matter that LPDC (Legal practitioners disciplinary committee) should develop a summary procedure to enable expeditious hearing of any such complaints.

All stakeholders bear a duty to uphold ethical conducts within the legal services market.