Thinking about replacing your lawyer with someone else because you are unhappy with the results thus far on your NY debt collection case? Worried that replacing your current NY contingency fee debt collection lawyer with another will impact your bottom line? That any recovery on the claim would be further reduced because you will be required to pay fees to the outgoing NY contingency fee debt collection attorney as well as the incoming lawyer?
The Engagement was Clear NO COLLECTION, NO FEE
The terms were very clear when the NY contingency fee debt collection lawyer took on your claim. No recovery, collection of monies, no fee. The lawyer agreed. You both signed an engagement letter, a binding contract, that the claim was to be handled on a contingency fee arrangement.
For whatever reasons, you are unhappy with the current lawyer handling your debt collection claim. Perhaps the case has taken a lot longer than expected. The result is that as of now no monies have been collected. You are considering replacing your current NY debt collection contingency fee lawyer with another.
Your concern that swapping lawyers will cause a financial impact to your company is correct. Although the current contingency fee NY debt collection lawyer hasn’t collected any monies will you may be required to pay them nonetheless.
Is it even possible that you can be required to pay a fixed dollar amount to the outgoing non-collecting NY contingency fee debt collection lawyer?
PAYING THE OUTGOING ATTORNEY
There is no question that you are able to terminate your relationship with any lawyer at any time. The question as to whether you owe a fee to the outgoing lawyer comes down to whether that lawyer is being discharged or replaced “for cause”.
If the lawyer is being discharge for wrongdoing or “for cause” they will not be entitled to a fee. This rule includes NY contingency fee debt collection lawyers. If a lawyer seeks a fee or a “lien” in a case where the client has terminated the relationship for cause that lawyer can be sanctioned by the Court.
If the NY contingency fee debt collection lawyer is terminated without cause they are entitled to be paid. The Courts are pretty clear that a lawyer should not be cheated out of a fee if terminated without “cause”. The fact that an agreement providing for a contingency fee agreement is in place does not prevent the lawyer from seeking and being paid the value of their services.
Since there has not been a collection in the case, the attorney cannot be paid the agreed upon percentage of recovery. The attorney can be paid for the reasonable value of their services.
The outgoing NY debt collection contingency fee lawyer can request that the Court fix a value for services rendered regardless of the fact that the underlying agreement provided for contingency fee collections.
Do you have questions about NY contingency fee collections or wish to place a claim? Contact FFGN. We have the experience that pays……