Transparency in Law Firms: I'll Show You Mine if You Show Me Yours

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A line of cases in California, beginning with Jewel v. Boxer (1984)156 Cal.App.3d 171, requires that attorney fees received on cases in progress (“unfinished business”) by withdrawn partners from a defunct law partnership are to be shared with the former partners according to their right to fees, regardless of which partner provides legal services in the case. The fact that the client substitutes a former partner as attorney of record in place of the former partnership does not affect this result. The ongoing matters of a firm are its assets. So partners who take them elsewhere, and the firms that take them on, are accountable for disgorging to the failed firm the fees less costs incurred to earn them. The spate of pending lawsuits and multi-million dollar settlements that arise in these situations highlights the problem of inadequate due diligence

by law firms, as well as disclosure of information to the

firms.

(Reprinted with permission of the Daily Journal Corp. (2011).)

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Edwin Reeser, Edwin B. Reeser, A Professional Law Corporation | Attorney Advertising

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