Venue and value for attorney liens -- McCoy v. Hershewe Law Firm (Mo. App. W.D. Apr. 10, 2012)

In McCoy v. Hershewe Law Firm, the Western District of Missouri determined two issues relating to litigation of attorney liens in a case where an attorney Aaron Smith started a case at the Hershewe Firm, took the case with him when he left, and then added Bartimus Frickleton Robertson & Gorney (BFR&G) as co-counsel before the case settled for $4.7 million.

First, when a law firm intervenes to adjudicate its lien, the firm as an intervenor does not have the power to cause a transfer of venue under Missouri Revised Statute sec. 508.012.

Second, and more significant for our purposes, the appellate court determines that the first firm that handled a matter, the Hershewe Firm, should receive only $40,000 of an attorney fee award of $1.9 million. Of note, the Hershewe Firm's expert testified that its contribution -- primarily taking the case and retaining two experts -- justified an award of 50% of the fee. The opposing expert claimed the Hershewe Firm's work only took about 16 hours, and -- ascribing a rate of $300 per hour -- the firm should receive $4,800 in quantum meruit.

Reviewing the evidence, the trial court estimated the amount and type of work each group of lawyers did, each firm's reputation, and the fact the fee was contingent. The trial court also took into account the Hershewe Firm's testimony that Smith -- who had done the majority of lawyer work for which the Hershewe Firm took credit -- was not competent to litigate the matter.

Reviewing the award, the appellate court found the trial court also necessarily considered the "amount involved" and the "results obtained," and that the services the Hershewe Firm provided were "minimal, but important." On this basis, as well as the amount of additional work required, the appellate court held the award of $40,000 in fees was reasonable.

Of particular note, the appellate court also emphasized that the firms involved did not have any contractual arrangement in place. Thus, McCoy stands as yet another case that should encourage firms to use separation agreements. See my article here: http://bit.ly/AqQMW8

The McCoy case is available at http://www.courts.mo.gov/file.jsp?id=53493