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Block to Perpetual Attorney Fees
The principal issue in the case, and the focus of this article, is whether clients who had departed for the new firm had a continuing obligation to pay that 5% fee to the old firm as a matter of contract law. (Additional ethical questions that may be raised by such arrangements are beyond the scope of this article.) The case was subsequently settled, and the court's unpublished decision did not advance beyond the 'tentative' stage. Nevertheless, the rationale of this decision is of interest to any entertainment lawyer who has adopted, or even considered, this alternative to billing by the clock.
The Superior Court held that under the facts presented, contractual principles (and to a lesser degree, ethical rules) blocked the older firm from collecting because the arrangement was unenforceable. Hirsch Wallerstein Hayum Matlof & Fishman LLP v. Hirsch Jackoway Tyerman Wertheimer Austin Mandelbaum & Morris (L.A. Sup. Ct. BC 320128). Would the result be the same in New York? As discussed further below, a 56-year-old Court of Appeals decision seems to be the only reported appellate case with comparable facts, and a pure attorney-client relationship was not presented.
The Hirsch Jackoway Case
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