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A law firm is entitled to be paid for its legal services even if a client doesn’t give written consent to a fee-splitting agreement with another firm, the California Supreme Court ruled unanimously Monday. Huskinson & Brown, a Manhattan Beach, Calif., firm specializing in the defense of health care providers, argued that it should be paid by Appell & Wolf for 20 hours of work in spite of the firms’ failure to get the client’s written agreement in violation of the state’s fee-splitting law, California Rule of Professional Conduct 2-200. But the Supreme Court found that the law does not preclude lawyers from recovering the reasonable value of their services — a so-called quantum meruit award. “Rule 2-200 does not purport to restrict attorney compensation on any basis other than a division of fees,” Justice Marvin Baxter wrote. A quantum meruit award “involves no apportionment of the fees that the client paid or has agreed to pay and therefore is not a fee division subject to rule 2-200′s client disclosure and consent requirements.” Huskinson & Brown entered into an oral agreement with Appell & Wolf to represent Beverly Sanchez in portions of a medical malpractice case against a health care company. The firms agreed Huskinson would get 25 percent of attorneys fees. When Sanchez got a $250,000 judgment, Appell & Wolf received nearly $74,000 in fees but refused to pay Huskinson’s 25 percent. A trial court later awarded Huskinson its 25 percent share of fees on a claim of unjust enrichment and $5,800 for the work it had done on the case. Los Angeles’ Second District Court of Appeal overturned the lower court on the grounds that any division of attorneys fees that violates Rule 2-200 is illegal. The Supreme Court took the case only on the quantum meruit issue. Rule 2-200 does not prohibit attorneys from “making or accepting client referrals, from agreeing to divide the labor on a client’s case or from working on cases with attorneys from other law firms,” Baxter wrote. The rule bars attorneys who engage in such conduct from “dividing client fees among themselves” when certain requirements, such as written client consent to the fee division, have not been met. The court noted that Business & Professions Code statutes also specify that a client may void an agreement if attorneys fail to comply with the statutes’ requirements. But Baxter noted that even when an agreement is voided, the attorney remains entitled to collect a reasonable fee. The Supreme Court remanded Huskinson & Brown v. Wolf, S107616, to the appeals court for further proceedings.

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