An important risk-management issue for lawyers involves ethically and effectively securing payment of unpaid fees from current or former clients. This issue is especially prevalent where there is a breakdown in the attorney-client relationship and the lawyer either withdraws from a representation or is discharged without cause by a client. In addition to a plenary action for damages, attorneys are vested with two significant remedies: (1) the statutory charging lien; and (2) the common-law retaining lien. Notably, an attorney may simultaneously pursue a plenary action, a charging lien and a retaining lien, as the three remedies are "not exclusive but cumulative."1 Determining which remedy is appropriate will often depend on the nature of the underlying case, the recovery sought in that action and the former client's ability to satisfy the outstanding legal fees.
Charging Lien
Under New York Judiciary Law §475, an attorney is given an equitable interest in the proceeds of a client's cause of action that was created through that attorney's efforts. Specifically, §475 provides that an "attorney who appears for a party has a lien upon his or her client's cause of action…and the proceeds thereof in whatever hand they may come." The Judiciary Law further provides that a court, upon the petition of either a client or attorney, "may determine and enforce the lien."
