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Ausler v. Ramsey3/7/1994
l had severed the attorney-client relationship through his inattention to the case. Farwell, 35 Wash. at 315.
Farwell accords with the modern majority rule, which examines the reasons that an attorney-client relationship has been terminated in deciding whether an attorney hired on a contingent fee basis may nonetheless recover fees for work already performed. This general rule states that, when an attorney withdraws from a case, if the withdrawal was for "good cause" or was "justified", then the attorney may recover based on quantum meruit. See Wade R. Habeeb, Annotation, Circumstances Under Which Attorney Retains Right to Compensation Notwithstanding Voluntary Withdrawal From Case, 88 A.L.R.3d 246, §§ 2-5 (1993); 7 Am. Jur. 2d Attorneys at Law §§ 262-266 (1980).
We explicitly adopt this general rule. In so doing, we find the California case of Estate of Falco, 188 Cal. App. 3d 1004, 233 Cal. Rptr. 807 (1987) persuasive. In Falco, an attorney was retained by four sisters to conduct a will contest. After investigating the suit the attorney felt it had little merit and urged his clients to take a settlement offer. The attorney sent a letter saying he would withdraw if the clients did not accept the offer because he could not work with them any longer. Falco, at 1009.
In California, ethical considerations required an attorney to withdraw from a case when he or she had "lost faith in the claim". Noting this, the court said,
an attorney employed on a contingency fee basis may not "determine that it is not worth his time to pursue the matter, instruct his client to look elsewhere for legal assistance, but hedge his bet by claiming a part of the recovery if a settlement is made or a judgment obtained . . . ."
Falco, at 1015-16 (quoting Hensel v. Cohen, 155 Cal. App. 3d 563, 202 Cal. Rptr. 85 (1984)). The Falco court, recognizing that California follows the general rule stated above, held that the client's refusal to settle could not justify an attorney's withdrawal from a contingency fee representation. Falco, at 1018. We mirror the Falco court's displeasure with an interpretation of the rule that would allow attorneys to "hedge their bets".
Contingent fee arrangements serve an important function. Many injured persons do not have the means to hire an attorney. If these people were required to pay attorney fees at an hourly rate, regardless of winning or losing, they would simply forego pursuing legal action for fear that if they lost it would ruin them. Also, many attorneys would be
unwilling to invest much time for a client who might not be able to pay. As a result, the legal system would systematically undercompensate poorer people while still compensating wealthier victims. In the typical contingent fee arrangement, attorneys in effect insure their clients and themselves against the cost of losing by covering those losses with higher-than-normal fees in winning cases. To that end, the percentages used by contingent fee contract attorneys, whether established by custom or even regulated by statute, are designed to reflect the risk of failure in a given case, as well as the overall risks in the attorney's general practice. Thus, some attorneys require a higher percentage of the recovery to be paid as fees when the case goes to trial or is appealed.
Contingent fees also have drawbacks for both the attorney and the client. The victorious client's compensation will be diminished by the attorney's higher-than-normal fee. The attorney risks a minimal recovery, or no recovery at all. This may occur because a client wants to go to trial or appeal a case that the attorney has come to believ
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