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LawBiz® TIPS – Week of February 16, 2016

Special Appearances: Liability and Fee Splitting

Special appearances—appearances in which a contract attorney makes a special court appearance on behalf of another lawyer—can have downsides: liability and fee-splitting issues.

The lawyer who engages the contract "pinch hitter" becomes responsible—in a malpractice sense—for any errors committed, even in a seemingly simple case. This may seem obvious. But think of the reverse, where the attorney making the special appearance becomes liable for the errors of the primary lawyer or even of other lawyers who made previous special appearances.

Consider the 2000 case of Streit v. Covington & Crowe, in which the California Court of Appeal held that an associated attorney cannot escape liability from the duty of an attorney-client relationship by claiming that he or she made a "special appearance" only. In this decision, plaintiff Streit named the firm Covington & Crowe in a malpractice action against her attorney, Diggs, even though the firm's only contact with the plaintiff was making an appearance at a hearing on a motion for summary judgment as a professional courtesy to Diggs. The appeals court held that, in this instance, an attorney-client relationship was created by implication and that the division of effort by the attorneys was a distinction in degree, not a distinction in kind.

A second pitfall created by special appearances involves the issue of fees. When firms outsource for a special appearance, they are not required to bill the client at their cost for the contract attorney's time. Model Rule 1.5 holds that fee splitting is acceptable if both lawyers involved contribute something of value, if the client agrees in writing, and if the total fee is reasonable. However, it is vital that the attorneys involved have their own fee arrangement in writing. Courts from California to Michigan have ruled that split fees cannot be collected in full without complete documentation from either the client's or the attorney's side.



Special Appearances: Liability and Fee Splitting

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