Attorneys are accustomed to being called “ambulance chasers” or “sharks,” always interested in increasing their fees. Even if a lawyer reduces a bill for an unhappy client, that conduct may backfire if the client isn’t satisfied with the reduction. The attorney cannot later renege on the gratuitous fee discount or reduction, no matter what the reason. In a March 3, 2017, ruling, the Massachusetts Appeals Court − the commonwealth’s intermediate appellate court − held that a voluntary “professional courtesy credit” issued unconditionally to a client cannot be rescinded by a law firm when the client fails to timely pay its reduced bill. It just wouldn’t be “fair.”
The case, BourgeoisWhite, LLP v. Sterling Lion, LLC, No. 16-P-45, 2017 Mass. App. LEXIS 21 (Mass. App. Ct. 2017), arose from a fee dispute between a Worcester area law firm and a long-term client. The firm represented the client in a lengthy, contentious and expensive litigation. The lead attorney advised his client that he felt the case against it was “unfair” and “without merit,” and he issued a series of professional courtesy credits and discounts because he was “bothered” by the amount of fees being incurred, and was “trying to be fair.” The case was tried before a jury with an unfavorable result. Apparently in response to the loss, the attorney told the client to “throw away” the next bill and then reduced a subsequent one by $22,000, advising the client that he was discounting the fees “because you are a friend in a bad situation and I am not looking to profit from that.” However, when the client stopped paying his bills, the attorney changed his tune and filed suit for breach of contract, seeking unpaid fees and proposing to rescind almost $30,000 worth of discounts.
Although the trial court was of the opinion that the “discounts” amounted to unenforceable attempts to modify the original fee agreement, the appellate court disagreed. It characterized the discounts as unilateral waivers that were enforceable, despite the fact they were provided without consideration. Moreover, the court focused on the fiduciary nature of the attorney-client relationship, noting that when it comes to attorney fee agreements, the general rules of contracts do not necessarily apply. A rescission of professional courtesy credits would not comport with the fiduciary nature of the relationship and would be unfair to the client.
In the end, the firm was able to obtain a judgment for the outstanding fees, minus the discounts previously offered. Considering that the firm was not hit with a counterclaim for legal malpractice, they should consider this a happy ending. The moral of the story is, as it always is for an attorney: the client’s interests come first.