In the past we have often visited the subjects of engagement letters, legal fees and the wisdom (oroftentimeslack of it) of suing when clients don’t, won’t or can’t pay what they owe. See, " Weighing the Risks of Suing for Fees," NYLJ, Sept. 7, 2010, and " Fixed Fees, Suing Clients, Tardiness Due to Technology," NYLJ, July 5, 2011. But every now and then along comes a case which proclaims thatsometimesthere is a path to recovery in the courtroom for lawyers who have been shortchanged by their clients. So, given our track record in this column of discouraging fee suits, it is only fair that we report on a case where the planets and stars lined up behind an aggrieved law firm. So it was in Pryor Cashman v. U.S. Coal, 651908/11, NYLJ 1202588022493, at *1 (Sup., N.Y., Decided Feb. 4, 2013).
Firm Sues Client
In July 2006, U.S. Coal hired Pryor Cashman to perform the legal work in connection with the acquisition of numerous coal companies. Pryor Cashman provided an engagement letter containing the terms of their agreement, including (1) the specific scope of the legal services; (2) a list of billing rates for Pryor’s attorneys, law clerks and paralegals; (3) expenses that may be incurred, to be reimbursed by U.S. Coal; (4) an explanation of the firm’s billing practices, such as sending a monthly invoice containing the fees and expenses incurred during the previous month, and the firm’s right to impose interest on balances outstanding for more than 30 days; (5) an explanation that U.S. Coal is free to terminate the attorney-client relationship at any time, and that Pryor would withdraw in compliance with applicable law; and (6) an agreement to waive certain conflicts of interest.
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