In a recent decision, the Pennsylvania Supreme Court significantly limited a law firm’s liability to pay fees generated for work performed by an attorney at a predecessor law firm when bringing a contingency fee matter to a successor firm. In Meyer Darragh v. Middleman et al., Nos. 8-9 WAP 2015 (http://www.pacourts.us/assets/opinions/Supreme/out/J-15A-2016mo%20-%201026343226908631.pdf?cb=1), Meyer Darragh, the predecessor law firm, sued the departing attorney’s new firm, Malone Middleman, for breach of contract (because Meyer Darragh had an agreement with the departing attorney on the fee split should the contingency fee case settle).
The Supreme Court was unpersuaded with Meyer Darragh’s arguments that a breach of contract existed as no agreement was entered into between the two law firms. It held that since Meyer Darragh and Malone Middleman had no contractual arrangement, Meyer Darragh could not employ a breach of contract theory to try to collect the fee Malone Middleman received from settling the contingency fee case. The Court’s decision highlighted the importance of a lack of partnership between the departing attorney and the law firm in its decision as well as the fact that Meyer Darragh did not sue the departing attorney but focused on the successor firm, Malone Middleman. The Court was unanimous in its judgment (although there were concurrences with the majority opinion).