U.S. District Judge William Pauley ruled yesterday that New York law does not recognize an expansion of the unfinished business doctrine to include pending hourly fee matters of a bankrupt law firm, the New York Law Journal reported today. Judge Pauley held that the former partners of bankrupt Thelen do not retain a property interest in hourly fee matters that former Thelen lawyers took with them to new firms. "Unlike in the contingency fee context, applying the unfinished business doctrine to pending hourly fee matters would result in an unjust windfall for the Thelen estate, as 'compensating a former partner out of that fee would reduce the compensation of the attorneys performing the work,'" Pauley said, citing the only New York case to consider the issue, Sheresky v. Sheresky Aronson Mayefsky & Sloan, 2011 WL 7574999 (N.Y. Sup. Ct. Sept. 13, 2011). "Such an expansion of the doctrine would violate New York's public policy restrictions on the practice of law," Pauley said as he issued rulings in two related cases, Geron v. Robinson & Cole, 11 Civ. 8967, and Geron v. Seyfarth Shaw, 12 Civ. 1364.
