The hourly fees earned on client matters that attorneys take with them when switching firms are not the "property" or the "unfinished business" of their old partnerships, the New York Court of Appeals ruled yesterday in a closely watched case involving the bankruptcies of Thelen and Coudert Brothers, the American Lawyer reported today. The unanimous court said finding that lawyers owe a continuing obligation to their old partnerships for work they do for clients after moving to new firms "does not comport with our profession's traditions and the commercial realities of the practice of law today." "A law firm does not own a client or an engagement, and is only entitled to be paid for services actually rendered," Judge Susan Phillips Read wrote for the 7-0 court. Attorneys in the two cases and others involving hourly billings in the wake of recent law firm bankruptcies said that the ruling brings clarity to what trustees can seek from former firm attorneys who have moved on to other firms. The court made one ruling in the two cases, (Matter of Thelen) Geron v. Seyfarth Shaw, 136, and Matter of Coudert Brothers, 137. The court's analysis of New York's 1919 Partnership Law and the "unfinished business" doctrine was prompted by certified questions from the U.S. Court of Appeals for the Second Circuit stemming from the Thelen and Coudert bankruptcies. Coudert dissolved in 2005 and Thelen in 2008.
