By now, we are aware that the Matrimonial Rules (22 N.Y.C.R.R. Part 1400) require that attorneys, at the initial conference with a new client, provide, together with a Statement of Rights and Responsibilities, a written retainer agreement which contains certain prescribed elements. The retainer agreement, which must be filed with the court along with the party's statement of net worth, must advise the client, among other things, of the right to arbitrate disputes with the attorney in the event of a fee dispute.
Cases to date make clear that attorneys cannot collect their fee, either from the client or from the client's spouse, unless there is strict compliance with the above-described Rules. Indeed, there is authority that attorneys may even have to return fees already paid. Mueller v. Pacicca, NYLJ, p. 36, col. 4 (City Court, White Plains); McMahon v. Evans, 169 Misc.2d 509, 645 N.Y.S.2d 753 (Sup. Ct.).
The seemingly harsh penalty imposed on non-complying counsel is a result of the incorporation of some of the Rules into the Code of Professional Responsibility. Thus, counsel who has substantially violated the Code of Professional Responsibility may not collect a fee barred by the public policy expressed in that Code. Matter of Cooperman, ...
I previously noted a series of cases and commentaries which concluded that strict compliance with the Matrimonial (22 NYCRR Part 1400) was required before an attorney could collect fees from either the client or the client's spouse. In fact, there was authority that non-complying attorneys might even have to return fees already earned and paid.
Several recent Appellate Division decisions indicate that our appellate courts are not going to insist on strict compliance with the Rules if counsel has earned the fees and has “substantially” complied with the Rules. Furthermore, the First Department in Flanagan v. Flanagan, 267 A.D.2d 80, 692 N.Y.S.2d 733 (A.D.2d Dept., July, 1999) the husband sought a return from his attorney of a $10,000 retainer payment because the retainer agreement signed by him contained a waiver of itemized billing - a clear violation of 22 NCRR 1400.3, which set forth required elements of a retainer agreement and mandates that itemized billing must be rendered at least every 60 days. Noting that counsel claimed to have exhausted most of the retainer payment in performing services, the Court held: Contrary to the [husband's] contention where a retainer agreement fails to comply with the provisions of the matrimonial rules, the court need not return fees properly earned by an attorney.