By Order dated November 25, 2020, the Supreme Court of Pennsylvania amended Rule 1.5 of the Pennsylvania Rules of Professional Conduct, adding a new Comment [5] regarding successor counsel in contingency fee matters.
The new Comment [5] states that in a situation where a client terminates a lawyer hired on a contingent fee basis and retains a new attorney, “successor counsel must notify the client, in writing, that some portion of the fee may be due to or claimed by predecessor counsel for services performed prior to the termination, and should discuss with the client the effect of that claim on successor counsel’s proposed fee agreement.”
The new Comment [5] also states that successor counsel’s participation in negotiation of fees with predecessor counsel on the client’s behalf may result in a conflict of interest, and that successor counsel must advise the client of the conflict and obtain informed consent to the representation as set forth in Rule 1.7. Written consent is not essential under the Pennsylvania rule, but is highly beneficial to both successor counsel and the client.
The new Comment [5] further provides that “if a dispute arises regarding distribution of the recovery, successor counsel must hold the disputed portion of the funds in trust pending resolution, in accordance with Rule 1.15(f).”
This rule change is effective immediately.