What is your reaction to Rudy Giuliani being sued by his former attorney for 1.3M in unpaid legal fees?
No failing to pay one's lawyers is a Trump-era, er, time-honored tradition among indicted Republican-Xian-Jihadies...
Public Reaction and Opinions
I giggle every time I hear it. There's an old saying: ‘They eat their own wounded’ that comes to mind here. Costello will have to get in line; there are so many people after Rudy that it will be his estate that will be doing most of the settling. Pennies on the dollar at most. My prediction is that Rudy will file for bankruptcy protection most likely before the end of this year. The IRS lien is probably the last straw.
Ha ha!
Should He Be Any Different Than Other Clients?
The only correct answer really. He did it to himself, and given his history, he deserves it. Self-inflicted karma.
Why should he be any different than any other client? If Giuliani was representing a client and that client didn’t pay him, I am positive that Giuliani would sue him for the unpaid fees. If he owes the money, he should pay it. There are public defenders who can be had if Giuliani is broke. No reason for his lawyers not to be paid for their work.
Importance of Payment
There are two people you should never not pay—your medical doctor and your lawyer. Unpaid lawyers will sue end of story.
Personal Experience in Collecting Outstanding Accounts
In my past life, roughly 21–30 years ago, it was my job to collect the firm’s outstanding accounts. So “I’m not surprised.”
Of all the accounts I handled, only two had written retainer agreements, and neither of those specified how fees would be charged.
The firm I worked for had a habit of taking in any business that came through the door without assessing the client’s ability to pay, whether it was litigation files or commercial files. Estimates of costs were often wildly optimistic, and actual bills were way more than the client expected. In one case, the bill exceeded the amount of the client’s net recovery.
Now I never handled a case where there was 1 million owing, but I handled several cases where tens of thousands of dollars were owing. One in particular involved a high-profile client who was the girlfriend to a wealthy man. First, we tried to get our client appointed as his guardian when his health started failing, but she had a history of fraud convictions where the people the rich fellow had appointed were three of the most outstanding businessmen in the city. We lost that one big time.
Second, when the rich man died, we tried to get her a piece of the estate but eventually settled for support of about 12,000 a month. I think our total account was in the range of 70,000.
We got bupkis. The support amount was entirely immune from collection attempts. I like to call these sorts of cases 'involuntary pro bono work'.
One of the issues with law firms is that the decision to take on work is generally up to individual lawyers, not even 'individual partners'. Associates are encouraged to bring in work too. Legal compensation is based partly on ‘hours worked’ but a large chunk is ‘share of client I brought to the firm’. ‘Rainmakers’ have an outsized compensation for their contribution in a lot of cases, and they control work given to junior partners and associates who essentially work on the cases they’re told to work on.
Client Responsibilities and Professional Disciplinary Actions
For example, my firm merged with a boutique firm that seemed to be highly profitable with a high-profile lawyer who literally wrote the book on the area of law he practiced. Although he did legal work, it was impossible to hire him directly—you could only get to one of his associates and they overpromised and underdelivered. His accounts were a mess, and we rarely collected them in full because he would underperform and charge for stuff to clean up his own messes that we couldn’t collect. They eventually parted company when he kept getting his associates into conflicts with our best clients.