Wisconsin is unique in that it is much more difficult for a client to replace their first personal injury lawyer with a new lawyer. A client always does have the right to fire their lawyer for any reason. However, in a Wisconsin personal injury case, it may be very difficult for a client that has fired his or her first attorney to find a new lawyer to take their case.
In most states, if a client hires Lawyer A but later fires Lawyer A and hires Lawyer B, then Lawyer A gets an hourly rate for the time they spent on the case prior to their firing. Lawyer B is entitled to the amount of the contingent fee minus the amount paid to Lawyer A. IN WISCONSIN, THE OPPOSITE IS TRUE. Lawyer A gets the contingent fee, minus the hourly rate times the amount of time that it would have taken for Lawyer A to bring the case to conclusion. That amount is taken out of the contingent fee and goes to Lawyer B.
Wisconsin law considers Contingent Fee Retainer Agreements to be contracts. Therefore, the principles of contract law apply to such agreements. A preliminary step is analyzing the contract to determine whether it is valid and not unreasonable. A 25%-40% contingent fee amount would likely be held valid; however, a 50% contingent fee could be ruled excessive. If the original contingent fee agreement is determined to be a valid contract, then one of the parites must show the other party “breached” the contract, in order to dissolve the contract. In the context of a Wisconsin personal injury contingent fee retainer agreement, this means that a client must show that the lawyer is being discharged for “fault” or “cause” or the lawyer will be paid the full contingency fee minus an hourly rate paid to the second lawyer to conclude the case, even if that second lawyer had a Contingent Fee Retainer Agreement with the client.
“Cause” for firing an attorney is a high standard. Wisconsin courts have defined “cause” as a “standard that is below that required of attorneys as a matter of law.”
The Wisconsin rule for dealing with situations, where the first lawyer is fired was established in the 1950’s in the case of Tonn v. Reuter. In 1999, in the case of Action Law, S.C. v. Habush, Habush, Davis, & Rottier, S.C., the Wisconsin Court of Appeals ruled on a case where Habush, the original law firm, sued to collect their fees on a case where they were hired and replaced by a second law firm, Action Law S.C., out of Madison, to conclude the case. Action Law claimed that the Habush firm did very little work on the file and should not be entitled to their full contingent fee, less Action Law’s hourly rate for actual work on the file. Habush’s position was that it made no difference how much time they spent on the client’s case, they were the first attorney on the file, and therefore, they were entitled to the full contingent fee minus the reasonable value of services provided by the second lawyer, Action Law. In two unpublished opinions, the Wisconsin Court of Appeals agreed with Habush. The Court determined that Action Law was only entitled to an hourly fee for the amount of time spent resolving the case, from the time Habush was fired and Action Law took over. Action Law also argued that because Habush had only valued the case at $100,000, and Action Law obtained a final settlement of $240,000, that Habush should not benefit from the work of Action Law in increasing the cases value. The Court of Appeals also rejected this argument ruling in favor of Habush.
What is the practical result of this for Wisconsin personal injury victims? It means they will have a very difficult time finding a second lawyer to take over their case if they have already hired and fired an initial lawyer. Therefore, it is essential that Wisconsin personal injury victims hire the right lawyer from the beginning of their case.