Tell me what you'd do in this hypothetical.
In June 2010, a new client (from Hong Kong) contacts you and wants you to do some work for them. They're being acquired. Or sued. Or thinking about litigating. Whatever. Something fairly big, and that will surely involve a lot of attorney's fees. They propose to give you a $500,000 retainer against your anticipated fees, which you can draw down upon monthly as you send your bills. Sounds good to you. You sign them up.
So on July 1, 2010, the client sends you a check for $500,000, and you deposit it in your trust account. Ca-ching! On July 8th, you confirm with your bank that the check has cleared. On July 10th, the client tells you that the merger may be in danger, or they may be rethinking their decision to sue, that the anticipated legal problem may be clearing up on its own, etc. Again, whatever. On July 12th, they tell you, yep, the problem's been solved without you. Thanks for your work, but we don't have need for your services any longer. You're of course free to bill us for whatever work you've performed over the past several weeks -- though please don't make this figure too big -- and deduct it from the retainer. But we need what's left of the $500,000 back.
Seems fair, right? Especially since they're willing to pay your accrued fees, for which you can show absolutely no actual written work product. So an easy ten or twenty grand for talking on the phone, sending some e-mails, and maybe doing some research.
Predictably, the client wants the remaining amount in the trust account back quickly, because they'll need it for other things, so they ask you to wire the funds immediately. After all, you've been fired, and it's their money.
You nonetheless diddle around for a while, getting your bill together, doing other work, etc. On July 19th, the client sends you another e-mail. It's been a week. Where's our money? We need it.
So you check with the bank on July 20th. Yep, the $500,000 is still in your trust account. The client wants the money now. Do you wire them the remaining $480,000?
Presumably your answer is "Yes". Indeed, you might legitimately fear being sued if you delayed even longer, since we're talking about a fair piece of change (and imputed interest) that you have no reason to hold onto any longer.
So do you wire the client the $480,000? Or hold onto it even longer after you've indisputably been fired?
That's the hypothetical I came up with after I read this case. Which is not an attorney trust fund case, but nonetheless got me thinking about how the facts therein might be effectively employed even against careful, non-greedy people. Including lawyers trying to do the totally right thing.
Sure, my scheme requires a little more work than sending mass unsolicited e-mails about an allegedly deceased relative and looking for your "help". But not that much more.
And I bet I'd get more than one attorney to send me the $480,000. Several more. Indeed, perhaps even some readers of the California Appellate Report.
Maybe I should look into accommodations in Nigeria.
