As you might imagine, the Court of Appeal and Ninth Circuit haven't been cranking out massive numbers of opinions during and immediately after the holidays. And those that have been issued, quite frankly, haven't been all that interesting. Apart from those I've already discussed, of course. Those were fascinating. By definition.
Today's opinions continued the trend of "slim and boring" holiday missives, so I thought I'd comment on this opinion, which as rendered over the holidays. Which is worthy of comment if only because it (1) involves an issue that's important to lots of attorneys, (2) is marginally intellectually interesting, and (3) made me feel a little bad about the "gift" that Justice Vogel decided to give to attorney Steven R. Yee exactly two days before Christmas: an adverse judgment of over $130,000. Ouch. Note to Chuck: Next time, just wait a week, until after the holidays are over. No one likes to be spanked for $130,000+ right before the holidays. Sort of ruins the mood.
Anyway, the long and short of the opinion is this. Yee joins Anderson, McPharlin & Connors as a partner in 2001. Apparently, Yee's not too psyched about the practice there, since he leaves the partnership in a year. Or maybe Yee's just not a guy into committment, since he promptly joins Wolfe & Wyman -- warning: skip the intro on their home page, lest you subject yourself to an assault of musical techno-legal funk -- which he then also leaves after (you guessed it) a year, this time to start his own firm.
The problem -- for Yee -- is that the partnership agreement that he signed with AMC says that if he takes any open cases with him after he leaves AMC, he's required to pay the firm 25% of any billings that he receives on those cases during the next 24 months. And since that turns out to be over $500,000, Yee owes AMC over $130,000. Which Yee doesn't feel like paying, so AMC sues him. Yee, however, claims this is prohibited fee-splitting under California Rule of Professional Conduct 2-100(A), since he's no longer a partner at AMC and since the relevant clients haven't consented to the split (and, after all, why should they?).
But Yee loses in the trial court. And Justice Vogel affirms. Justice Vogel's reasoning is a bit superficial, but he reaches the right result. Rule 2-100 doesn't prohibit entry into contractual arrangements like these between existing partners to a law firm. Which means, by the way, that if you run your own law firm, and are even a bit worried about departing partners, they're not such a bad thing to have in your partnership agreement. Free money in return for the cases they take. Think about it.
So that's Yee's Christmas 2005. A hit for $130,000. Memorable, at least. And a little bit of publicity too. Not the good kind, mind you; indeed, a stark contrast to the December 2002 issue of the California Lawyer, which prominently displayed Yee on the cover. Instead, the Court of Appeal is rejecting Yee's interpretation of Rule 2-100. Not an awesome endorsement of Yee, whose speciality is apparently legal malpractice and legal ethics issues.
Sorry, Steve. Signing the partnership agreement and reading the rule wrong cost you $130K. On the upside, I'm sure Christmas 2006 will be better than Christmas 2005. Happy holidays!
