In 2005, attorneys Ike Spears and William Hall verbally agreed to jointly represent the Port of Orleans on a contingency fee basis for Hurricane Katrina insurance claims. The Port rejected their contingency proposal and offered to retain them on an hourly basis instead. Spears refused the “chicken shit” hourly arrangement (his words). Hall accepted, signed the engagement letter alone, and began working the case. A year later, Hall and Florida attorney Chip Merlin executed a contingency fee contract with the Port and ultimately recovered $117.5 million from its insurers. Hall earned approximately $6 million in fees; Spears performed no work on the case.
In 2010, Spears sued Hall for breach of a joint venture agreement, seeking half of Hall’s contingency fee. After a bench trial in 2023, the district court found a valid joint venture existed, ruled that Hall breached his fiduciary duty by failing to inform Spears of the contingency fee opportunity, and awarded Spears approximately $2.5 million. The Fourth Circuit affirmed, characterizing the dispute as a breach of contract claim and dismissing the Rules of Professional Conduct as a “red herring.”
On March 6, 2026, the Louisiana Supreme Court reversed. Justice McCallum, writing for a unanimous court, held that the joint venture terminated when the Port rejected the contingency fee proposal and Spears refused the hourly arrangement. The court grounded termination in three independent theories: impossibility of the venture’s object under Civil Code article 2826, failure of the parties to unanimously consent to a new or amended agreement under article 2807, and nonfulfillment of a suspensive condition under article 1769. The court further held that the Rules of Professional Conduct apply to all fee-sharing arrangements between lawyers of different firms—regardless of whether the dispute sounds in contract. Because the parties never obtained the Port’s written consent to joint representation and Spears rendered no legal services, their arrangement violated Rules 1.5(e) and 7.2(c)(13). The court expressly overruled all prior cases upholding oral fee-sharing agreements between lawyers of different firms that fail to comply with the Louisiana Rules of Professional Conduct.
In this important decision, the court made clear that a Louisiana lawyer cannot simply refer a case, do no work, and collect a fee at the end. Rule 1.5(e) operates as a substantive bar: absent the client’s written consent to joint representation and meaningful legal services by each lawyer, no fee-sharing arrangement between lawyers of different firms is enforceable. Rule 7.2(c)(13) reinforces this result by flatly prohibiting referral fees. Together, these rules function not merely as disciplinary standards but as public policy limitations on the enforceability of inter-firm fee agreements and joint venture agreements.
Prevailing counsel for Mr. Hall included Dane S. Ciolino, Scott J. Crichton, Dominick Impastato, and Scott Sternberg.
For the courts full slip opinion, see below.
