The Louisiana Supreme Court issued an important opinion this week in In re MMA Law Firm, PLLC, answering certified questions from a federal court about whether and when attorney misconduct can wipe out a lawyer’s right to collect fees and costs under a contingent-fee contract. The short answer: if the misconduct caused the contract to be formed in the first place, the contract is absolutely null and the lawyer walks away with nothing. If the misconduct came later, during the representation, the court applies a more flexible allocation framework.
Louisiana lawyers who handle contingent-fee matters — particularly in high-volume disaster and mass-tort practices — should read this one carefully.
Background
MMA was a Houston-based firm that signed up thousands of Louisiana storm-damage clients in the wake of Hurricane Ida. Things quickly unraveled. The Louisiana Supreme Court suspended MMA’s lead Louisiana attorney, and courts across the state stayed MMA’s cases. A special trustee was appointed to notify former MMA clients that the firm could no longer represent them. MMA eventually filed for bankruptcy and then sought to recover fees and costs from the successor firms — including Morris Bart, LLC — that had stepped in and resolved the clients’ cases.
Morris Bart’s defense is that MMA’s alleged misconduct rendered its contingent-fee contracts absolutely null. The federal district court certified five questions of Louisiana law to the Louisiana Supreme Court, which answered them in this opinion.
One important note: the Louisiana Supreme Court made no factual findings about whether MMA actually committed the alleged misconduct. The questions were answered on assumed facts. The federal court still has to determine what happened.
What the Court Held
1. Successor firms can raise absolute nullity as a defense. Louisiana Civil Code article 2030 allows absolute nullity to be invoked by any person — including a juridical person like a law firm. A successor firm sued for fees by a predecessor can assert that the predecessor’s contract was absolutely null due to misconduct.
2. A contingent-fee contract procured through unethical or illegal conduct is absolutely null. Under Civil Code articles 7 and 2030, a contract that violates a rule of public order is absolutely null. The court treated the Louisiana Rules of Professional Conduct — including the prohibitions on paid solicitation (Rule 7.4), fee sharing with nonlawyers (Rule 5.4), and unauthorized practice of law — as public-order rules. If the misconduct caused the client to enter the contract, the contract never legally existed. And under Civil Code article 2033, a party who knowingly entered an illicit arrangement cannot recover under quantum meruit or unjust enrichment either.
3. The timing of the misconduct. There is a critical distinction between misconduct in formation and misconduct in performance. If the lawyer crossed an ethical line to get the client in the door, the contract is void from the start. If the lawyer formed a valid contract and then engaged in misconduct during the representation, the contract is not automatically void — instead, any fee dispute is resolved under the flexible Saucier v. Hayes Dairy Products and O’Rourke v. Cairns framework, which allocates the contingent fee among predecessor and successor counsel based on the Rule 1.5(a) reasonableness factors, and can reduce or eliminate the predecessor’s share based on the nature and gravity of the cause for discharge.
4. Costs follow the same analysis. A lawyer whose contract is absolutely null cannot recover costs either. For lawyers whose misconduct occurred during performance rather than formation, Rules 1.5(a) and 1.8(e) inform whether any costs may be recovered.
5. Notice matters for claims against successor counsel. A predecessor attorney does not need to record a contingent-fee contract to assert a claim against successor counsel, but must do so before the disputed funds are disbursed to the successor as the successor’s own property. The court declined to address whether recordation is required to pursue a former client directly, since that issue was not before it.
6. The court declined to answer who decides the O’Rourke reduction in federal court. Because federal law governs the right to a jury trial in federal diversity cases, that question is for the federal court to resolve.
What This Means for Louisiana Lawyers
The opinion reinforces something that should already be obvious: how you acquire a client is has consequences under the Louisiana Rules of Professional Conduct. Under Louisiana Rule 7.4, a lawyer may not charge or collect a fee for employment obtained through prohibited solicitation. The rule has implications well beyond the disciplinary process: it can void the fee contract entirely under Louisiana’s Civil Code.
This matters most for lawyers involved in high-volume client acquisition after disasters. The arrangements that get firms into trouble — paid runners, nonlawyer intermediaries, prohibited fee-sharing structures, out-of-state firms acquiring Louisiana clients without complying with unauthorized-practice rules — can be contract-formation defects that can leave the lawyer with no claim to any fee, even after significant work is done on the case.
The court’s causation language notes that the contract must have been “entered as the result of” the unethical or illegal conduct. In other words, a technical advertising defect or paperwork irregularity that did not actually cause the client to hire the lawyer is a different situation from a paid runner who delivered the client directly.
For successor counsel, the practical takeaway is two-fold. First, do not ignore a colorable predecessor fee claim — Rule 1.15(d)’s third-party claims regime applies to disputed funds in your trust account. Second, if you believe a predecessor’s contract is void due to formation misconduct, be prepared to actually prove the causal connection in the federal court that still has to decide this case on the facts. Bad press and prior sanctions are not the same thing as proof.
The Louisiana Supreme Court got this issue right. A fee contract procured through paid solicitation, prohibited fee-sharing, or unauthorized practice should not be enforceable, and quantum meruit should not be available as a workaround for a lawyer who knew what he was doing. The opinion is consistent with how Louisiana has always treated solicitation (as a serious violation) and with the longstanding principle that the Louisiana Rules of Professional Conduct carry the force of substantive law.
