Ferris, Thompson & Zweig, Ltd. v. Esposito
2017 IL 121297
| Ill. | 2017Background
- Ferris, Thompson & Zweig (plaintiff) and Anthony Esposito (defendant) entered joint-client retainer/referral agreements in 10 workers’ compensation cases where plaintiff referred clients to defendant and would receive 45% of fees.
- Each client signed written attorney-client agreements describing the referral, division of fees, and the firms’ respective duties; all agreements were signed by client, plaintiff, and defendant.
- Defendant settled the underlying matters but refused to pay plaintiff its share; plaintiff sued for breach of contract to recover the unpaid fees.
- Defendant moved to dismiss under 735 ILCS 5/2-615, arguing the written retainer agreements violated Illinois Rules of Professional Conduct (2010) Rule 1.5(e) because they did not expressly state the lawyers assumed joint financial responsibility, rendering the fee-sharing agreements unenforceable.
- The circuit court granted dismissal relying on the First District’s Fohrman decision; the appellate court reversed, holding Rule 1.5(e) does not require express client notice that the attorneys assumed joint financial responsibility.
- The Illinois Supreme Court granted leave, affirmed the appellate court, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 1.5(e) requires written client notice that attorneys have assumed joint financial responsibility when a referral is the primary service | Plaintiff: Rule 1.5(e) does not require express written notice to clients that lawyers assume joint financial responsibility; written consent need only confirm the arrangement and share each lawyer will receive | Defendant: Fee-sharing agreements are invalid unless the client agreement expressly states that the attorneys have assumed joint financial responsibility (per Fohrman) | Court: Rejected defendant; Rule 1.5(e) does not require express client notice of joint financial responsibility; the rule’s subsections are separate conditions and joint responsibility need not be stated in the client’s written consent |
Key Cases Cited
- Kanerva v. Weems, 2014 IL 115811 (procedural standard for Rule 2-615 review)
- Imperial Apparel, Ltd. v. Cosmo’s Designer Direct, Inc., 227 Ill. 2d 381 (standard of de novo review on legal questions)
- People v. Dominguez, 2012 IL 111336 (principles for interpreting Supreme Court rules)
- In re Storment, 203 Ill. 2d 378 (explaining joint financial/legal responsibility among lawyers)
- Ferris, Thompson & Zweig, Ltd. v. Esposito, 2015 IL 117443 (prior related jurisdictional/same-party proceeding)