2002 Prof. Law. Symp. Issues 153 (2002)
Disgorgement of Fees and the Unauthorized Practice of Law

handle is hein.journals/profeslwr10 and id is 159 raw text is: Disgorgement of Fees and the
Unauthorized Practice of Law
Sarah Diane McShea
For many lawyers, the prospect of being compelled to return legal fees to
a client after satisfactorily rendering the legal services the lawyer was retained to
render is ludicrous and outlandish. Not keep the fees for legal services that the
client asked the lawyer to perform and that the lawyer actually performed and
performed well? Not possible, say most lawyers, unless the lawyer has breached
his fiduciary obligations to the client. However, as ethics practitioners are
aware, even lawyers who have represented their clients successfully and without
complaint may suffer dire consequences if the legal services were rendered in a
jurisdiction in which the lawyer was not licensed to practice. It is not sufficient
for a lawyer to render high quality legal services, to he dedicated to the client's
cause or even to prevail in the client's cause. To avoid loss of legal fees, a lawyer
also must be licensed to practice in the jurisdiction where the services were ren-
dered. The Birbrower case, now familiar to nearly all practicing lawyers, was not
an isolated instance of penalizing out-of-state lawyers for representing clients in
a jurisdiction in which the lawyers were not admitted to practice.
Fee disgorgement, or fee forfeiture, for conduct that courts have described
as the unauthorized practice of law, is more than a theoretical possibility. Last
year, in separate cases that continue to reverberate in the ethics field, two state
courts first held that lawyers had violated unauthorized practice of law statutes
and then imposed draconian consequences on the lawyers. One lawyer was
ordered to return a fully earned fee and the other lawyer's application for
retroactive pro hac vice admission was denied.'
In Koscove v. Bolte; the Colorado Court of Appeals held that Bolte, a
Wisconsin lawyer who lived in Colorado and was not actively engaged in the
practice of law anywhere, was not entitled to any legal fees from his client
Koscove, who retained him to investigate and pursue her claims for royalty pay-
ments due under a mineral royalty lease with an oil company.
In November 1994, Koscove retained Bolte and agreed to pay him a per-
centage of the royalties, if they were increased or enhanced.' Bolte investigat-
Private practitioner in New York, New York.
1. See ABA/BNA Lawu.ers' Manual on Professional Conduct, Vol. 17, 112-113; Vol. 17, 416-417.
2. 30 P.3d 784 (Colo. 2001), cert. denied, 122 S.Ct. 1066 (2002),
3. Bolte was sensitive to the unauthorized practice of law issue, for he initially proposed that
Koscove give him an ownership interest in the property so that he could as a part owner... pro.
vide advice and do work that may have legal ramifications %ithout violating law or ethics. Id. at
786. Kocove rejected this, even though Bolte proposed that he be granted a token interest.

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