On December 23, 2009, the New York County Supreme Court denied the motion to dismiss of the law firm defendant, and held that the plaintiff, a former associate at the firm, stated a cause of action for violation of an oral contract to pay the plaintiff one-tenth of the legal fees that the firm collected in any cases which the plaintiff originated.
Adams v. Labaton Sucharow & Rudoff, Index No. 106045/2009 (N.Y. Sup. Ct. N.Y. County Dec. 23, 2010). The defendant is a mid-sized New York City law firm which specializes in representing plaintiffs in class actions. The plaintiff, who was a New Mexico assistant attorney general before joining the firm, alleges that his government connections helped the firm sign up New Mexico as a client in class actions brought by that state, as a result of which the firm earned $118 million in legal fees.
The Adams decision, which is linked below, is grounded on a well-established principle which I have explained in two recent articles: that employees within the State of New York may enforce an oral agreement, made at the beginning of the employment relationship, to pay an annual bonus where such bonus is an integral part of the plaintiff’s compensation package.