Today we journey to the land of Blawgletter's legal schooling — the Commonwealth of Massachusetts. We do so not to visit the question of same-sex marriages, nor the issue of banning class actions in arbitration clauses. We travel thither instead to look at how well law firms do vis-a-vis clients that take bankruptcy without paying.
The Supreme Judicial Court of Massachusetts last week ruled that Ropes & Gray LLP held a valid statutory lien on an insolvent client's patent and could collect on the lien out of proceeds from the sale of the patent. The Bay State statute — General Laws ch. 221, § 50 — granted "the attorney who appears for a client . . . a lien for his reasonable fees and expenses upon his client's . . . claim". It also stated that the lien arose "[f]rom the [attorney's] authorized . . . appearance in any proceeding before any state or federal department".
The Court read the statute:
- to create a lawyer's lien from the moment the "attorney" (Ropes & Gray) appeared before a "federal department" (the U.S. Patent and Trademark Office) to press the client's "claim" (the patent application),
- to fix the lien on the result of pressing the claim (the patent), and
- to apply the lien to the funds resulting from pre-bankruptcy sale of the patent.
Ropes & Gray LLP v. Jalbert, No. SJC-10333 (Mass. July 28, 2009) (answering questions that First Circuit certified in In re Engage, Inc., 544 F.3d 50, 58 (1st Cir.2008)).