Retainership Agreement Goes Sour: Serious Lessons for Lawyers

By Stephen Azubuike



Retainership agreement


A retainership agreement is one of the ways the services of a legal practitioner may be booked by a client for a particular period. By the nature of such agreements, the legal practitioner is expected to give the client legal cover for the specified period with respect to a range of legal services that may be specified. Clients tend to save more money from this arrangement as they are likely to pay more if the legal services were to be billed separately or on a case by case basis.

The advantage to legal practitioners is that they get to receive bulk payment in advance for a period for future instructions. If the client has fewer need (instructions) for the legal practitioner during the period of the retainer, it does not affect the retainership fees already agreed and paid. More so, retainerships tend to strengthen the relationship between a lawyer and his/her client.

Usually, retainership agreement is usually for a period of one year. Standard retainership agreement would contain a renewal clause. Otherwise, it is taken that the retainership is purely for a year and terminates at the end of the year. Failure to include a renewal clause may be fatal as seen in the recent case of Babatunde v. Osun State College of Education [2020] 1 NWLR (Pt. 1705) 344.

Babatunde v. Osun State College of Education


The facts of Babatunde v. Osun State College of Education are straightforward. The Appellant – Mr Dosu Babatunde – a legal practitioner, was offered a retainership by Osun State College of Education (“the Respondent”) in 2009. He had also served as a member of the Governing Council of the School. The offer was by an Offer Letter which the Appellant accepted in writing. No formal retainership agreement was executed. There was no agreement as to the period of the retainer and no agreement on renewal of the same.

The Appellant was paid the agreed retainership fee for 2009. The Appellant did not demand any fee for 2010 and did not ask for a renewal. In 2011, the Appellant wrote the Respondent demanding his retainership fees. The Respondent replied that the retainership ceased since 2010 following the Appellant’s failure to request for a renewal. There was no evidence that the Appellant received any further instructions from the Respondent and no evidence of any work done in 2010 and 2011 or subsequently. Aggrieved, the Appellant sued the Respondent claiming retainership fees from 2010, 2011 and for subsequent years the contract allegedly subsisted. His claims were dismissed by the trial Court for lacking in merit.

His appeal to the Court of Appeal was also dismissed. Mahmoud, JCA held that the retainership agreement terminated in 2009 and that there was no agreement as to renewal. Her Ladyship held that it is in the nature of retainer agreement to be for one year subject to renewal. The Court was persuaded by the fact that the Appellant did not write to ask for payment of any retainer fee in 2010, which was an acknowledgment that the retainer had ceased.

The Court of Appeal reasoned that the contract terminated at the end of the one-year period as there was nothing, either expressly or impliedly, that supports the contention that the retainer contract automatically renews. As rightly pointed out by Mahmoud, JCA, if the Appellant was able to show evidence of instructions given by the Respondent and executed by the Appellant during the period claimed, the Court may be inclined to hold that the contract subsists. Mahmoud, JCA explained (at pp. 361-362):

The situation would have been different if in Exhibit DB3, instead of the Appellant stating: “…With respect to our service as the School Legal Retainer and we thank God we have, to the best of our ability discharged diligently the functions assigned to us ever since”, they pinpointed to what actually they did or the Respondent invited or called them to do between January, 2010 and November, 2011 which would have entitled them to the fees. Then the Respondent would be deemed to have held themselves out as having renewed the retainership agreement. They would not be condoned to state that they assumed that the Appellant had ceased to be their legal retainer since January, 2010.

Lobbying for retainership has been judicially noticed
Mahmoud, JCA expressed the view that it has been judicially recognised that legal practitioners lobby for retainership and for the renewal of same. This was to support the position that perhaps, the Appellant ought to have lobbied for the renewal of his own retainership with the Respondent. According to her Ladyship (at p. 362):

It is a notorious fact which this Court can take judicial notice of that at the end of every year legal practitioners lobby company secretaries of big/notable companies and parastatals to either get appointed as retainers or have their retainership agreements renewed!


This judicial notice is good for the legal business. Industry practice requires that astute legal professionals must deploy decent and strategic ways of “lobbying” for briefs and retainerships in order to stay afloat in the profession. This is part of what the business of law entails. Law firms that master the art flourish, while those who do not are left with “ambulance-chasing” and other dishonourable and unprofessional modes of winning briefs. It is the activities of this latter category that the rules of professional ethics seek to regulate in order to avoid bringing the legal profession into disrepute.

“Attack” on the Appellant


Before ending the Judgment, the Court of Appeal launched a “vicious attack” on the Appellant for pursuing the case thus far. Mahmoud, JCA vibrated (at p. 363):

I cannot end this Judgment without commenting on the attitude of the Appellant, an acclaimed experienced legal practitioner of over two decades experience. I suppose that the experience is a post call one which, if over two decades as at 2009, is now over three decades. It is an embarrassment to say the least for a senior lawyer at that to waste ample judicial time and tax payers’ money from 2011 till to date, a period of eight years for a claim of less than N2,000,000! Even if Counsel is afflicted with the highest degree of penury, what happened to charity? What happened to the NBA Policy on pro bono? What better institution to give pro bono service than an educational one involved in the education of our children? And one from whom the Appellant has enjoyed one year retainership fee for offering no known services. And also one on whose Council he was a member. What happened to social and communal responsibilities?”

With the greatest respect, it is our humble opinion that the lambasting of the Appellant as seen in the above obiter dictum was unnecessary. The Appellant genuinely believed he had a case. He is entitled to enjoy his constitutional right to approach the Court. A claim of N2,000,000 is not so insignificant. More so, the Appellant claimed some declaratory reliefs. No legal practitioner can be forced to render legal services pro bono (free of charge). Lawyers retain the right to decide when and to whom to offer free legal services.

The NBA Policy on pro bono is flexible and not mandatory. Besides, there is no evidence that the Appellant does not render pro bono services. The Respondent is an institution of learning that makes money from school fees, other charges and sources. The fact that it is an institution of learning does not mean it should automatically enjoy free legal services. It was not the Appellant’s fault that the case lingered for eight years. It does not follow that the Appellant wasted tax payers’ money as stated.

Perhaps, the only compelling point was that the Appellant should have brought his experience to bear in seeking amicable resolution or willingly give up the struggle because he had served as Council member which was a position of honour and privilege. But that was his sole prerogative.

We agree that the Appellant’s case deserves to fail on the well espoused principles of Contract Law by the Court of Appeal.

Conclusion


We have seen the need to always have a proper retainership agreement. This is a more professional approach for lawyers. Assuming the Appellant reduced the agreement into a formal retainership contract, the relevant renewal clause would have been captured. This is not to say that the Offer Letter and Acceptance Letter exchanged were not enough to establish a contract.

The only point was that giving the situation, it was difficult for the Court to read into the agreement what was not expressed and not supported by the conduct of the parties. The Court rightly declined the invitation to accept that retainership agreement has automatic renewal clause implied. This is capable of working hardship on a client. The only reasonable time such renewal may be implied is where the client keeps issuing instructions which the lawyer executes in a subsequent year.

Source: www.stephenlegal.ng

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