MIAMI – Another law firm has reportedly dropped a lawsuit against Lil Wayne, after taking the New Orleans rapper to court for allegedly refusing to pay legal fees.
Attorneys at Garbett, Allen & Roza (GAR) in Miami had filed a suit against the rapper, after defending him in a case last year in which a private jet company took him to court for non-payment of his fees.
The rapper borrowed money against his $1.5 million skate park in Miami to settle up with the private jet company after authorities seized some of his multi-million dollar art collection; however, the legal team representing him in the 2014 case raised a failure-to-pay lawsuit of its own.
He had the GAR team on retainer, but he still allegedly owed the firm $80,682.45 after $12,000 from his account was applied to the bill. After the firm filed its suit, Wayne was given until June 24 of this year to pay up.
After a bit of quiet, GAR's suit against Wayne was reportedly dropped last month. That suggests that he paid some or all of the $322,000 the firm was seeking after adding penalties for not paying his legal fees.
That's two times in well under a year that the rapper was sued for failing to pay his legal fees. He was sued late last year for allegedly failing to pay, or keep up payments, to another law firm that represented him in a dispute with his label, after his album The Carter IV was delayed.
Non-payment of fees is more common than a lot of people might suspect, according to James Sammataro, a high-profile entertainment lawyer and managing partner at Stroock & Stroock & Lavan.
It's less common among larger firm with "deep institutional relationships," as they can be a bit more selective about who they represent, Sammataro said.
"Firms that are struggling to generate business are often forced to become a little more permissive in the matters that they take on," Sammataro told the Louisiana Record. "Questionable or unestablished clients, particularly if not frequently monitored, are likely to materialize into non-paying clients."
Most entertainment attorneys that bill by the hour typically favor representing media clients, rather than entertainers because even A-list talent is "notorious" for slow and no payment, according to Sammataro.
"The successful talent-side attorneys are known as the 5 percenters, as they collect 5 percent of their A list talent’s income in exchange for serving as their legal concierge," the entertainment attorney said.
For lawyers who bill clients by the hour, an attorney looking to collect legal fees can sue for breach of attorney-client agreement. But that comes with the risk of being counter sued for legal malpractice, according to Justin Leto, a cofounder of Level Insurance, which offers litigation cost protection.
"In a case where the attorney takes the case on a contingency, if the plaintiff fires the lawyer, the lawyer may be able to retain the file until all costs have been reimbursed," Leto told the Louisiana Record. "The lawyer may have a claim against the final recovery for the time and effort spent prior to the plaintiff firing the lawyer."
Savvy attorneys analyze their client's "financial wherewithal" before agreeing to representation. And they keep their clients informed of anticipated legal costs, Sammataro said.
"Too many malpractice claims, even if unsuccessful, can generate a 'where’s-there’s-smoke-there’s fire' concern," he said. " The most typical practice is to have clients agree to arbitrate fee disputes as part of the initial engagement and use the arbitration process as a means to effectuate settlement."
An emerging contingency plan for law firms, especially small to midsize firms, is lawyer's insurance.
"With litigation cost protection, the lawyer gets reimbursed for all of those costs by the insurance company in the event of a loss at trial," Leto said. "This type of insurance has never been available to lawyers before."