The plaintiff law firm, Srebrolow Lebowitz Spadafora PC (SLS), brought a motion for summary judgment against its former associate, Paul Wilkins, and his new firm, PW Lawyers Professional Corporation, regarding unpaid fees from client files transferred upon Wilkins' departure.
The dispute centered on whether certain referral fees paid by Wilkins to a third-party lawyer and a paralegal (who was an SLS employee at the time of referral) could reduce the net fees owed to SLS under their separation agreement.
The court found that the referral fee paid to the third-party lawyer was reasonable, but the fee paid to the paralegal was compensation, not a true referral fee, and thus not deductible.
The court also found PW Lawyers Professional Corporation liable by way of constructive trust for the funds owed to SLS.