The Fifth Circuit Court of Appeals recently addressed finder’s fees under Texas law. CB Legal Search, L.L.C. v. Lewis Brisbois Bisgaard and Smith, L.L.P., No. 11-20127 (5th Cir. Sept. 16, 2011), available at http://www.ca5.uscourts.gov/opinions/unpub/11/11-20127.0.wpd.pdf.
In 2006, a legal recruiter introduced LBBS, a law firm, to two partners at BRG, another law firm. The two partners declined LBBS’s employment offers. In 2009, CB Legal Search, a different legal recruiter, helped negotiate the transfer to LBBS of several partners at BRG (including the two partners who contemplated a move in 2006). Ultimately, LBBS decided not to hire the group, but LBBS continued negotiations with the two BRG partners it recruited in 2006. When LBBS announced that it had acquired those two BRG partners and their associates, CB Legal Search sued to recover its finder’s fee. The trial court ruled for the recruiter on the basis of quantum meruit, and LBBS appealed.
The Court determined that the legal recruiter was a “procuring cause” of LBBS’s acquisition of the BRG attorneys. A procuring cause need not be a “but-for” cause of a transaction; a “contributing or concurrent” cause can sustain the award of a finder’s fee. Here, evidence was sufficient to prove that CB Legal Search was a procuring cause of the transaction, and the district court did not commit clear error in awarding the finder’s fee.
To speak with a Dallas lawyer about finder’s fee agreements or other Texas employment law issues, contact the Texas employment lawyers at Clouse Dunn LLP at [email protected].
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KEITH A. CLOUSE
Clouse Dunn LLP
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