Q: A defendant hired a lawyer to represent him in a case in which he was being sued for a very large sum of money, agreeing to pay the lawyer one-third of whatever he would manage to reduce from that sum. That lawyer then hired me to assist him with the case and promised to pay me 20% of whatever he would earn on the case.
We were able to reduce the defendant’s payout significantly, and the lawyer was paid his fee in full. He took that money and invested it to flip some real estate, and he made a handsome profit on that investment.
I was quite surprised when he wrote me a check for only twenty percent of the fee he was originally paid, despite having withheld my pay for two months while it was invested in that real estate deal.
Do I have a right to 20% of what the money he earned is worth today, or only to 20% of the original sum?
A: As with any case, we would have to examine the exact details of the deal you made with the lawyer, because even the slightest discrepancy in the terms of the deal can affect the resolution of your case.
First, we must note that the funds that the lawyer was paid for his work belonged to him, in their entirety. Since you never made a kinyan (acquisitional act) or gained control over the money that was owed to you, it did not belong to you. Of course, his pledge to pay you for your work obligates him to remit that payment even if the two of you did not make any kinyanim to formalize the arrangement, but that obligates him only to pay you in general, not to give you a percentage of the specific funds that were remitted to him. Moreover, the Poskim write that when an employer promises to give his employee a certain object as payment, he isn’t required to fulfill that commitment (although it is inappropriate, ethically, to renege); he may pay him the monetary value of the object instead (Rema 332:4 with Shach 18; see Inyan, Dec. 15, 2021/BHI #588).
You have even less of a claim to the money the lawyer was paid than that employee, because those funds were not in the lawyer’s possession when he made the deal with you, and a person cannot transfer something that is not in his possession (ein adam makneh davar shelo ba birshuso). (Shach 122:21 and Ketzos HaChoshen 176:4; see Shu”t Imrei Yosher 1:91).
Therefore, although the lawyer is obligated to pay you the value of 20% of what he was paid, that percentage of the actual money he received is not yours. When he made the investment, then, it was his money he invested, not yours, and he is only obligated to pay you 20% of what he was paid.
Nevertheless, if the understanding was that he was investing for you as well, then you are a partner in the real estate investment and you are entitled to your representative portion of the profit.
Even according to the Poskim who rule that there must be a kinyan for a partnership to take effect (see Choshen Mishpat 176:1&3), and there was no kinyan between you and the lawyer, you are still a partner in this case because of the halachos of shelichus (agency).
If Reuven owes Shimon money, and Shimon tells him to buy merchandise with the money and they would be partners in that venture, and Reuven bought the merchandise based on that instruction, Shimon acquires his portion of the merchandise even though he didn’t buy it with money that belonged to Reuven (ibid. 183:4). Here, too, although the lawyer bought the real estate with his own money, he is still considered your shaliach (agent) to buy a portion of the real estate on your behalf (ibid. 176:7 with Nesivos 13; cf. Ketzos Hachoshen 4).
But if there is no clear, mutual understanding between you and the lawyer that he is investing on your behalf, you have no claim against him even if he delayed paying you.
If, however, there was money that already belonged to a partnership — such as if two partners lent money to someone, and one partner was repaid on behalf of both of them — and he then invested that money, that investment certainly belongs to both partners (Aruch Hashulchan 176:19).
