## Facts

- A software company owned by Jacqueline Hodges sold certain rights to MedAssets, Inc., with contingent future payments tied to sales thresholds.
- After MedAssets reported the threshold was not met, Hodges retained attorney Kirk Reasonover to sue MedAssets in federal court.
- The attorney-client fee agreement used a blended fee structure and included a clause requiring arbitration of disputes through the American Arbitration Association (AAA).
- In 2009, the parties executed a revised retainer converting the fee to a pure contingency fee; it retained the arbitration clause and included a statement suggesting the clients consult independent counsel due to a disclosed conflict.
- Some claims in the MedAssets litigation were dismissed on summary judgment; Hodges and her company then sued Reasonover and his firm for legal malpractice.
- The defendants moved to dismiss and compel arbitration under the retainer agreement’s arbitration clause.

## Issues

1. Whether attorney-client retainer agreements may include binding arbitration clauses enforceable against clients in later malpractice disputes.
2. What disclosures an attorney must provide for an arbitration clause in a retainer agreement to be valid and enforceable.
3. Whether the arbitration clause here was enforceable given the disclosures made and the attorney’s fiduciary and ethical duties.

## Decision

- The Louisiana Supreme Court held there is no per se prohibition on arbitration clauses in attorney-client retainer agreements.
- The Court affirmed the refusal to compel arbitration because the attorneys did not meet heightened disclosure obligations required by the fiduciary attorney-client relationship.
- The Court remanded the malpractice action for further proceedings in district court.

## Legal Principles

- Louisiana law generally favors enforcement of arbitration agreements, but attorney-client contracts affecting client rights are subject to close scrutiny.
- A retainer arbitration clause may be consistent with professional-conduct rules if it does not limit the lawyer’s substantive malpractice liability, provides a neutral decision maker, and is fair and reasonable to the client.
- Attorneys must fully disclose, in plain language, the arbitration clause’s scope (including the types of disputes covered, such as malpractice) and the legal rights relinquished by agreeing to arbitration.
- Required disclosures include at least the waiver of the right to a jury trial, limits on appellate review, limits on broad discovery, and material cost or fee consequences different from court litigation.
- Boilerplate language or a general suggestion to seek independent counsel does not substitute for a clear explanation sufficient to support informed client consent; prospective limitations on malpractice liability implicate Rule 1.8(h) unless the client is independently represented.

## Conclusion

The court enforced no categorical ban on attorney-client arbitration clauses but held this clause unenforceable because the attorneys failed to provide clear, plain-language disclosures about its coverage and the procedural rights the client would forfeit, so the malpractice case proceeded in court.


Hodges v. Reasonover, 103 So. 3d 1069 (La. 2012)