Supreme Court of Virginia weighs discipline for lawyer accused of prioritizing fees and obstructing settlement disbursement

The Supreme Court of Virginia heard arguments in Wessel v. Virginia State Bar during its April session, focusing on whether attorney Douglas Wessel put his contingency fee ahead of his client's interests by delaying withdrawal and obstructing settlement disbursement.

Appellant counsel Rachel L. Yates told the court the case "is about second guessing a seasoned trial lawyer's professional judgment in a very difficult challenging circumstance," saying Wessel faced a fractured attorney–client relationship, a fee dispute and limited choices once trust broke down. Yates said Wessel continued contemporaneous work—filing motions and preparing witness and exhibit lists—and that he discussed the situation with his client on October 10. She asked the court to reverse the three-judge panel's disciplinary finding.

Erin R. McNeil, representing the Virginia State Bar, urged the court to affirm. McNeil told the justices "Wessel was disciplined for putting his own desire to maximize his contingency fee ahead of his duty to his client," summarizing the bar's findings: breach of contract duties, unreasonable delay in withdrawing under rule 1.16, and inducing obstruction of disbursement that implicated rule 8.4 tied to an underlying 1.15 violation.

Justices pressed both sides on several factual pivots. One justice noted Wessel borrowed roughly $22,000 after he allegedly decided not to try the case and asked whether that borrowing was consistent with diligent trial preparation or evidence he had abandoned trial plans. Counsel disagreed on interpretation: Yates characterized contemporaneous filings as reasonable preparation; McNeil said the record supports a reading that Wessel preserved his fee and used litigation posture to impede timely payment to the client.

The court also debated allocation of contingency-fee costs. McNeil told the bench that, absent a narrow expert-witness justification, expense for hiring additional counsel or experts ordinarily should come out of the attorney's fee share rather than from client funds. The transcript records discussion that the standard contingency rate referred to in the retainer was 38%, with an increase to 40% under certain timing conditions; McNeil said the client ultimately sought a quantum meruit recovery once it became clear the attorney had ceased protecting the client's interests.

Another focal point was an arbitration clause in Wessel's retainer. A justice asked whether that clause justified withholding all funds; McNeil said Wessel sought arbitration of all disbursements, refused to provide a prompt accounting and thereby induced the holder of settlement funds to delay payment to the client even though the settlement was large enough to satisfy competing claims.

Counsel and the bench also discussed the bar's ethics hotline: McNeil acknowledged Wessel called the hotline twice but did not follow advice to withdraw promptly when ethical competence was at issue, which the bar said supports a finding of untimely withdrawal under rule 1.16.

Yates closed by arguing that asking a tribunal to resolve disbursement priorities was a proper step in a fraught situation and, standing alone, should not be treated as professional misconduct. She asked the court to reverse the disciplinary judgment.

The court’s questioning focused on contemporaneous facts—what Wessel knew and did, when he told the client, whether his filings were a legitimate effort to preserve settlement options, and whether his conduct crossed from zealous advocacy into obstruction and breach of fiduciary duties. The justices did not issue a decision at argument; the case remains under advisement.