There seems to be more confusion than there should be over causes of action against lawyers for breach of fiduciary duty. A recent complaint (Download irell0409.pdf) by Charter Communications against Irell & Manella exemplifies the tendency of malpractice plaintiffs to plead breach of fiduciary duty claims as well, based on much the same conduct and claiming the same damages.
A recent opinion requiring the Wilson, Elser firm to disgorge over over $3 million in fees (see story here) pointed me to a very fine article on the subject by Chuck Wolfram. I largely agree with what I see as his conclusion--that courts should not recognize as independent causes of action breach of fiduciary duty claims that do no more than re-hash malpractice claims, seeking the same relief based on the same facts--though I think of it in a slightly different way. (NY and Illinois courts follow this approach; California does not, so far as I know).
I don't think the argument needs to be more complicated than this:
1. Fiduciary duties are duties that only fiduciaries owe
(a) Duties that non-fiduciaries owe but which fiduciaries owe as well are not "fiduciary" duties
2. Many people (perhaps most) owe duties to act carefully in doing different things
3. The duty of care is not a "fiduciary duty," though fiduciaries must act carefully
From this it follows that carelessness and incompetence are not fiduciary breaches, though fiduciaries may act carelessly and be held liable for doing so. The true "fiduciary" duty is the duty of loyalty. (On this point I may differ with Professor Wolfram, who, in the colloquy printed following his article, characterized carelessness as a form of "betrayal." I think that usage is too broad; it equates carelessness with self-interested profiteering, thus making it impossible to draw what I see as an important distinction.)
From this it follows (as it does for Wolfram) that the breach of fiduciary duty cause of action should lie for disloyal acts, such as profiting from client information, self-dealing with clients, taking client business opportunities, etc.
The remedies for disloyalty should be disgorgement of profits, including fees, earned from disloyal acts. There should be no need for showing causation of damages to clients, as there is in the negligence context, because the purpose of the claim is to remove the incentive for disloyal conduct by confiscating the profits of that conduct, not to restore the client to their position ex ante by compensating their losses. For that relief, standard negligence elements should have to be shown.
This analysis implies that clients should not have to show damage as an element of a fiduciary duty claim; profit (including fees) to the lawyer should be enough to support a disgorgement remedy. That is the general rule, I believe, but the odd facts of Frye v. Tenderloin Housing Clinic prompted the CA Supreme Court to reject a disgorgement claim where the fees at issue were paid by defendants in the underling suit rather than the plaintiff, who was the client of the public interest firm that brought the case.
Slovensky v. Friedman, 142 Cal. App. 4th 1518 (2006) extended Frye to a situation in which a client received some recovery on a time-barred claim but sued her counsel for allegedly lying to her and pressuring her to settle. The court seemed to reason that she had no claim to begin with so her counsel's alleged misconduct did her no harm and, therefore, was not actionable. The no-harm premise disposes of the malpractice claim but should not dispose of the fiduciary claim: disgorgement is appropriate to reduce the incentive to (allegedly) lie to and browbeat clients into fee-generating settlements, even if the client would have been worse off had her claim been subjected to stand-alone scrutiny rather than folded into a package settlement (which it was).
Limited strictly to those facts, the opinion is not too worrisome, but it would be better if courts distinguished violations unrelated to disloyalty from disloyalty, and noted that the purpose of damage claims differs from the purpose of disgorgement.
DM