Risk Update

“Of Counsel” Lawyer/Firm Risk — Complex Relationships, Mutual Risk (Conflicts, Liability and Insurance)

Perhaps old hat to some, this presented detail that was new and fascinating to me: “What Lawyers Should Be Thinking About before Entering into an Of Counsel Relationship” —

  • “The ‘of counsel’ designation, as envisioned by the authors of various ethics opinions around the country, refers to something altogether different from a traditional attorney within a firm. These opinions generally define the term ‘of counsel’ as an attorney who is not a partner, associate, shareholder, or member of a firm, and further state that an attorney may only be designated ‘of counsel’ to a firm if the attorney will have a close and continuing relationship with that firm.”
  • “Thus, any attorney who works at a firm and has a significant degree of shared liability with that firm or has any managerial responsibilities to that firm and/or its staff should never be designated as ‘of counsel.’ And be aware that related terms such as ‘special counsel,’ ‘tax counsel,’ ‘senior counsel,’ and the like are understood to have the same meaning as “of counsel” and thus the requirement of a close and continuing relationship will apply here as well.”
  • “The requirement of a close and continuing relationship has been defined as providing for close, ongoing, regular, and frequent contact for the purpose of consultation and advice. Further, the of counsel attorney must be more than an advisor on only one case or just a forwarder or receiver of legal business. Now you know why attorneys sometimes find themselves in ethical hot water after designating an attorney, whose sole role is to act as a referral source, as ‘of counsel’ to a firm. Use of the term in this manner is considered to be a misleading client communication.”
  • “For conflict purposes the of counsel affiliation means that the affiliated firm and the of counsel attorney will often be treated as one entity. This does mean that the conflicts the of counsel attorney brings to the table may prevent the affiliated firm from continuing to represent current or future clients.”
  • “Likewise, the of counsel attorney must be concerned about apparent or actual conflicts between his own clients and those of the affiliated firm. The imputed disqualification rule is a two-way street and there is little that can be done to correct the problem once it has arisen. Conflict checks can be burdensome and the potential cost in lost business if a conflict is ever missed can be substantial. Always address the conflict issue prior to establishing of counsel relationships so that everyone understands what the additional burden will be and can agree that the benefits outweigh the costs.”