Executive Summary
Of-counsel relationships have many advantages. But they can lead to unintended liability and ethical problems. These can largely be avoided by: (a) carefully defining the of-counsel arrangement, (b) monitoring the of-counsel lawyer, and (c) communicating what the relationship means for clients.
Make it a Win-Win Proposition
Of-counsel relationships are common, and they can take different forms. This flexibility can be a good thing. But the situation can turn sour without clear expectations and regular communication.
When structured properly, everyone wins. The of-counsel lawyer gets to enjoy autonomy, but also has the support and social environment of a firm. The firm adds valuable experience and expertise to their roster.
But when done carelessly, an of-counsel arrangement can cause headaches – or worse. An of-counsel lawyer is likely covered by your firm’s professional liability policy. But it’s wise to head off claims by taking proactive steps.
An essential starting point is to do some basic research. Know your state’s ethics rules (if any) regarding of-counsel arrangements. Talk with other firms that use of-counsel lawyers. What works and doesn’t work?
Alta Pro Practice Pointers
- Define the relationship. If you don’t take the time to learn what being of-counsel means, how will your clients figure it out? Sometimes – for example, when a partner becomes of-counsel – the parameters are clear: the former partner will continue to be involved in representing clients and continue to have access to the firm’s resources and procedures. But what about when an outside lawyer comes in? Or when an of-counsel lawyer is essentially renting an office in the firm? That’s when clarity counts.
- Have an agreement. Lay out the nature and conditions of the of-counsel relationship. List the respective responsibilities of the firm and the of-counsel lawyer. Set boundaries. Include any side agreements as to case handling or compensation. What about access to firm resources, IT and staff? If an of-counsel attorney will be privy to client information, then perform conflict checks on all open cases before sharing any systems.
- Monitor performance: Activities of the of-counsel lawyer should be supervised in a meaningful and consistent way. You are inviting a malpractice claim if you allow an of-counsel lawyer to practice with little to no supervision while enjoying all the benefits of being a member of the firm. The greater the autonomy – for instance, when an of-counsel lawyer is essentially just renting office space with little or no coordination with the firm and its employees – the less need for supervision. But clients should understand this. They should be told that the of-counsel lawyer is not a part of the firm. They should understand who is responsible for their case. The client’s interests must come first.
- Communicate with clients. Clients have no idea what of-counsel means, so tell them. Explain the responsibilities of the firm and of-counsel lawyers. Tell clients how all of this will impact their case. Specify who will be in charge of their file. Put this information in your standard fee agreements and client engagement forms.
- Communicate with your employees. Some people inside your firm may not be crystal-clear on the of-counsel relationship either. Explain it to them.
- Communicate with the of-counsel lawyer. Touch base regularly. Know about their caseload, work habits and practice focus. Malpractice claims occur when of-counsel lawyers branch out into a new area, or when personal issues affect the quality of their work. These red flags can go unnoticed without consistent communication.
The Bottom Line: Do your homework to find the best of-counsel structure for your firm. Put the arrangement in writing, monitor work performance and keep talking.
What’s Next
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Heads up!
This information is intended for informative purposes for members of Alta Pro Lawyers Risk Purchasing Group. It is not intended as legal advice. Lawyers should always refer to local and state rules and statutes for applicable standards and rules. These guidelines are designed to help lawyers avoid professional liability claims and are not intended for any other purpose. No legal or fiduciary relationship is intended to be created by receipt of this material.
