Eastern Regional Risk Manager
rmartin@alpsnet.com
In this era of increasing specialization, some lawyers have fallen back upon an arrangement with other lawyers that has been around for quite some time: namely, becoming, "Of Counsel." The term can mean almost anything, and has been the subject of much discussion. If you are thinking about becoming, Of Counsel or if you intend to invite someone to become Of Counsel to you, there are a few things you need to watch.
Whether an attorney will be physically joining, your firm as Of Counsel or will remain in or move to a separate location, the issues are as follows. First of all, make sure that they have malpractice insurance of at least similar coverage to your own. It is a fairly safe bet that without taking this precaution. You could end up as a defendant in a malpractice action where you least expect it. If one of his/her separate clients with whom you (and your firm) had no contact (and who was truly a client of the Of Counsel attorney and not a client of your) sues that attorney but cannot recover a sufficient amount from that attorney, rest assured that efforts will be made to bring, your law firm into the fray on the theory that you and the Of Counsel attorney are really a "firm."
Secondly, assure yourself through appropriate due diligence that the Of Counsel attorney has an excellent reputation just as you would do if they were becoming, your partner/shareholder or associate. From a public perception standpoint (even if not from a strictly legal standpoint) they will be seen as part of your operation.
Thirdly, to the extent that they will be doing, legal work separate and apart from that which they will be done, with/for you, it is imperative to establish an appropriate conflicts checking system as well as a mechanism to insure that client confidential information is protected. Like almost every other area of the law, especially ethics/law office practice management and most particularly conflicts, the answers are not always clear and sometimes the case law itself ironically seems in "conflict." For example, the California Supreme Court in a recent decision where they said they were following the prevailing,- viewpoint, held that the designation of an attorney as Of Counsel to a firm "does justify a presumption that client confidences will be disclosed and exchanged in informal consultations. Hence, the conflict of interest of one will be imputed to the other, with the consequences that disqualification must follow." People
ex rel. Department of Corporations v. Speedee Oil Change Systems, Inc., 980 P.2d 371 (Calif. 1999).However, the Rhode Island Supreme Court Ethics Advisory Panel in Op. 99-09, 5/13/99 took a slightly different tack as reported in the ABA/BNA Lawyers Manual on Professionall Conduct, 8/4/99 at 366. In that opinion, it is stated that where the Of Counsel attorneys maintain separate offices in different cities, have separate practices, and have no access to each other's file, there would be no imputation of conflicts between the attorneys. The opinion goes on to say that such determinations are really based upon a fact specific, case by case determination of every situation to determine whether a "firm" [de facto] exists pursuant to Rule 1. 10. Even where, as in that case, a "firm" is not found and imputation therefore will not be deemed to be in place, the opinion cautioned that the involved attorneys must still consider "pursuant to Rule 1.7(b)" whether his or her affiliation would cause a conflict or the appearance of a conflict.
These two cases tell us very clearly that the factual scenarios and the arrangements between the firm and the Of Counsel attorney will be very important if a problem involving conflicts, client confidences or similar type issue arises. Both for purposes of clarifying and protecting clients' interests as well as protecting yourself and the firm, it is always best to have Of Counsel arrangements clearly stated in writing. The problem may involve a dispute with a client, an allegation of a conflict or even an acrimonious falling out between your firm and the Of Counsel attorney. A written -Of Counsel agreement clearly delineating responsibilities for various tasks and the safeguarding of client property/ files both during the relationship and upon termination will be crucial to helping achieve a satisfactory solution to any problem.
The Of Counsel arrangement can be a very useful and effective practice vehicle. However, it should not be entered into without at least as much consideration as you would give if you were hiring that person as your associate and/or becoming his/her partner/co-shareholder.