Line in the Sand – Establishing Boundaries in the “Of Counsel” Relationship
Erin McCartney, Esq.
March 27, 2023
Reading time: 4 minutes
As a young associate, when I heard the “Of Counsel” title, I associated it with a senior attorney who had one foot out the door. However, along with law firm culture, the “Of Counsel” designation has evolved and is now used in many different contexts. For a solo attorney, becoming “Of Counsel” to another firm offers the opportunity to gain valuable experience while earning a consistent paycheck and benefits. From a small firm’s perspective, designating an attorney “Of Counsel” provides the benefit of gaining an expert in an area of law in which the firm may not be well-versed. Young lawyers with children looking to scale back hours to accommodate a better work-life balance are finding the position of “Of Counsel” particularly appealing. It allows them to remain an asset to the firm without necessarily committing to billing 2500 hours per year. It also gives both the firm and the attorney the opportunity to see whether the relationship is a good fit.
Although the “Of Counsel” designation has many benefits, this relationship also has its challenges. Misperceptions with understanding what constitutes the “Of Counsel” designation, along with how to ethically separate the relationship from the firm’s independent representation can be complicated. Ethics rules, malpractice coverage and client perception all need to be considered.
The term “Of Counsel” is defined by the ABA as a “close, regular, personal relationship” between the “Of Counsel” attorney and the firm. Examples of acceptable relationships for the “Of Counsel” designation have included, but are not limited to: retired lawyers, withdrawing partner or associate, part-time practitioner, and partner on leave. The continuing relationship requisite requires ongoing, regular, and frequent contact for the purpose of consultation and advice. This means that the “Of Counsel” attorney must be more than an advisor on just one case and not simply a forwarder or receiver of legal business. So, an affiliation that amounts to merely a referral relationship, or sharing office space would most likely not merit “Of Counsel” designation.
In the event of a malpractice claim, using the “Of Counsel” title incorrectly can trigger coverage issues for attorneys. Clearly, the affiliated firm should not be liable for the acts and omissions of the “Of Counsel” attorney that were outside of the scope of their involvement with the affiliated firm. However, coverage issues can arise based upon a client’s perspective of the affiliation. A common scenario involves the “Of Counsel” lawyer providing independent legal services but using the affiliated firm’s letterhead or misleading clients into thinking that the lawyer has the backing of the firm on their legal matter. Despite the affiliated firm having no involvement in or awareness of the matter, it may be named as a co-defendant in a malpractice suit because the client reasonably believed the firm was representing them as well. This same situation can occur when the firm uses letterhead with the “Of Counsel” attorney’s name when the “Of Counsel” attorney was not involved in a matter. Should this “Of Counsel” attorney not have coverage under the affiliated firm’s malpractice policy, there may be a significant problem. This is because the “Of Counsel” attorney’s own policy will often not afford coverage either since the policy is meant to cover work done on behalf of clients of the “Of Counsel’s” own firm. To avoid any complications with the malpractice coverage, or with the local bar’s ethics committee, do your best to avoid any potential misrepresentations when utilizing the designation.
Client Perception Matters
When a malpractice claim is alleged, courts will view the matter through the lens of a reasonable client. Therefore, client perspective is an important factor to consider when using the “Of Counsel” title. For instance, unrestrictive use of letterhead listing the “Of Counsel” attorney by the affiliated firm would lead a reasonable person to assume that all parties listed are involved on any and all matters of the firm. Therefore, if the “Of Counsel” lawyer is providing legal services independently, and not in connection with the firm, they should use their own stationary. The name listed on the letterhead should also match the name listed in their policy as the named insured. Consequently, two versions of letterhead should be created with one listing the “Of Counsel” language and the other not. The letterhead showing the “Of Counsel” language should only be used when that attorney is actually working on a matter with the affiliated firm. Likewise, make sure that the affiliated firm abides by the same rule.
With or without the use of the “Of Counsel” designation, if an attorney is sharing office space with another firm, the relationship between the suitemates should also be well-defined. If it is not clear that the offices are operating independently, the firm could be putting itself at risk for a malpractice claim based on client perception. It could also be putting its own insurance coverage in question.
Although the “Of Counsel” designation can offer lawyers and firms many benefits, it is important to understand how the relationship is defined by the ethics rules. Keep in mind that to be “Of Counsel” to another lawyer or law firm, the requirement is maintaining a continuing professional relationship with that firm other than as a partner or an associate. So, referring cases and sharing office space will most often not fit the designation. Be clear about professional partnerships so that clients have no misconception about the relationship. Metaphorically, instead of drawing a line with sand, I recommend using a permanent marker.
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