The decision to enter into an of counsel relationship requires careful consideration by both the of counsel lawyer and the law firm. The arrangement can be beneficial to both sides if both are aware of the insurance coverage implications and associated ethical obligations.

The Of Counsel Relationship

The first step is for both lawyer and law firm to make sure that the designation is an appropriate description of the relationship between the two. The use of the phrase “of counsel,” like in any other communication about a lawyer’s services, cannot be false or misleading. Under comment [3] to Rule 7.5:

A lawyer may be designated “Of Counsel” if the lawyer has a continuing relationship with a lawyer or law firm, other than as a partner or associate.

Advisory opinions have further clarified the appropriate use of the term. As the Board of Commissioners on Grievances & Discipline (predecessor to the Board of Professional Conduct) explained in Advisory Opinion 2008-1:

In summary, the “of counsel” designation describes a link between a lawyer and a law firm. The link is a continuing one arising from a close, regular, and personal relationship. The “of counsel” requisite continuing relationship is other than as a partner or associate or its equivalent and is more than a mere forwarder or receiver of legal business, more than a one-time advisor/consultant relationship, and more than a one-case relationship.

Please see Advisory Opinion 2008-1 for the four principal patterns of ‘Of Counsel” relationships. The relationship is also never appropriate for a lawyer whose registration status is inactive, retired, resigned, disbarred, or suspended.

Insurance Coverage Considerations

Both parties should also understand how their respective liability policies will apply to future claims arising out of the of counsel lawyer’s work. Under the OBLIC policy, coverage depends upon whether the lawyer is listed as a named insured.

A law firm’s OBLIC policy will provide coverage to:

(f) any lawyer listed in the policy acting as “of counsel” to the Named Insured, but only while performing services on behalf of the Named Insured.

The coverage is triggered only after the of counsel lawyer has been added to the policy and applies only to work performed on behalf of the law firm. The firm must report to OBLIC the addition of the lawyer no later than 60 days after the lawyer is associated with the firm. If a claim is made after the of counsel lawyer was removed from the policy, but the act, error, or omission that gave rise to the claim occurred while the of counsel lawyer was listed on the policy and arose out of work performed on behalf of the firm, coverage will still apply subject to all other terms, conditions and exclusions in the policy.

If the of counsel lawyer has his or her own OBLIC policy, that policy will apply to of counsel work that the lawyer does for another firm. The policy provides coverage for:

(a) an act, error, or omission of the Insured or any person for whose acts, errors or omissions the Insured is legally liable, in rendering or failing to render “Professional Services” for others in the Insured’s capacity as a lawyer or Notary Public;

The coverage is not limited to work done by the lawyer for the Named Insured firm, but it is subject to all other terms, conditions, and exclusions in the policy.

Be aware that other insurers may treat of counsel lawyers differently. If either the firm or the lawyer is insured by another carrier, read the applicable policy(ies) carefully to understand how the coverage will apply.

Ethical Considerations

Advisory Opinion 2013-1 allows a lawyer to simultaneously practice in multiple firms.  When a lawyer associates as of counsel to a firm, the Rules of Professional Conduct treat the of counsel lawyer as part of the firm. See, Rule 1.0 at Comment [2]. This can be both an advantage and a disadvantage.

One advantage is that the law firm can divide fees with an of counsel lawyer without risk of running afoul of Rule 1.5(e).  The rule applies only to lawyers who are not in the same firm. In Advisory Opinion 2008-1, it was the Board’s view that “an of counsel lawyer is considered a lawyer in the same firm for purposes of division of fees.”

Another advantage is that lawyers in the firm can generally consult freely with the of counsel lawyer without concern about a breach of client confidentiality. Under Rule 1.6, Comment [5]:

Lawyers in a firm may, in the course of the firm’s practice, disclose to each other information relating to a client of the firm, unless the client has instructed that particular information be confined to specified lawyers.

The one disadvantage of the of counsel lawyer being treated as part of the firm is in the imputation of conflicts of interest. Rule 1.10 will apply to an of counsel lawyer just as it applies for any partner or associate of the firm to which the lawyer serves as of counsel. The of counsel lawyer will be burdened by the conflicts that disqualify the firm from representing clients. Likewise, the firm will be burdened by the conflicts of the of counsel lawyer. When more than one firm shares the same of counsel lawyer, it makes all the firms effectively a single firm for purposes of attribution of disqualifications. See, Advisory Opinion 2008-1; see also, ABA Formal Opinion 90-357.

The parties should also be careful in their communication about the of counsel relationship. As discussed above, the communication cannot be false or misleading. The Board has concluded that including the name of an “of counsel” lawyer in the firm name when the lawyer was never a named partner or shareholder of the firm is false and misleading. See, Advisory Opinion 2008-1. However, the law firm may retain in the firm name the name of a lawyer who becomes of counsel after having been a partner or shareholder. The firm may also include in its letterhead the names of out-of-state lawyers who serve as of counsel if the jurisdictional limitation of the lawyer is included on the letterhead.

Best Practices

When considering an “of counsel” arrangement, both law firm and lawyer should be clear about their goals and expectations for the relationship so both can determine:

1. whether it is in the party’s best interest
2. whether it is truly an “of counsel” relationship
3. exposure to and insurance coverage for potential claims
4. the impact that current or potential conflicts of interests may have on either practice

The only way to truly assess the impact of conflicts is to run conflict checks before entering into the relationship. If the check uncovers a conflict, consider whether a screen may be erected to avoid imputation of the conflicts to the lawyer or the law firm.

Exposure of the law firm to liability for the acts of the of counsel lawyer will depend up on how the relationship is structured and how it is communicated to clients. See, Trimble-Weber v. Weber, 119 Ohio App.3d 402, 695 N.E.2d 344 (11th Dist.1997). Keep this in mind when structuring and advertising the relationship.

Review the terms of any insurance policies issued to either law firm or lawyer so that you know what coverage will apply in the event of a claim. As discussed above, insurance policies may differ in their treatment of lawyers working as of counsel. Communicate with the respective insurers about the of counsel arrangement.

When undertaking representation of a client, both law firm and lawyer should be clear with clients about the nature of the relationship. The communication should be clear enough so that the client understands who represents them and who will have access to confidential information about their legal matter. Consider revising fee agreements to memorialize that communication. At the least, make sure that fee agreements and other communications do not create confusion. Fee agreements should refer to the firm only when the lawyer undertakes representation of the client on behalf of the firm. Likewise, firm letterhead and email should only be used for clients represented on behalf of the firm.

For more information about the of counsel relationship, check out these other resources:

• Ohio Board of Commissioners on Grievances & Discipline Opinion 2014-4 Law Firm in “Of Counsel” Relationship with Another Law Firm
• Ohio Board of Commissioners on Grievances & Discipline Opinion 2008-1
• ABA Standing Committee on Ethics and Professional Responsibility Formal Opinion 90-357

If you have questions about the of counsel relationship, reach out to us. As always, we are here to help.