by Mark Bassingthwaighte, Esq.
Counsel for Those Considering
Entering into Of Counsel Relationships
Of Counsel is one of those terms that
has multiple meanings. This term has been
used as an honorary designation for retired
partners, as a special designation for firm
attorneys who are neither a partner nor an
associate, and as a way to describe part-
time attorneys who have created an asso-
ciation with a firm. In recent years howev-
er, more attorneys seem to want to use the
term solely as a way to generate additional
business. After all, the public presentation
of close ties with another firm can be an
effective marketing tool that will drive ad-
ditional business to your firm, right? Well
perhaps, but there are risks that come into
play and these risks should not be taken
lightly.
What is an Of Counsel Attorney?
The Of Counsel designation as envi-
sioned by the authors of various ethics
opinions refers to something altogether
different from a traditional attorney with-
in a firm. These opinions generally define
an Of Counsel attorney as an attorney who
is not a partner, associate, shareholder, or
member of a firm, and they further state
that an atto rney may only be designated
Of Counsel to the firm if the attorney will
have a close and continuing relationship
with the firm. But any attorney that works
with your firm and has a significant degree
of shared liability with your firm or mana-
gerial responsibilities to your firm and/
or its staff should never be designated as
Of Counsel. 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 re-
quirement of a close and continuing rela-
tionship will apply there as well.
The requirement of a close and continu-
ing relationship has been defined as pro-
viding for close, ongoing, regular, and fre-
quent contact for the purpose of consulta-
tion and advice. Further, the Of Counsel
attorney must be more than an advisor on
only one case or just a forwarder or receiv-
er of legal business. Attorneys can get into
serious disciplinary trouble by designating
someone who is merely a referral attorney
as Of Counsel because that is usually con-
sidered to be a misleading client communi-
cation in violation of the ethical rules. This
is why the idea of creating Of Counsel re-
lationships solely for marketing purposes
falls flat.
www.vtbar.org
Who Can Properly Be
Designated Of Counsel?
Evaluating the appropriateness of the
designation in the light of what a disciplin-
ary committee could perceive as mislead-
ing can help one avoid some of the com-
mon Of Counsel designation pitfalls. Re-
member the average person will take the
term at face value so come at the deci-
sion from the perspective of the average
person’s expectations. If you are thinking
about being listed on another firm’s letter-
head as Of Counsel, only do so if you are
able to be readily available and actually will
provide counsel to that firm.
Examples of acceptable relationships for
the Of Counsel designation have included,
but are not limited to: 1) retired lawyers, 2)
withdrawing partner or associate, 3) part-
time practitioner, 4) permanent non-part-
ner/non-associate, 5) partner on leave,
and 6) probationary partner-to-be. Exam-
ples of unacceptable relationships for the
Of Counsel designation have included, but
are not limited to: 1) outside consultants,
2) suspended lawyers, 3) when the affilia-
tion involves only a single case, 4) those
who merely share office space and nothing
more, and 5) public officials who are not
engaged in active practice with their for-
mer firm.
Can a law firm be Of Counsel to anoth-
er firm? Can an attorney be of counsel to
more than one firm? Can an attorney be Of
Counsel to an out-of-state firm? While the
answers to these questions can be yes, the
reality is that the answers to these ques-
tions and a number of others will differ de-
pending upon the jurisdiction in which you
practice. Given the numerous and varying
state specific rules regarding this designa-
tion, I would recommend that prior to es-
tablishing any Of Counsel relationship you
review any relevant ethics opinions and/or
contact bar counsel in your jurisdiction.
What Are the Risks?
There are a few generally applicable is-
sues that take on special significance in an
Of Counsel affiliation. In particular, imput-
ed disqualification, vicarious liability, and
insurance coverage disputes warrant spe-
cial attention.
Imputed Disqualification - For conflict
purposes, the Of Counsel affiliation means
that the affiliated firm and the Of Counsel
attorney will often be treated as one enti-
THE VERMONT BAR JOURNAL • WINTER 2016-17
ty. 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. Like-
wise, the Of Counsel attorney has to be
concerned about apparent or actual con-
flicts between his own clients and those of
the affiliated firm. The imputed disqualifi-
cation rule is a two-way street and there is
little that can be done to correct the prob-
lem 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 re-
lationships so that everyone understands
what the additional burden will be and can
agree that the benefits outweigh the costs.
Vicarious Liability - While the affiliat-
ed firm is not going to be liable for the in-
dependent acts and omissions of the Of
Counsel attorney that were outside of the
apparent scope of the Of Counsel’s involve-
ment with the affiliated firm, this doesn’t
prevent claims from arising. Problems can
and will arise based upon any given client’s
perspective of the affiliation. Unrestrictive
use of letterhead listing the Of Counsel at-
torney by the affiliated firm or by the Of
Counsel attorney sends the message that
all participants are involved on any and all
matters of the firm and/or the Of Counsel
attorney, even if this isn’t the case. To help
avoid becoming a named co-defendant in
each other’s suits, create two versions of
letterhead. One will list the Of Counsel at-
torney and the other will not. Then only use
letterhead showing the Of Counsel attor-
ney’s name when that attorney is actually
working on a firm matter. Likewise, make
sure that the Of Counsel attorney abides
by the same rule.
Insurance Coverage Disputes - In the
unfortunate event of a claim, coverage
problems can arise when an affiliated firm
has done work on a matter that the Of
Counsel attorney had no involvement in
or awareness of, but was unfortunately list-
ed as Of Counsel on the letterhead that
was in use. Should this Of Counsel attor-
ney not have coverage under the affiliated
firm’s malpractice policy, there may be a
significant problem because the Of Coun-
sel attorney’s own policy will often not af-
ford coverage either. Why is this? The Of
Counsel attorney’s own policy will only
cover work done on behalf of clients of the
named insured which is the Of Counsel’s
own firm. In this situation the Of Counsel
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