I.                   “Of Counsel” Relationships.

A.                Broad Definition: “Of Counsel” describes a “close, regular, personal relationship” between a lawyer and a law firm, “but a relationship which is neither that of a partner (or its equivalent, a principal of a professional corporation), with the shared liability and/or managerial responsibility implied by that term; nor, on the other hand, the status ordinarily conveyed by the term “associate,” which is to say a junior non-partner lawyer, regularly employed by the firm.” ABA Formal Op. 90-357 (May 10, 1990).

B.                 Benefits of an Of Counsel relationship:

1.                  Marketing, for both the lawyer and the law firm.  If the lawyer has a particular expertise in an area, the law firm may hold itself out as being able to provide that expertise to clients.  The lawyer, who may predominately practice on his or her own, benefits from the association with a larger entity and the resources (other lawyers, staffing, expenses, other expertise) that come with a law firm.

2.                  Avoidance of restrictions on fee splitting and referral fees. Because an Of Counsel lawyer is considered part of the law firm, the lawyer and the law firms have no restrictions on sharing fees or compensating each other for case referrals (within a law firm, this is “rainmaking,” not a referral).  Restatement Third, The Law Governing Lawyers § 47, cmt. g.  Of the jurisdictions that have directly considered this rule, six favor it and four disagree.  The dissenting states allow fees to be freely shared only amongst partners, shareholders, and associates of a law firm.  ABA/BNA Lawyers’ Man. on Prof. Conduct, §91:506 (Feb. 28, 2001).

3.                  Provides a framework for lawyers who are neither employees nor contractors, such as:

a)                  Retired lawyers or judges;

b)                 Partners on parental or other leaves of absence;

c)                  Firm lawyers not on partnership track;

d)                 Prospective partners;

e)                  Legislators.

See ABA/BNA Lawyers’ Man. on Prof. Conduct, § 91:504 (Feb. 28, 2001 update).

C.                 Negatives of Of Counsel Relationship

1.                  As member of law firm, all of firm’s conflicts are imputed to lawyer and vice versa. See Restatement Third, The Law Governing Lawyers § 123, cmt. c(ii) (“the incentive to misuse confidential information, the difficulty of determining when it has been misused, the ostensible professional relationship, as well as the administrative ease of a definite rule, justify extending imputation to lawyers having an “of-counsel” status).

a)                  Some Of Counsel relationships are more tenuous than others; the imputation of conflicts may not be universal. See Jenson v. Touche Ross & Co., 335 N.W.2d 720 (Minn.1983) (refusing to disqualify law firm based on imputed conflict of lawyer who had recently worked for opposing law firm, had very slight exposure to facts of case, had just joined new law firm in of counsel capacity, and where firm erected screen).

2.                  Misuse of “Of Counsel” designation, such as by someone who merely forwards or receives business, may be construed as misleading and violate Rule 7.1. See ABA Op. 90-357. See also Illinois Ethics Op. 776 (1982) (fee sharing rules may not be avoided merely by using label of “of counsel.”

3.                  Law firm may be liable for wrongful acts and omissions of Of Counsel lawyers. Restatement § 58, cmt. c.  Liability will likely turn on the facts of each individual case; some courts have declined to hold a law firm vicariously liable for an Of Counsel lawyer acting on her or her own. See Homa v. Friendly Mobile Manor, Inc., 612 A.2d 322 (Md. Ct. Spec. App. 1992); Trimble-Weber v. Weber, 695 N.E.2d 344 (Ohio Ct. App. 1997).

4.                  Some relationships have been found not to confer Of Counsel status:

a)                  Office sharers;

b)                 Relationships involving only one case;

c)                  Outside consultants. 

ABA Op. 90-357.

D.                Creating a “close, regular, personal relationship.”

1.                  Frequent contact between law firm and lawyer, but not necessarily daily. ABA Formal Op. 90-357.  Examples of regular contact might include:

a)                  Receipt of firm-wide e-mails regarding law firm matters;

b)                 Attendance at firm meetings;

c)                  Informal consultations and collaboration between lawyers and law firm attorneys on cases.

2.                  Sharing of office space and expenses, while not by itself sufficient to establish an “Of Counsel” relationship, is a “factor strongly supporting” existence of relationship. New York City Ethics Op. 1996-8 (1996).

3.                  Communicating the relationship through the law firm’s letterhead, website, and other law firm advertising materials, taking care not to overstate (suggest the lawyer is an associate or partner) or understate (fail to disclose Of Counsel status) the relationship.

4.                  It is not relevant what the compensation arrangements are between the Of Counsel lawyer and the law firm.  ABA Op. 90-357.