ever missed can be substantial . Always address the conflict issue prior to establishing Of Counsel relationships so everyone understands what the additional burden will be and can agree the benefits outweigh the costs .
Vicarious Liability - While the affiliated firm is not going to be liable for the independent acts and omissions of the Of Counsel attorney that were outside of the apparent scope of the Of Counsel ’ s involvement 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 attorney by the affiliated firm or 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 attorney and the other will not . Then only use letterhead showing the Of Counsel attorney ’ s name when that attorney is actually working on a firm matter . Likewise , make sure 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 the Of
Counsel attorney had no involvement in or awareness of , but was unfortunately listed as Of Counsel on the letterhead that was in use . Should this Of Counsel attorney not have coverage under the affiliated firm ’ s malpractice policy , there may be a significant problem because the Of Counsel attorney ’ s own policy will often not afford 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 attorney would be facing a claim that arose out of work done for a client of the affiliated firm , thus the coverage gap . These sorts of “ who is the client ,” “ who is the attorney of record ,” and “ who is the named insured ” are common challenges that underscore the necessity of investigating and addressing the insurance coverage issues early on . Appropriate coverage for the exposures of both the affiliated firm and the Of Counsel attorney can usually be obtained , if the issue is addressed at the outset .
Closing Thoughts
Beyond the above , the best risk management advice I can give regarding Of Counsel relationships is to encourage you to always keep in mind joint accountability . Of Counsel relationships can be quite valuable , but clients will rightly respond to these affiliations as if they represent a single “ entity .” Mutual accountability will be in play , particularly when a client is directly involved with both parties to the Of Counsel affiliation . I do believe Of Counsel relationships are of significant value as long as these relationships are entered into with client interests in mind as opposed to being a marketing strategy . Overlook this , and problems may lie just around the corner .
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