Adding an Of Counsel to Your Practice

I was recently asked the following question by a fellow young solo:

I am contemplating [adding an Of Counsel to] my practice and wanted to see what your thoughts were in general and specifically – any advice you might have in setting up that kind of relationship.”

What is an Of Counsel?

Of Counsel adj. reference to an attorney who is not actively involved in the day-to-day work of a law firm, but may be available in particular matters or for consultation. This designation often identifies a semi-retired partner, an attorney who occasionally uses the office for a few clients, or one who only consults on a particular case or on his/her specialty. Putting the name of the attorney “of counsel” on a law firm’s stationery gives the office the prestige of the lawyer’s name and reputation, without requiring his/her full-time presence. Source: The People’s Law Dictionary.

In the ABA’s Formal Opinion 90-357 (1990), an Of Counsel relationship is defined as one where an outside lawyer has a “close, regular, personal relationship” with the firm to which it serves as Of Counsel. This means that you should not designate a lawyer as Of Counsel simply because you share an office space or you work together on one case. In the above Opinion, the ABA gives four examples of qualifying Of Counsel relationships:

  1. A part-time lawyer within the firm;
  2. A retired partner of the firm available for consultation;
  3. A new, lateral attorney who is on a probationary period before being named partner; and
  4. A lawyer who is a senior attorney with the firm but is not on the partnership track.

Of course, these are examples and do not define all potential Of Counsel relationships.

What is the purpose of adding an Of Counsel?

For the new or young solo, the purpose of adding an Of Counsel to your practice is typically to obtain a close, regular, personal relationship with an attorney who can add particular expertise or experience to your practice for the benefit of your clients. In other words, the point is to beef up the available brain power, expertise and client offerings in your firm. In addition, if it is a more experienced attorney, you get the added bonus of a close mentor.

For example, let’s say you have a family law practice and have the opportunity to take on some international family law cases which are fascinating to you but also somewhat daunting. You may decide to bring on an Of Counsel with a particular expertise in international family law that can lend his or her experience and expertise to your firm’s international family law cases.

In his book, How to Start & Build a Law Practice, Jay Foonberg provides another scenario in which it may make sense to add an Of Counsel to your practice. Jay advises against two competent yet inexperienced lawyers starting a practice together (“As a general rule, two new lawyers getting together will accomplish very little except to prove that two can starve to death at least twice as fast as one”). Instead, Jay recommends establishing an Of Counsel relationship, where each lawyer creates their own solo practice and each solo serves as Of Counsel to the other’s firm. If you have ever been through, or seen someone close go through, a divorce, I don’t have to tell you how financially and emotionally obliterating a failed partnership can be. This Of Counsel arrangement is a test run for a partnership and essentially allows both lawyers to “try before they buy.”

So, how do you do it?

If you think adding an Of Counsel will enhance your law practice, the first step is to find one with the particular experience or expertise you believe will benefit your firm and your clients. Believe it or not, this is a fairly straightforward process – just ask. If you already have a relationship with the potential Of Counsel, go ahead and approach them with your proposed offer (but make sure you are presenting a scenario that has some benefit for them – no one wants to do additional work just to do you a favor). If you don’t already have a lawyer in mind, ask around your attorney network and let them know you are looking to establish an Of Counsel relationship with a particular type of attorney. That’s what I did and it worked out swimmingly.

Once you have found your new Of Counsel, you’ll need to put the Of Counsel relationship in writing. If you’re concerned with keeping overhead low (which all firms should be), then you will likely want to establish an independent contractor relationship, rather than an employee relationship, with your Of Counsel. In terms of compensation, try to work out a fee splitting arrangement where the Of Counsel gets paid when the firm gets paid by the client (this will prevent cashflow issues). Be sure to review your state’s fee splitting rules to ensure compliance.

Additional terms to include in the Of Counsel agreement are the term of the relationship, the duties of both the Of Counsel and the firm, malpractice insurance coverage (be sure to include who will foot the bill), the means and or tools that will be used to collaborate on cases and other rights and liabilities of both parties. Also, keep in mind that if your Of Counsel is practicing law with another firm or as a solo, you will likely need to perform conflicts checks when your firm takes on new clients. Different states have different rules when it comes to conflicts checks with an Of Counsel, so check out your state’s rules and call your state’s ethics hotline, to be sure.

An Of Counsel arrangement can be very rewarding for an experienced attorney who may be pursuing other interests but enjoys mentoring young lawyers or wants to continue to handle legal work in a less demanding arrangement. (Plus, who doesn’t love a little side money?). For the young lawyer, having an Of Counsel can be an enjoyable way to hone their skills in a particular area of law and to work with another attorney without taking on huge financial risks.

All opinions, advice, and experiences of guest bloggers/columnists are those of the author and do not necessarily reflect the opinions, practices or experiences of Solo Practice University®.

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6 comments on “Adding an Of Counsel to Your Practice

  • When a hiring attorney develops a regular and ongoing relationship with a freelance attorney, the two sometimes decide that the freelance attorney will be identified as of counsel to the hiring attorney’s firm. Over the course of my career as a freelance lawyer, I have been of counsel to three different firms. When I stopped working on a regular basis with those firms, the “of counsel” relationship terminated (of course, I might still work with the firms now and then).

    To avoid fee-splitting issues (and, frankly, to avoid cash flow issues for the freelancer), I always recommend that freelance attorneys insist on being paid regardless of when (and even if) the client pays the hiring attorney.

    Finally, the ABA sells a book called The Of Counsel Agreement: A Guide for Law Firm and Practitione. You can find it at http://is.gd/zcSrkC.

    • Thanks for your tips, Lisa!

      I agree that the Of Counsel should get paid even if the law firm doesn’t but it does make it easier on the law firm if the Of Counsel is paid when the client pays. Then of course, at some point (30 days out maybe?), the firm should pay the Of Counsel whether they have been paid or not. But it does make sense that if the Of Counsel is paid a fee as a contract attorney, then you don’t have to deal with fee splitting issues. In the end, that’s all dependent on the agreement that is negotiated and what the parties feel comfortable with.

  • I’m glad to see you writing about this, Rachel. It’s a misunderstood area for most solos and small firms.

    My prior firm with a business partner hired two lawyers Of Counsel. One worked out very well – his practice area meshed nicely with our business-oriented practice – and the other – a family law practitioner – just didn’t fit well with how we practiced law and we had to let him go. So my only advice is to be sure that the value-added proposition of bringing one Of Counsel is really there for your clients before you take on that administrative burden.

    • I totally agree, Suzanne. There’s no point in doing it, just to do it. If there is no real, tangible and necessary value that the Of Counsel will add, then its just a cost that eats away at profits. Such costs should be cut. However, with the right fit and combination of experience/expertise/practice area, it can be really awesome.

      Something I should have probably included in the article is that I think its a good practice to make the initial term 6 months or less. That way both parties can try it out and see if its working for them before committing to a longer term. And if its not working, there is an easy break at the end of the initial term instead of a break up with hard feelings.

  • This is very timely for me as I have been thinking about approaching a senior attorney about such an arrangement. It seems like it would be a good way of testing the waters for a solo to transfer an old practice to a younger lawyer in order to retire in a few years.

  • I don’t think that the fee splitting issue is a problem provided that it is handled by consulting bar counsel for guidance (and it’s generally allowed in most places where the agreement is in writing with appropriate disclosure to the client). What is more surprising is that you have been able to find someone to act as an of counsel who is willing to accept a fee share rather than being paid after the work is performed. I’ve been of counsel to firms and have never been asked to accept those terms. The adverse impact to the of counsel is even worse when you consider that the of counsel (if working on his/her own) might be be precluded from taking matters that conflict with clients/matters your firm services. I suppose if a case were substantial or precedential, I’d be willing to consider a fee share or deferred payment of some type but not for ordinary run of the mill work. But I’m not sure that I would ever affiliate as of counsel with a firm under the terms you’ve discussed – too one-sided from my perspective (though maybe if I were retired or just working part time I would feel differently – and perhaps that is a potential ground for finding of counsels)

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