According to American Bar Association Formal Opinion 90-357 the term “of counsel” describes “a close, regular, personal relationship” between an attorney and firm, usually when the attorney works for the firm not as an associate or a partner but as an independent contractor.
As a solo or small firm lawyer, the decision to become Of Counsel to another firm is a biggie. You stand to gain valuable experience, you are pretty much guaranteed to have work to do and a paycheck, and you often get to work with more experienced lawyers. But you spend time on the other firm’s clients and cases at the peril of your own, and you will probably get paid less for that time than if it was work done for your own client.
The decision to hire an attorney Of Counsel to your firm is also a big one. You get help with your clients and cases for potentially less than you would have to pay an associate or partner and without having to pay for costly benefits. You also get the benefit of the Of Counsel’s experience in other practice areas in addition to your own. But you lose control over the worker, who is typically an independent contractor, and run the risk of losing clients to the Of Counsel when he or she decides to leave your firm. Not to mention the administrative nightmare of managing their fee agreement. Plus, with the IRS cracking down on employers classifying workers as independent contractors rather than employees, as a small business owner you need to think carefully about whether that Of Counsel should really be hired as an associate.
When I first left Big Law, three years ago, I offered to continue to work for my old firm on a contract basis, Of Counsel, on a case-by-case basis. They were not really interested in having me Of Counsel to Big Law while I worked to build my own firm, and with good reason: my practice areas overlapped with theirs and it only created an opportunity for me to walk away with more of their clients than the handful that were already coming with me. If I was going to continue to work on their cases, after all, they would just as soon have kept me on as Of Counsel in their offices rather than out on my own.
When I was in partnership with another lawyer, a year and a half ago, we brought on several other lawyers as Of Counsel to our firm in practice areas we did not serve. None of them worked out well. Either we were not able to pay them what they were making previously, or we weren’t able to attract clients to their practice area, or they drove us crazy with administrative details. Or all of the above.
More recently, I did some work as Of Counsel to an in-house legal department that went badly. Their demands were more than I anticipated, and I was pulled in too many directions trying to take care of them, take care of my other clients, market my services and run a law firm. It was that one thing too many, and I have to admit that I failed at trying to juggle everything. As a result, I had a rather lean June and July, and have only begun to recover in August.
So it might surprise you to find, after my own negative history on both ends of the Of Counsel relationship, that I just hired a young lawyer as Of Counsel to my firm.
What I looked to this time was not my experience with law firms at all. I looked to my experience in the software industry. They had one thing right: try employees before you buy them. It is typical in the software industry to hire a developer as an independent contractor first, see how things go, and offer him a permanent position if everything works out.
Traditionally, law firm Of Counsel are lawyers who did not work out on the partner track at Big Law or who, after several years of experience in a firm, want to work as an independent contractor. Increasingly, Of Counsel are young lawyers who were forced by a tight job market to hang a shingle and are seeking work with other firms to gain experience.
In my case, I hired as an independent contractor a young solo attorney who was looking for more experience. Shannon is bright, creative and energetic, and interested in the same practice areas as me. She has an entrepreneurial streak and hopes to one day either work into a partnership position with my firm or gain enough experience to really thrive in her solo practice. She doesn’t have to give up one in order to try the other, and I don’t have to find a lawyer’s salary in my budget to bring in some much-needed help. It’s a win-win.
I am giving her a chance to build her skills and build her own client base while earning a percentage of the fee for work billed and collected for my firm. I give her an incentive with a slightly higher percentage to bring clients into the firm. I am teaching her the ins and outs of representing small business, marketing your services and growing a practice. In exchange, she is helping me be more productive while managing my firm’s day-to-day operations.
So for now, she will be Of Counsel to my firm, and we will figure out together whether she will come aboard long term or whether she will go her own way with The Law Office of Shannon N. Davis. Either way, it’s worth giving this a shot.
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®.