By Mary F. Andreoni - ARDC, Ethics Education Senior Counsel
What does “Of Counsel” mean? What are the ethical and risk management implications in using this professional designation? In the past, most of us would think of either a semi-retired partner who wanted to maintain a relationship with the firm or a former judge or government official transitioning back to private practice, both serving in a limited role, available to the firm for consultation and advice. Over the years that designation has been broadly applied to a variety of relationships particularly as firms seek to expand client services and increase revenue.
Understanding the meaning of the “Of Counsel” label and its proper use is critical because it can establish who may be held responsible ethically (and financially) to clients. The “Of Counsel” relationship raises ethical considerations involving conflicts, fee sharing, and advertising as well as risk management concerns of vicarious liability and malpractice coverage.
Neither the Illinois Rules of Professional Conduct nor the ABA Model Rules define the term “Of Counsel” and there is scant disciplinary caselaw on its use (or misuse). Its meaning and the ethical implications of that designation, however, can be found in ABA Formal Opinion 90-357 (1990), entitled “Use of Designation ‘Of Counsel’”. For more than thirty years, it stands as the seminal guidance for lawyers thinking about forming an “Of Counsel” relationship with another lawyer or law firm. Illinois guidance can be found in several ethics advisory opinions published by the Illinois State Bar Association (ISBA), which are generally consistent with ABA Formal Op. 90-357.
“Of Counsel” Definition: ABA Formal Opinion 90-357 (1990)
ABA Formal Op. 90-357 defines the “Of Counsel” professional designation as a “close, regular, personal relationship” with a lawyer or law firm that is other than that of a partner or associate or the equivalent of a partner or associate. ABA Formal Op. at p. 2.
The opinion identifies four common relationships in which the “Of Counsel” designation appropriately applies include:
1) the part-time practitioner, practicing in association with a firm, differently than the mainstream lawyers of the firm;
2) the semi-retired partner who remains associated with the firm and is available for selective matters;
3) the probationary partner-to-be recently joining a firm with the expectation of becoming partner after a relatively short period of time; and
4) the lawyer with permanent status between that of a partner or associate who has “tenure” but lacks the expectation of promotion to full partner status.
Thus, an “Of Counsel” lawyer could be an independent contractor or employee depending on the terms of the “Of Counsel” agreement. Also, in order to maintain the requisite close, regular and personal relationship, the “Of Counsel” lawyer would have to maintain an active status license.
Relationships that are not “Of Counsel” according to ABA Formal Op. 90-357 are:
- mere forwarder or receiver of legal business;
- co-counsel relationship on a case;
- occasional consultations or collaborations;
- outside consultants; or
- partner or associate.
Id.; see ISBA Advisory Op. 16-04 (Oct. 2016).
Ethical and Risk Management Considerations
In deciding whether to use the “Of Counsel” title, lawyers and law firms should give due consideration to some of the following ethical and financial implications of such a relationship.
Conflicts of Interest
The “Of Counsel” lawyer is “associated” with the firm and, therefore, considered a member of the firm for purposes of both the general imputation of disqualification pursuant to IL Rule 1.10 and the imputation of disqualifications resulting from former government service under IL Rules 1.11(a) and 1.12(c), as well as considered to be a lawyer in the firm for purposes of IL Rule 3.7(b), regarding the circumstances in which a lawyer is called to be a witness in a proceeding. ABA Formal Op. 90-357 at p. 4; ISBA Advisory Op. 16-04 (2020); IL Rule 1.0(c) (Defining “firm” or “law firm” as “a lawyer or lawyers in a law partnership, professional corporation, sole proprietorship or other association); Restatement Third, The Law Governing Lawyers, Section 123, comment c(ii) (2000).
Both the firm and “Of Counsel” lawyer must take into consideration their respective conflict checking procedures and keep in mind that throughout the relationship conflicts must be continuously checked and dealt with just as if the “Of Counsel” lawyer was a member of the law firm.
Division of Fees
A division of a fee between lawyers who are not in the same firm is governed by IL Rule 1.5(e) which requires: (1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; (2) the client agrees to the arrangement, and the agreement is confirmed in writing; and (3) the total fee is reasonable.
The question whether an “Of Counsel” lawyer is considered a member of the same firm for purposes of IL Rule 1.5(e) was not covered in ABA Formal Op. 90-357 but was addressed in ISBA Advisory Op. 16-04 (Oct. 2016). ISBA Advisory Op. 16-04 considered this question for the first time and concluded that given the close nature of the “Of Counsel” relationship, the “Of Counsel” lawyer should be viewed as being in the same firm and, as such, the restrictions on fee division in IL Rule 1.5(e) do not apply. The ISBA position is consistent with the prevailing view taken in other jurisdictions.
To the extent that fee rules differ from state to state, however, the firm and “Of Counsel” should review the rules in states where the “Of Counsel” is licensed, where any client is located and where any legal work may be performed.
Public Communications of the “Of Counsel” Relationship
IL Rules 7.1 and 7.5 set forth the prohibition against using any form of public communication containing information that is false, fraudulent, misleading, or deceptive.
In using the “Of Counsel” designation, both the law firm and the lawyer are conveying to the public that the “Of Counsel” lawyer’s continuing relationship with the firm is close, regular, and personal. Absent these characteristics, using the “Of Counsel” designation on a firm’s letterhead, website or other public communications could be considered false or misleading.
Also, the “Of Counsel” lawyer must use his or her own stationary and not that of the firm’s when providing legal services not in connection with the firm’s clients. When working on matters of firm clients, the appropriate identification of the lawyer’s “Of Counsel” status must be made clear in all communications to clients. See In re: Disciplinary Proceedings against John R. Maynard, 2008AP417-D (Wis. S.Ct. 12/29/09) (lawyer suspended 90 days for, inter alia., false and misleading communications when he failed to identify his “Of Counsel” status when he used law firm stationery that still identified him as a principal).
A law firm may retain in its firm name the name of a former name partner who retires from active practice but maintains an “Of Counsel” relationship with the firm (and practices nowhere else), provided that the firm name is long-established and well-recognized by that name, effectively assuming the status of a trade name under IL Rule 7.5(a), and that the firm takes reasonable steps to show the former partner’s “Of Counsel” status. ABA Formal Op. 90-357 at p. 3; ISBA Advisory Op. 03-02 (Jan. 2004); cf. ISBA Advisory Op. 20-04 (May 2020) (impermissible for a law firm's name to include the name of the retiring, non-practicing former partner as “Of Counsel” where no continuing or on-going relationship with the firm).
Legal Liability, Malpractice and Risk Management
To the extent that lawyers and law firms in “Of Counsel” relationships are treated as one firm for purposes of conflicts and fee sharing, so too is the potential for shared malpractice liability between lawyers or law firms affiliated in “Of Counsel” arrangements. Before forming an “Of Counsel” relationship with another lawyer, a firm should carefully screen potential candidates and monitor the relationship continuously. If the “Of Counsel” lawyer misuses the firm’s letterhead in his or her own practice and on matters not related to the law firm, vicarious liability could be imposed on the law firm for the malpractice of the “Of Counsel” lawyer even if the legal matter did not involve the work of the law firm.
Malpractice insurance carriers will usually require the firm to add the “Of Counsel” lawyer to their legal professional liability insurance policy but will exclude any work done by the “Of Counsel” attorney outside of the firm. Appropriate coverage for the exposures of both the affiliated firm and the “Of Counsel” lawyer should be addressed at the outset.
From a risk management perspective, it would be wise to have a written “Of Counsel” agreement establishing such things as status in the firm, duties, limitations on authority to act for and in the name of the firm, malpractice liability insurance, compensation, office use, benefits and termination. For sample agreements and other resources, see ABA publication, OF COUNSEL – A Guide for Law Firms and Practitioners (Fifth Edition 2019) and Of Counsel Agreements, Lawyers Mutual Liability Insurance Company of North Carolina (March 2017).
“Of Counsel” Relationship to Multiple Firms
A lawyer may be ‘‘Of Counsel’’ to more than one law firm provided that the association with each law firm is ‘‘close, regular [and] personal’’ and conflicts of interest are avoided. There is, however, “some point at which the number of relationships would be too great for any of them to have the necessary qualities of closeness and regularity, and that number may not be much beyond two.” ABA Formal Op. 90-357 at p. 3. Also, the implications for disqualification and malpractice liability will also operate to limit the number of “Of Counsel” affiliations as a lawyer who serves as “Of Counsel” is considered a member of the law firm for purposes of imputed disqualification and extends to all lawyers and firms connected by the “Of Counsel” relationship. “[T]he effect of two or more firms sharing an of counsel lawyer is to make them all effectively a single firm, for purposes of attribution of disqualifications.” ABA Formal Op. 90-357 at p. 3. Also, the “Of Counsel” title can apply to a firm such that a firm can be “Of Counsel” to another lawyer or law firm. Id.
“Of Counsel” Relationship to an Out-of-State Lawyer or Firm
There is no prohibition per se in establishing an “Of Counsel” relationship with a lawyer not licensed in the same jurisdiction as the lawyers in the law firm. Both the firm and “Of Counsel lawyer must be mindful of the ethics rules of all jurisdictions where any lawyer is licensed and, in particular each jurisdiction’s rules on the unauthorized practice of law. See IL Rule 5.5.
The “Of Counsel” lawyer cannot be used by the firm as a ruse to practice law in a jurisdiction in which the firm’s lawyers are not licensed. See Matter of Crosley, 29S00-1712-DI-717 (Ind. 6/19/18) (Indiana lawyer in “Of Counsel” arrangement with Texas law firm marketing criminal record removal services nationwide suspended 30 days for assisting in the unauthorized practice of law where substantially all the work on Indiana cases was performed by lawyers not authorized to practice in Indiana).
Likewise, the “Of Counsel” lawyer cannot enter into a jurisdiction where he or she is not licensed and begin to practice law in that jurisdiction simply because he or she is “Of Counsel” to a firm in that state. See In re Borzeka, M.R. 18891, 99PR0111 (Ill. Sept. 24, 2003) (lawyer suspended three years and until further order of court for, inter alia, assisting in the unauthorized practice of law by allowing an unlicensed law school graduate to practice from his office as “Of Counsel” (In re Campagna, M.R. 16578, 99CH35 (Ill. March 2, 2000) (disbarred on consent)).
The key ethical requirements of an “Of Counsel” relationship are: 1) the “Of Counsel” lawyer is actively licensed to practice law; 2) a close, regular, and personal relationship exists between the “Of Counsel” lawyer and the firm; 3) the relationship does not involve conflicts of interest; and 4) the use of the “Of Counsel” title is not false or misleading to clients and potential clients about the nature of the relationship that exists between the clients, firm and the “Of Counsel” lawyer.
Additionally, the lawyer and the firm should carefully consider their reasons for entering into an “Of Counsel” relationship, do their due diligence, and reduce the terms of the relationship to a written agreement, with all the relevant ethical and risk management considerations addressed by the firm and the lawyer’s respective office procedures.
 ISBA ethics advisory opinions on the “Of Counsel” designation: Opinion # 20-04 Named partner in full-time nonlegal employment and no longer practicing law; Opinion # 16-04 Applicability of fee division and conflict of interest rules in of counsel relationship; Opinion # 07-02 Continued practice after sale of law practice; Opinion # 03-02 Firm name implying partnership, referencing Of Counsel relationship; Opinion # 840 Network of affiliated law firms; Opinion # 776 Lawyer legislator as Of Counsel : Opinion # 817; and Independent lawyers providing nonexclusive work to law firm.
 See, e.g., Arizona Opinion 16-01 (2016); Maine Ethics Op. 175 (2001); Virginia Ethics Op. 1866 (2012); Texas State Bar Op. 450 (1987); Ohio Ethics Op. 2004-11 (2004); see also Restatement (Third) of the Law Governing Lawyers § 47 Comment (g) (2000) (stating that the rule governing fee splitting between lawyers not in the same firm “does not prevent a law firm, of whatever form, from dividing income among its lawyers (including lawyers who are of counsel and temporarily employed) in any lawful way provided in the firm agreement or by an ad hoc arrangement”).