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Is Your Firm Considering An “Of Counsel” Relationship?

Is Your Firm Considering An “Of Counsel” Relationship?

According to Wikipedia an “Of Counsel” in the legal profession of the United States is the title of an attorney who has a relationship with a law firm or an organization, but is not an associate or a partner. Some firms use titles such as “counsel”, “special counsel”, and “senior counsel” for the same concept. According to the American Bar Association Formal Opinion 90-357, the term “of counsel” is to describe a “close, personal, continuous, and regular relationship” between the firm and counsel lawyer. In large law firms, the title generally denotes a lawyer with the experience of a partner, but who does not carry the same workload or business development responsibility.

The general rule is the “of counsel” lawyer is responsible for his own malpractice, but is not vicariously liable for the “firm’s malpractice”. As a result the “of counsel” needs his or her own insurance policy to cover his or her independent acts. The firm is liable for its malpractice and the firm’s partners are vicariously liable for the malpractice of an “of counsel” lawyer acting within the actual or apparent scope of the firm’s practice and for the firm. As a result the “of counsel” should be added to the firm’s malpractice insurance policy, but only for the acts that the “of counsel” performs for “the firm”.

A firm considering forming an “of counsel” relationship with another lawyer should:

  1. Use a written “of counsel” agreement which outlines duties, benefits, compensation, use of the office and use of the office letterhead.
  2. Review your malpractice insurance. Make sure the “of counsel” lawyer is added to the law firm’s malpractice policy to cover acts performed for the firm. The “of counsel” lawyer should be required to maintain his or her own malpractice policy, for the acts performed on behalf of the “of counsel” attorneys own separate practice.
  3. Monitor the relationship to make sure both the “of counsel” lawyer and the firm are implementing the agreement. To avoid a malpractice “surprise” the review should focus on preventing acts that may indicate that the “of counsel” lawyer is acting within the actual or apparent scope of the firm’s practice beyond what has been agreed to by the parties.

Law Firms Under Cyber Siege

Law firms are under Cyber siege. The headlines focus on the large law firms. However, small and midsize law firms are also susceptible to damages from cyber attacks.

Kaestner & Berry is proud to work with SafeLaw. SafeLaw offers standalone cyber risk protection created for the unique cyber risks of law firms. The SafeLaw policy was designed to fill gaps in Lawyers Professional Liability and protect law firms from first and third party cyber risk losses including:

  1. Confidentiality and Privacy Breach Liability: This is protection from third parties for the firm’s failure to prevent disclosure of personally identifiable information, information subject to attorney client privilege, data subject to a non-disclosure agreement and other confidential information.
  2. Regulatory Proceedings, Fines and Penalties Liability: Third-party legal liability protection for regulatory, administrative, or disciplinary proceedings as well as resulting fines and penalties due to a data breach or the firm’s failure to comply with privacy, identity theft, data security or data breach notification laws. Coverage also extends to violations of PCI standards.
  3. Network Security Liability: Third-party legal liability protection for the firm’s actual or alleged failure to prevent the transmission of hacker attacks, or denial of service attacks.
  4. Multimedia Liability: Third-party legal liability protection for copyright infringement, trademark infringement, and defamation arising out of the firm’s electronic publishing.
  5. Data Breach Response Expense: First-party coverage for the firm’s expenses following a data breach including access to a panel of data breach response experts such as I.T forensics, legal advisors, public relations, victim notification, call center support, credit monitoring and identity theft remediation.
  6. Electronic Data Restoration Expense: First-party coverage for the firm’s expenses to recreate or restore data, software, or firmware that is corrupted or damaged by a hacker attack, virus, denial of service attack, or administrative errors.
  7. Business Income Loss: First-party coverage for the firm’s loss of income and extra expenses due to computer system disruption caused by a hacker attack, virus, denial of service attack, or administrative errors.
  8. Cyber Crimes: First-party coverage for theft of the firm’s money, securities or other property due to fraudulent funds transfers or fraudulent use of the firm’s computer system to steal money, securities or other property.
  9. Cyber Extortion: First-party coverage for the firm’s expenses to mitigate or terminate cyber extortion or ransomware threats.

If you do not have a standalone SafeLaw policy you will find that your business is Not protected for one or more of these risks. Contact Kaestner & Berry for a SafeLaw Cyber quote.