The Primer On Of Counsel Agreement Templates: Essential Elements and Guidelines

What Is An Of Counsel Agreement?

An "of counsel" relationship is way for a firm to retain a lawyer who assumes a permanent, semi-permanent, or frequent but limited relationship between a lawyer (a partner or employee) and a law firm. Of counsel typically is a part-time attorney, often working in a firm of several attorneys with different practice areas or solo practitioners.
The meaning of the "of counsel" designation and the essential nature of a relationship to which it refers is an apt area for clarification. The definition of "of counsel" and the meaning and scope of that designation as to specific lawyers at a particular firm are questions that regularly arise. Significant conflict has arisen on the topic, particularly where bar associations approve or disapprove, sanction or disapprove , the use of the term "of counsel" by a particular law firm.
The term "of counsel" is defined in at least one ethics opinion as "a lawyer who has a continuing relationship with a law firm." The definition and breadth of the term have varied from jurisdiction to jurisdiction. Though a number of jurisdictions have moved to a more restrictive use of the term, the phrase has typically been used to describe a lawyer’s relationship with a law firm that is less than that of a partner or associate. Thus, the term usually involves some permanent relationship, involving the sharing of space and employees, and allowing the retention of client’s matters to the of-counsel lawyer. This concept is consistent with the traditional meaning of "of counsel."
The phrase does not necessarily refer to a lawyer’s status vis-a-vis a particular institution, but may refer — as it has been traditionally understood — to a group of lawyers who practice together and share responsibility for the quality of each other’s work.

Essential Components in An Of Counsel Agreement

The Of Counsel Agreement needs to address, in broad form, the "Origins" of the relationship. Of Counsel arrangements are unique, and the range of circumstances in which an Of Counsel may work with a firm are equally unique. Of Counsel attorneys can be in-house members of firms, to which they may bring clients and/or independent practices, or may combine their And/Or client development roles with Independent Law Firm Development know-how in some other manner.
Therefore, the initial component of an Of Counsel Agreement should address the Origin of the commitment. For example:
If the attorney was referred by a partner in the firm, who then becomes the Of Counsel’s contact person at the firm, the situation may be described as follows:
Of Counsel’s Origin
This Agreement is made as of the ______ day of ______, 20__, between [Name of The Firm] located at [Address of The Firm], ("Firm"), and _____________ ("Of Counsel"). This Agreement supersedes and replaces any prior agreement between the parties on the subject matter hereof and continues the Of Counsel’s representation of [Name of Partner] as a partner of the Firm. Of Counsel and [Name of Partner] were formerly law partners from _________ to ___________________, while working together at [Predecessor Firm], until [Term of Agreement]. During their partnership, Of Counsel and [Name of Partner] developed substantial law practice in [Area(s) of Law], which Of Counsel previously brought to the Firm and now continues to bring to the Firm. By joining the Firm as Of Counsel, Of Counsel brings his/her expertise in [Area(s) of Law] and his/her clients to the Firm for the benefit of the Firm. Of Counsel shall continue the excellent reputation of the Firm in the areas of concern during the term of this Of Counsel agreement, as well as expanding the practice of the Firm in these areas. The term of this Agreement shall begin on ______, and shall continue unless terminated by either of the parties upon _______ (_____ ) days written notice.
If the Of Counsel is or will become a member of the firms management, the situation may be described as follows:
Of Counsel’s Origin
This Agreement is made as of the _____ day of ______, 20__, between [Name of The Firm] located at [Address of The Firm], ("Firm"), and _____________ ("Of Counsel"). This Agreement supersedes and replaces any prior agreement between the parties on the subject matter hereof and continues the Of Counsel’s representation of [Name of Counsels’] clients as a partner of the Firm. Of Counsel and [Name of Partner] have known each other for _________ years. Of Counsel now believes that his/her clients will greatly benefit by being associated with the Firm. Of Counsel also understands that he/she will be responsible for managing the Firm for the next _____ years and thereafter for the marketing and coordination of firm business. In addition, Of Counsel will bring his/her expertise in [Area(s) of Law] to the existing firm practice. By joining the Firm as Of Counsel, Of Counsel brings his/her clients who practice in the areas of concern during the term of this Of Counsel Agreement. The term of this Agreement shall begin on _____, and shall continue unless terminated by either of the parties upon _______ (_____ ) days written notice.

Advantages of Using an Of Counsel Agreement Template

Using a pre-made template for an Of Counsel agreement can serve a number of useful functions. Above all, a template is a shortcut that can save both time and money. As an attorney, your most precious commodity is your time. Using a template may allow you to accomplish the same goal in much less time than it would take if you were creating separate agreements from scratch.
The ability of a given document to be utilized by many different parties in many different circumstances means that, once created and saved, it can be reused — and in so doing, save time and money — for years after its initial creation and use.
Consistency is perhaps the most important benefit of using a template. It ensures that important matters which touch the relationship between your practice and/or its individual attorneys and of counsel will be handled in a uniform way, regardless of who first drafted the document. The ability to create a set of documents that are uniform means that everyone involved will have the same expectations of what each of the terms in these documents will mean, which in turn translates to your practiced understanding of the consequences of entering into each agreement. This can be an exceedingly important ability when a client, in that rarified moment, raises the question of why or how a given circumstance has occurred. By being able to demonstrate and point to the language of the template used, this consistency can be a great advantage.
An Of Counsel agreement template also ensures compliance with all basic legal standards. A pre-made template, such as the one used by many of the clients of LegalNature, is generally drafted by an attorney with many years of experience. One of the most frustrating things is learning a certain provision was necessary to include as recently as last year, when you failed to include it in some of your agreements. This may happen less often with a template, whose drafters have a larger repertoire of useful provisions at their disposal. In the alternative, you can focus on the remaining work and leave the logic and order to the professional — diminishing the chance for error and for ill will.

Major Issues To Avoid

Open-ended agreements. Regardless of the business structure of a firm, agreements with attorneys-of-counsel should not be left open-ended. Many firms include an indefinite term, leading to associated issues of termination if a disagreement occurs.
State law complications. Attorneys and the firms with whom they partner must comply with each state’s laws regarding of counsel relationships, including advertising and solicitation rules, fee-sharing agreements, non-solicitation agreements, and many others.
Breach of fiduciary duties . An attorney owes a fiduciary duty to their clients that cannot be ignored, even when an attorney departs from a firm. Many law firms fail to acknowledge the depths of these duties, exposing themselves to liability.
Changing compensation. Many firms struggle to determine how to fairly compensate an attorney of counsel that is neither a partner nor an employee. Issues arise when changing compensation or benefits. Changes can be perceived as demotions, which can lead to disputes and the attorney of counsel terminations. To avoid this, a fixed compensation schedule should be included in the Of Counsel agreements.

Personalizing The Agreement To Suit Specific Circumstances

While the Of Counsel Agreement Template provides a foundational framework, law firms should not view this document as a rigid contract. Instead, it should be treated as a basis from which the agreement can be customized to meet the specific needs of the practice. Factors that need to be considered when tailoring the document include the size of the firm, the jurisdiction in which the firm operates and the area of practice that the agreement will cover.
Larger firms may find it more appropriate to have a separate agreement with each Of Counsel. Such document may help to minimize misunderstandings and confusion regarding the rights and responsibilities of each Of Counsel and the firm. Of Counsel who function in a full time capacity may require a more robust agreement than part time employees while those requiring a deferred compensation agreement may necessitate additional provisions.

Legal Considerations and Regulatory Compliance

A thorough understanding of the legal considerations and compliance requirements for an Of Counsel Agreement is crucial for any attorney looking to define a professional relationship with their supervisory attorneys. The central aspect of these agreements is to delineate the nature of the relationship between the practitioner-of-record and the lay client. In addition, the rules provide that the attorney-of-record is responsible for the filing, prosecution and other duties relating to the application.
The Patent and Trademark Office guidelines provide a detailed discussion of the requirements of Rule 10.18 (of the MPEP) in Examining Procedures 502.01: "An ‘of counsel’ relationship does not in itself give rise to PTO Rule 10.18(b)(2)(ii) . . . because, by itself, such a relationship does not involve direct communication with a client." This rule requires that an attorney who communicates directly with a client must be registered to practice before the USPTO. There are exceptions, however, the rule does not require registration where (1) an attorney or agent outside the United States communicates directly with a client outside the United States, (2) there is direct communication with a client that is a corporation or other organization with respect to preparation, filing , or in the conducting of any business with the Office, or (3) an individual communicates for the purpose of replying to a notice by the Office requesting the identity of the owner of a mark or applicant for a mark. Therefore, generally, paragraph (c)(7) of 37 CFR 10.14 and section 817 of the Manual of Patent Examining Procedure (MPEP) 502.01 (XP) states: A practitioner who is not registered to practice before the PTO may be listed under a particular application (and thus be able to access the electronic and paper records for that application) where, e.g. 1) the non-registered practitioner is employed by the firm of record for that application, but has no rights to enter the Office as a registered attorney or agent; or, 2) the non-registered practitioner, who is an employee of the firm of record for that application, is authorized to act for the applicant and prosecutes the application directly, even though he/she may have no rights to enter the Office as a registered attorney or agent. A practitioner would be considered "listed" in an application under either of the circumstances above where the unenrolled practitioner appears in an application as counsel (e.g., where the practitioner’s name and title appear on a filed power of attorney, or a change of attorney).