One of the most-discussed trends in the workplace in recent years is the growing number of people who make a career out of accepting a series of freelance assignments, rather than simply taking on a full-time job as an employee. A prominent example is the Uber car driver, who takes on jobs at times as determined by the driver, rather than agreeing to work particular shifts in advance. There are significant concerns with the development of the “gig” economy, since freelancers don’t have many of the legal protections available to employees, and these concerns will need to be addressed. However, the flexibility that these arrangements give to those to participate is undeniably appealing.
The law business is not immune from these developments, and I view “of counsel” relationships as a manifestation of them. I’m not thinking of the counsel title as used in large firms, i.e., a position used as a tryout for partnership, a specialist in a narrow area of the law or someone who’s reached the firm’s retirement age for partners. Rather, I mean the position as used in the world of small/solo firms, where an attorney with a particular expertise is brought on to assist a firm that doesn’t have that expertise only on a project-by-project basis. The of counsel attorney is usually treated as an independent contractor and paid for the specific work on the project, as opposed to drawing a regular salary. It enables the firm to broaden the amount of matters it can take on without making a long term financial commitment to an attorney.
I’ve dipped my toe in the of counsel waters myself. Although the great majority of the work I do is for clients of my firm, I have ongoing relationships with a few other small firms who specialize in other areas like litigation, estate planning and intellectual property but bring me on as needed to handle corporate/securities matters.
Typically, the of counsel relationship involves, as an economic matter, a sharing of fees between the of counsel attorney and the firm, as the counsel will be paid a portion of the amount billed by the firm based on the work performed. (If structured correctly, of counsel relationships do not violate state prohibitions on fee splitting.) Another detail to be addressed is liability insurance. Usually, the firm is responsible for insurance on the counsel’s work, and the carrier may need to be notified as attorneys are added as of counsel.