Unveiling the Risks: How the ‘Of Counsel’ Title Can Impact Your Insurance Coverage

Titles in business are considered very important: President, CEO, VP etc……law firms the same thing…Partner, senior partner, member, associates.  But did you know there is one title in a law firm that can cause confusion and sometimes affect insurance coverage?  The title OF COUNSEL. 

I’ve been told, ask 10 lawyers the definition of OF Counsel and you’ll get 10 different answers.  At some point, we can discuss and try to narrow down a more specific definition of what an OF Counsel is but today I want to point out how the term OF COUNSEL may affect your legal malpractice insurance coverage at retirement.

Most policies provide what is called a free retirement tail endorsement when an attorney from the firm retires.  Usually there are a few requirements that must be met in order to qualify for that free tail.  On some policies OF COUNSEL attorneys are not eligible for the free tail strictly because they are titled OF COUNSEL.  This usually is not an issue for a solo but for firms with 2 or more attorneys it can cause great concern.

I have seen instances where firms with 3 or 4 attorneys give the title OF COUNSEL to the founding member of the firm with no consideration of how this could affect the founding members coverage, his or her estates coverage or the retiring attorneys financial position during retirement.  Usually the change to OF COUNSEL is a result of the attorney working less hours and nothing more.  In this case it seems a shame for the attorney to lose coverage and in some cases not be able to get back because of working less time?  

So before changing anyone’s “title” to OF COUNSEL and printing new letterhead check your legal malpractice policy. Contact your broker/carrier and ask them for an interpretation of the coverage.  Make sure the change to OC won’t affect the retirement tail coverage. OR if it does you know and are ok with any change.  Who knows, maybe it won’t change but then again maybe it will.  Better safe than sorry.