After helping our client, John, set up his professional law corporation, he came back to us with an important question: “Now that I have my own law corporation, can I still serve as of counsel to another law firm?”

His vision was clear: To establish his private practice that reflects both independence and long-term growth. But he also wanted to remain connected to the broader legal community by entering an attorney of counsel agreement.

He’s not alone, and you’re probably wondering the same. Many young, hardworking attorneys in California want to maintain their independence by forming their own professional law corporation. However, while still in the early stage of your career, you’d also want to preserve valuable relationships with established firms.

The good news is you can enjoy both: early-career independence and staying connected. But there are specific “of counsel” ethics standards California attorneys must follow. Read on to ensure that you’re protecting your own professional law corporation while working with other law firms.

What Does Of Counsel Mean in a Law Firm? 

Before examining the compatibility of shareholding and of counsel attorney status, it’s essential to understand what the latter actually means under California law.

An of counsel attorney agreement is specifically defined in the California State Bar Formal Opinion No. 1993-129 as having a “close, personal, continuous, and regular” relationship with the law firm you’re working with. That means performing in this capacity goes far beyond occasional consulting or case-by-case collaboration.

In the practical sense, an of counsel attorney is someone who maintains a relationship with a law firm. But the designation isn’t merely honorary or casual, as it carries specific ethical and legal implications as well. A “close, personal, continuous, and regular” agreement can translate to you being involved with a law firm through:

• Regular consultation on legal matters
• Ongoing advisory roles within the firm’s practice areas
• Consistent availability for firm matters
• Integration with the firm’s decision-making processes

When Is It NOT an Attorney Of Counsel Agreement?

According to the California Rules of Professional Conduct 1.0.1, you can’t have an of counsel status while also being a designated partner, associate, officer, or shareholder of the law firm you’re working with.

Can Law Corporation Shareholders Have an Of Counsel Agreement in California?

The answer is definitively yes. California law regarding of counsel attorneys permits an attorney who is a shareholder in one professional law corporation—even if it’s your own—to simultaneously serve as of counsel to another law firm. However, there are key requirements that must be met.

1. Meeting the Relationship Standard

Any of counsel agreement in California must satisfy the “close, personal, continuous, and regular” definition established by the State Bar. This requirement applies regardless of your shareholding status elsewhere. 

This also means your work with the law firm where you’re affiliated with as of counsel cannot be: 

• Purely transactional or project-based
• Sporadic or irregular
• Based solely on referral arrangements

2. Conflict of Interest Management

This may be one of the most critical aspects of maintaining dual roles as a shareholder of your professional law corporation and having an of counsel agreement in California. 

When an attorney serves as both a shareholder in one entity (i.e. a professional corporation) and of counsel attorney to another, California ethics rules treat both entities as a single firm for conflicts purposes. 

“If you’re of counsel to another firm, the State Bar often considers you and that firm to be one and the same for conflicts purposes,” Incorporation Attorney’s Andy Gale explains. “That means you have to check for conflicts across both entities before taking on any new clients.” 

This means: 

• Comprehensive Conflicts Checking: All potential conflicts must be identified across both the attorney’s corporation and the of counsel firm
• Written Disclosures and Informed Consent: When conflicts arise, written disclosure and informed consent must be obtained from all affected clients before proceeding
• Ongoing Monitoring: Conflicts must be monitored continuously as new matters arise

3. Public Communication Standards

Any public description of an of counsel relationship must be truthful, accurate, and not misleading. Under California Rule of Professional Conduct 7.1, lawyers are prohibited from making false or misleading communications about themselves or their services.

This applies to all forms of public representation, including websites, printed materials, and professional listings. Here are some practical examples:

• Accurate Title Use: The of counsel designation should only be used when the relationship is genuinely close, personal, continuous, and regular as defined in California Formal Opinion 1993-129.
• Letterhead and Marketing: You may list an of counsel attorney on firm letterhead, website, and other materials, but only if the relationship meets the ethical standard. Avoid implying a partnership or shareholder status if that is not the case.
• Consistency Across Platforms: The same accurate description should appear on letterheads, website attorney profiles, legal directories, and attorney listings
• No Exaggeration or Puffery: Avoid any wording that could lead a reasonable person to believe you are a partner, associate, or shareholder of the affiliated firm.

By following these communication standards, attorneys can ensure your California of counsel agreement is both ethically compliant and accurately represented to the public.

What to Consider Before Entering an Of Counsel Attorney Agreement

Before finalizing any of counsel agreement, attorneys should consider the operational and ethical realities that extend beyond the formal requirements. Even when all ethical standards are met, the day-to-day management of these relationships requires diligence.

Shared Conflicts Pool Implications

As mentioned, when you serve as an of counsel attorney to another firm while also being a shareholder in your own law corporation, the California State Bar generally treats both entities as a single unit for conflicts purposes.

This interpretation is confirmed in Formal Opinion 1993-129 and applies the same conflict rules under Rule 1.7 to both entities—to your law corporation and to the law firm you have an attorney of counsel agreement with.

Multiple Affiliations and Administrative Complexity

Maintaining more than one of counsel agreement in California can increase both ethical risk and administrative workload. While the rules do not impose a numeric limit on of counsel affiliations, each relationship adds layers of complexity that must be proactively managed. 

Best Practices for Maintaining Compliance as Of Counsel Attorney and PLC Shareholder

Serving as both a shareholder in your own professional law corporation and an of counsel attorney to another firm comes with heightened ethical and operational responsibilities. Following best practices for your attorney of counsel agreement not only ensures compliance with California’s standards, but also protects client trust and the integrity of both firms.

Maintain Clear and Proper Documentation of the Relationship

It helps to create a written attorney of counsel agreement that outlines the scope of the relationship, frequency of interaction, compensation, and responsibilities. You can also include:

• Conflict checking and resolution procedures
• Client communication protocols
• Fee sharing arrangements (if any)
• Termination procedures and notice requirements

Confirm Of Counsel Relationship’s Eligibility and Structure

Remember that the guidelines for what counts as an “of counsel” relationship is specific: “close, personal, continuous, and regular.” So it’s highly important for you and the law firm you have an agreement with to confirm that you meet this threshold.

Set Up Shared Conflict and Ethics Review Protocols

If you’re serving in multiple firms, as in your own and where you’re an of counsel attorney, both having a robust and shared conflict-checking system helps a lot.

Given the complexity of dual arrangements, attorneys should consider:

• Annual ethics reviews with qualified counsel
• Regular updates to conflict checking systems
• Periodic client communications about relationship status
• Ongoing training for staff on ethical requirements

Frequently Asked Questions About Attorney Of Counsel Agreements 

What does it mean to be an “of counsel” attorney for a California law firm?

Of counsel in a law firm means an attorney who maintains a close, personal, continuous, and regular relationship with the firm, but is not a partner, associate, or employee. 

Can an attorney be of counsel to multiple law firms simultaneously?

Yes, California ethics rules do not impose a strict numerical limit to firms where you have an of counsel attorney relationship. As long as each relationship meets the “close, personal, continuous, and regular” standard set out in California State Bar Formal Opinion No. 1993-129, there should be no problem.

Do of counsel attorneys need malpractice insurance separate from their corporation?

Insurance requirements depend on the specific arrangement. Attorneys should verify coverage with both their corporate policy and the of counsel firm’s policy.

How should clients be informed about of counsel relationships?

Clear written communication about the attorney’s role, potential conflicts, and the nature of the professional relationship should be provided to all clients.

Can of counsel relationships be terminated at will?

Termination procedures should be clearly defined in the underlying agreement, considering ethical obligations to existing clients and proper notice requirements.

Take the Next Step Toward a Compliant, Collaborative Law Practice

For John, who wants the independence of running his own practice but still values the collaboration with another law office, an attorney of counsel agreement can be the best of both worlds.

John ultimately chose to move forward—with our help—confident in knowing how to stay compliant and fulfilling ethical duties. That means meeting the “close, personal, continuous, and regular” standard, maintaining airtight conflict-checking procedures, and making sure clients always understand your role in each firm.

You can do it, too! Contact Incorporation Attorney today to form your own professional law corporation and ensure you have strategic and compliant practice from the start.