Imagine you’re a 20-something junior associate on the Habitrail at a big law firm. You’re supposed to feel lucky you’ve got a job at all, yet the hours are killing you. Your college roommate, always the free-spirited one, has just joined a new modern dance company and invites you to its upcoming benefit. You spring for two tickets at $40 apiece. You find your way down to the hovel/dance studio in a downtown neighborhood you rarely get to see. The choreography is beautiful, the people are friendly, and your $80 makes you the company’s largest donor to date.
Voilá, you’ve just been asked to join their board of directors—and be their outside pro bono general counsel!
This is not fiction. This was me, a few years out of law school. My decision to say yes set me on a pathway toward my dream job, as general counsel of Lincoln Center for the Performing Arts.
I learned a lot from working on the legal and governance matters of the fledgling dance company. With the supervision of a partner at my firm, I helped the company get legally-mandated worker’s comp and disability insurance. When it got its big break—to perform at a major dance venue uptown—I helped it clear the rights to the music underlying its choreography. As a director, I attended board meetings, recorded minutes, helped inform important decisions about the mission and future of the organization, and sent out invitations to my friends to attend their next benefit and otherwise support the company.
Later on, I was asked to serve as outside pro bono general counsel and director of a larger and more sophisticated nonprofit, which advocated for quality child care on behalf of working parents nationwide.
Serving on these nonprofit boards was flattering, prestigious, and invaluable for my professional development. It was also a great remedy for lawyerly ennui and isolation. In few other settings could I have so quickly become a trusted and valued team member. Unlike the rest of the world, nonprofit boards love lawyers. They are looking for free legal expertise and perspectives, stature, good judgment, negotiating skills, and, of course, financial contributions and introductions.
However, many nonprofits, particularly smaller or less-sophisticated ones, may erroneously believe that having a lawyer on the board is the same thing as having a lawyer. They may not recognize that the establishment of an attorney-client relationship is a formal matter, with an engagement letter (legally required in some states) and stated professional understandings as to the scope of the representation, fees/fee waivers, and expenses. For our part, lawyers may not be in a position to deliver legal services to the client for any number of reasons: core competency, time and availability, conflict of interest, or lack of malpractice insurance.
If you do decide to represent an organization as well as serve on its board, be mindful of the following:
· Be clear about your role , scope and terms of the attorney/client relationship.
· Avoid private inurement. Don’t go in expecting to generate billable work from a nonprofit client on whose board you sit. Pro bono is the best way to avoid the issue–do your business development indirectly or elsewhere–but if your legal services must be fee-bearing, be sure to follow the organization’s conflict-of-interest policies and, once the relationship is cleared, follow the rules for continuing disclosure.
· Inform the board when you switch the director hat for the lawyer hat. The privilege can be waived, and those communications can become discoverable in litigation, if formalities are not observed.
· Watch out for conflicts of interest. This is particularly true if you are asked to give a legal opinion on board actions in which you participated. If the organization becomes party to a litigation, you may be unable to try the case on behalf of the client if you are also a witness.
· Check liability coverage first. Some legal malpractice insurers will not cover either the lawyer or her firm if one of its lawyers serves on the board of the client. Other policies will provide coverage only where the lawyer was acting as a lawyer but not as a director. The organization may have directors’ and officers’ liability insurance, but this coverage may not apply when you’re providing legal advice.
Take precautions, then embrace the chance to lead, serve, and grow through nonprofit board service. Your better self awaits.
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