The Case For and Against
Two Professionals Outline the Benefits and Disadvantages of Staff Counsel
By Brian Kerns and Patricia Kirschling
THE PROS OF USING STAFF COUNSEL
Brian Kerns, Esq., is an attorney with the law firm Wiles,
Boyle, Burkholder & Bringardner Co., L.P.A.
The use of salaried employees to serve as liti- gation staff counsel started several decades ago and has grown in the property and casu- alty insurance industry over the past 20 years. The role of staff trial attorneys is generally to
defend the insured individuals or business in litigation or to
represent the insurance company in litigated coverage matters or suits against the insurance company.
eters for use of salaried staff counsel.) The exception here
is the state of Kentucky. Most other jurisdictions have concluded that the relationship of staff counsel to the insured is
no different than any other potential conflict of interest situation, including that of private/panel counsel. Therefore, the
courts have held that a potential for conflict does not mean
that the lawyer must, in all cases, avoid the representation.
Over the years there has been much debate and discussion
about the propriety of using salaried employees to represent third-party insureds. The arguments raised against this
practice usually cite two reasons why the use of staff counsel
should be prohibited. One common complaint is that using
staff counsel constitutes the unauthorized practice of law.
Most states have rejected these arguments and have ruled
that the use of staff counsel is not the unauthorized practice
of law. (North Carolina is the notable exception.)
Fundamental to the use of staff counsel is that the client
(insured) be fully informed of the representation. Ohio
may be at the foremost edge of such mandatory disclosure,
requiring that within 10 days of the assignment of suit, the
staff counsel attorney must send the insured a written disclosure form, outlining the representation and a “Statement
of Insured Clients Rights.” Failure to provide this to an
insured is an ethics violation subject to sanctions.
The other common challenge is based upon ethical grounds.
This argument is essentially that the payment of captive
counsel creates an inherent, irreconcilable conflict of inter-
est for the attorney. There has been a great deal of litigation
regarding these issues since the early 1990s, with virtually all
tribunals finding that the use of staff counsel is ethically per-
missible. (Notably, The American Bar Association issued a
Formal Ethics opinion in 2003 outlining the ethical param-
Today there are thousands of attorneys serving as staff coun-
sel across the United States. Numerous companies have
established offices in major urban centers where the volume
of litigation and logistics make the use of staff counsel more
cost-effective. These offices commonly handle volume, gen-
eral tort litigation.
Given the longevity and growth of staff counsel, many insurers no doubt still grasp the benefits of employing staff counsel.
As one claim litigation manager dealing with volume litigation has written, “The use of house counsel is critical to our
claim and suit handling services ... We assign the vast majority
of suits to house counsel due to their significant expertise and