Question from Attorney:
I am contemplating merging my practice into another firm and becoming "of counsel" to that firm. I may have a legal matter or two that is not included in the merger, and I will be retaining the existence of my current LLC
My question is this: can I maintain legal malpractice insurance that covers me for both the legal matters that are merged with the other firm, and the legal matters that are not merged? How can we make this work?
Response to Attorney:
Your work for the merged firm needs to be covered by that firm’s insurance policy. Even if you continue to maintain separate coverage for your LLC, it will not provide coverage for the work done for the new firm. If the merged firm is also going to cover your current firm’s past acts it would be a good idea to get your current LLC added as a predecessor firm (this can be done either by endorsement or sometimes in the policy language of the merged firm’s policy.)
If you are continuing to practice some law under a separate LLC, you likely can continue to maintain your Wesco policy. With a reduced number of hours being worked it should reduce the Wesco policy’s cost at renewal.
The following is the pertinent section on your current Wesco policy:
G. “Insured” means the Named Insured, predecessor firm and the persons or entities described below:
1. Any lawyer, partnership, professional corporation, professional association, limited liability corporation or limited liability partnership who is or becomes a partner, officer, director, stockholder- employee, associate, manager, member or salaried employee of the Named Insured during the policy period shown in the Declarations;
2. Any lawyer previously affiliated with the Named Insured or a predecessor firm as a partner, officer, director, stockholder-employee, associate, manager, member or salaried employee but only for legal services performed on behalf of the Named Insured or a predecessor firm at the time of such affiliation;
3. Any lawyer, law firm, partnership, professional corporation, professional association, limited liability corporation or limited liability partnership who acts as Of Counsel to the Named Insured or any non-employee independent contractor attorney or per diem attorney to the Named Insured but only for legal services performed on behalf of the Named Insured;
Although the wording will be different, the merged law firm’s malpractice policy will have similar definitions.
Note: The above response is to a specific situation. Always check your policy and check with you malpractice insurance agent about the malpractice insurance ramifications of merging your firm or selling your firm.