Non-profits often seek lawyers to serve on their boards. However, it is important to note that having a lawyer on your organization’s board is not the same thing as having a lawyer represent your organization.
Gene Takagi recently posted a piece on the Non-Profit Law Blog aimed at providing lawyers with guidance about serving on a non-profit board, but it is also a good resource to help non-profits understand the parameters of a lawyer’s board service. The lawyer may be faced with serving dual conflicting roles, one as a lawyer providing legal advice and the other as a director with a duty to govern an organization.
Perhaps the biggest consideration is attorney-client privilege. Don’t assume that any communication about the organization’s business is protected by privilege and be sure the lawyer is willing to represent the organization in that situation. It is one thing for a lawyer to review bylaws and help file registration paperwork with the state. It is another thing to deal with pending litigation.
Loss of Attorney-Client Privilege. Are you communications with the rest of the board protected by the attorney-client privilege? If it’s clear that the communications are to be attorney-client communications, they should be protected by the privilege. However, such protection may be lost if it’s not clear that you are communicating only as a lawyer or if the communication is recorded in minutes to which other persons have access.
Because of their dual role as a lawyer/director, they may find themselves serving on a board that is involved in litigation with a client represented by their firm. Again, they need to make a clear distinction what role they are serving in when they speak and potentially recuse or excuse themselves from conversations and decision making.
Takagi links to a number of other useful article on Blue Avocado , two from the American Bar Association, and Proskauer, another blog on legal considerations for Not For Profit Organizations.
Each provides additional cautions about the vague line between roles. For example, when the lawyer makes a suggestion about a change in the bylaws, are they suggesting it to strengthen the legal basis of the document or their personal preference for sentence structure?
The articles suggest that others may give undue deference to the opinions of a lawyer at the table based on the assumption they are the smartest person in the room or have the most expertise. In addition to the need to distinguish between personal and expert opinion, the articles urge that all parties be aware that a lawyer’s area of specialization may be inappropriate for providing advice in a matter at hand. The lawyer themselves may be unaware of the limitations of their knowledge.
There is also the “when all you have is a hammer, you treat everything as if it were a nail” factor. Blue Avocado notes that lawyers on the board may advocate for a legal solution rather than investigating other paths to resolution.
Non-profits also need to be aware that a lawyer who has been asked to serve on a board may request changes to the Directors & Officers insurance policy in order to ensure there is sufficient protection for their involvement with the organization.
Finally, there is the conflict of interest all board members potentially have–encouraging the organization to conduct business with their firm.
As you might imagine, a short post like this can’t address all the ramifications of having a lawyer serve as a board member. Takagi’s post and the additional resources to which he links are a good place to begin understanding the issues involved.
