Corporate Counsel's Unique Problems

Most attorneys in private practice have little appreciation of the complexity of the multi-faceted roles challenging in-house counsel. Providing advice in different areas of law, dealing with many personalities, focusing on the business interests of the client, and managing outside counsel are tasks which require not only outstanding legal ability but also outstanding experience and judgment.

A difficult dilemma arises when outside counsel commits malpractice. What should corporate counsel advise the client? Sophisticated counsel can place the client in a "no lose" position because of the unique holding of Saffer v. Willoughby, 143 N.J. 256 (1996), particularly at page 272. The holding in Saffer provides that your malpractice counsel's legal fee is ordinarily an element of your damages in a legal malpractice case. In other words, if you win, the lawyer's malpractice insurance company pays your legal bill. Additionally, Saffer holds that ordinarily an attorney who provides negligent services is not entitled to be compensated for those services. Under Saffer, you may recover legal fees already paid to your outside counsel in whole or in part.

We have observed that when outside counsel commits malpractice the offending firm is usually just stricken from the list of approved outside counsel. The holding of Saffer makes it imperative, at least here in New Jersey, that corporate counsel consider resorting to a legal malpractice claim in order to achieve a cost-effective remedy for the errors of outside counsel.