Question for you – have you ever been asked to serve on a nonprofit board? I’m an attorney for nonprofit organizations, so I get hit up for board service A LOT. It’s an exciting and flattering thing to be asked to participate in the org’s mission.
Most of the time, though, my answer has to be no. There’s a couple of reasons for that.
For one, there are only 24 hours in the day. Being a nonprofit board member means that you have fiduciary duties to uphold, and you should only agree if you’re able to make time to be a good director.
The other reason is that nonprofits oftentimes ask you because they have certain expectations of a lawyer. Nonprofits seem to think all attorneys are well connected, flush with cash, and ready and willing to give free legal advice to the org. The best kind of board member, right?!
If this is the (spoken or unspoken) expectations for your board service, you’ll want to tread carefully – especially as a student or brand new attorney. As a lawyer, you have the responsibility to watch out for the ethical issues that come with wearing those two hats (director and lawyer).
The problem with wearing two hats
Let’s say you join the board, and you decide to work on a few things. Maybe you help draft a contract or a revision to their bylaws. You might be thinking, “Those are things board members do, right? I’m not acting as their attorney, I’m just being a good board member.”
Errr…maybe not.
For better or worse, the rule for determining the existence of an attorney-client relationship is simply whatever the client reasonably believed. Let’s be honest, do you think the board believes you’re their attorney? Have you given them advice that they’ve reasonably relied on? Yeah, sounds like you’re their lawyer. Be careful here if you’re still in school, this could be an oops UPL situation.
Trap #1: They ask you to perform heart surgery.
People sometimes think that all lawyers know everything about every single law on the books. Maybe they know that you focus on real estate or personal injury, but surely you’ll be able to help with whatever legal issue presents itself, right?
As an attorney you are required to provide competent representation. It doesn’t matter how smart and capable you are, sometimes you’re not competent to give the nonprofit the advice they need. Should a criminal defense attorney advise a nonprofit about IRS requirements and unrelated business income tax? Probably not! Would you schedule heart surgery with a brain surgeon? No way. Both are highly capable doctors, but you’d want the expert every time. The same goes for the nonprofit.
Your lawyer senses will tell you when something is legally fishy. But remember to protect yourself (and the charity) by recommending hiring outside counsel when the need arises.
Trap #2: You accidentally spill their secrets.
You’re aware of attorney-client privilege. Now, ask yourself, if you’re on a nonprofit board and also acting as their lawyer, when – exactly – does attorney-client privilege apply?
Of course, attorney-client privilege doesn’t apply if you’re only acting as a board member. But if you’re acting as attorney (intentionally or otherwise), then you have to keep confidentiality (unless you have informed consent or disclosure is “impliedly authorized”). You probably can work out when it applies – if the board discussion turns to lawyer advice, it applies.
The problem arises based on when your client thinks it applies. Suddenly you have to clarify whether you’re talking as a board member or an attorney at any given moment. Or what if the client introduces a third party into a conversation without realizing it destroys the privilege? I’ve also heard of nonprofits trying to claim all the meeting minutes were covered by privilege – um, no!
Trap #3: You have ALL the conflicts.
Let’s say you’re an estate planning attorney. The nonprofit has the “give, get, or get off” attitude about the board, so you have a fundraising goal. You don’t have a ton of money to donate, but you want to stay on as a director. What if you advise an estate planning client in your new law practice that they should leave a bequest to the nonprofit? Do you have a conflict? Or what if you offer discounted services to the program participants of the nonprofit? Do you have a conflict?
Whether a potential conflict looks like one of these or something totally different, you need to be prepared for them in your attorney/board member role.
All this to say: think before serving.
Board service is always a little risky for us. That’s why your malpractice insurance provider asks you to disclose any boards you sit on. But I’m not saying you shouldn’t ever serve as a nonprofit board member – the nonprofit sector still needs you. And you should absolutely participate in things that you’re passionate about.
So, how do you navigate board service if and when you decide to take it on? Due diligence.
Talk to the board members. What’s their expectation for board members in general and for you specifically? Do they have a giving requirement (and can you afford it)? Do they have legal needs they’re hoping you’ll help with? Think about whether you’re likely to have conflicts. This doesn’t have to be the way you build your resume. It’s okay to say no to things if needed, volunteer another way.
Ultimately, the best thing you can do is to draft a letter to the board. Describe your joint understanding of your role and the services you provide (or don’t provide) to the nonprofit. Will you be providing board service only, not legal representation? If you aren’t licensed yet this is your option. Or board service with occasional legal advice if it’s within your practice areas? Or something else? It’s a good idea to have them sign it too.
The important part is communicating it and making a record. You might be cringing at the thought of being so direct or so obnoxiously “lawyer-ish.” The letter can be gracious and kind, don’t worry! I’ve drafted a sample letter you can build from. Download it at www.birkenlaw.com/board-….
Update the letter annually to remind the board (including new members) of your role and its limits. And throughout the year when you’re at meetings remember to follow these tips:
- Keep the lines of communication open
- Be clear at board meetings when you are giving legal advice – or business advice
- Recommend hiring a competent attorney when you’re out of your area
- Review meeting minutes carefully to make sure the record is clear
Ethical matters and board service are tricky, yes. But don’t be discouraged. Giving back is good, pro bono work is good, civic engagement is good. Keep doing it, and just be smart. By taking the right steps you’ll be able to safely donate your time and talents to a cause you’re passionate about.
Join Jess Birken at ABA TECHSHOW on February 28 for a day of speed geeking, closed fishbowls, and PechaKucha presentations.
Read the original article here.
Jess Birken, Birken Law Office
Jess is a solopreneur lawyer who helps nonprofits solve problems so they can stop worrying and get back to their mission. When she’s not lawyering, she’s helping other lawyers change their lives and their law practices through her “Hack Your Practice” project.