Georgia Rule of Professional Conduct 1.8(h) prohibits a lawyer from making “an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement….”
The purpose of the rule seeks to protect clients by preventing lawyers from using their position to take advantage of clients and remove any negative consequences for their malpractice.
So does this rule prohibit “hold harmless” agreements between in-house counsel and their employers?
According to Georgia Formal Advisory Opinion No. 05-2, such “hold harmless” agreements are ethical when three criteria are met when:
- the employer makes an informed business judgment that such an agreement is preferable to malpractice insurance;
- the agreement is done on advice of counsel; and
- the agreement is permitted by law.
Opinion No. 05-2 states that consultation with in-house counsel is sufficient under Rule 1.8(h) for two reasons. First, the superior position of the client as the employer and the typical sophistication of such an employer eliminates most concerns. Second, because the in-house counsel, as an employee, is subject to discharge by the employer, she does not avoid the negative consequences of malpractice.