Could a lawyer owning over 5% of a corporate client prospectively limit negligence liability if it had independent counsel?
Apply this to your situation
This page answers the general question as of 1994. Ask about yours and see what the current Missouri Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
A lawyer held a minority stake of more than five percent in a corporation. The lawyer asked whether a contract could prospectively limit liability for negligence if the corporation had independent counsel.
The opinion answered no, saying Rule 4-1.8(h) prohibited the proposed agreement. It did not explain whether the share percentage affected the result.
Currency note
This 1994 opinion predates Missouri's 2007 amendments to its Rules of Professional Conduct. An official reference note identifies July 1, 2007 amendments to Rules 4-1.9 and 4-1.10. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context and verify current rules before relying on it.
Common questions
Q: Did independent counsel make the agreement permissible?
A: No. The opinion said the proposed contract was prohibited by Rule 4-1.8(h).
Q: What liability would have been limited?
A: The lawyer's prospective liability for negligence.
Background and rules framework
The opinion applied Missouri Rule 4-1.8(h) to a proposed prospective negligence-liability limit involving a corporation in which the lawyer held a minority share.
Citations and references
Rules of Professional Conduct:
- Missouri Rule 4-1.8(h)
See also
- VSB Op. 877: Corporate employer indemnity and limiting malpractice liability
- MEBAR Op. 9: Limiting liability
Source
- Landing page: https://mo-legal-ethics.org/informal-opinion/940112/
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
QUESTION: Attorney is a minority shareholder in a corporation but owns more than five percent (5%) of the stock. May Attorney enter into a contract with the corporation prospectively limiting Attorney´s liability for negligence if the corporation is represented by independent counsel? ANSWER: No, this would be prohibited by Rule 4–1.8(h).
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