Good Counsel for Boards
Functions of Independent Counsel
Corporate independent counsel may serve as counsel of special committees empowered by statute or corporate bylaws to investigate and determine the merit of derivative claims asserted by shareholders in the company's name.
Corporate independent counsel has been regularly employed to represent independent directors of public companies where transactions involving management (e.g., leveraged buyouts) are contemplated or in merger and acquisition transactions where management's interest may be different from that of the corporation.
Corporate independent counsel has been routinely engaged to deal with legal issues for the corporation or its board when the office of the general counsel may be conflicted by relationships to, or involvement in, corporate activities that have been called into question. For example, corporate general counsel increasingly takes on nonlegal duties in management or corporate administration. Wearing these multiple hats can create a need or preference for advice to the board from outside counsel who is independent and without other entanglements that might affect or appear to affect independent judgment. Independent counsel also should be considered when a merger or acquisition triggers a change in control. Under these circumstances, senior management, including the general counsel, may have accelerated financial benefits (e.g., stock options) that create a substantial financial interest in the outcome of the transaction.