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Report on 2019 Survey of Law Firm Opinion Practices

Sterling S Willis

Summary

  • Responses to the survey suggest a trend toward greater formality in the opinion practices of small firms.
  • Almost all firms have procedures for providing opinion letters.
  • Most firms required or expected opinion preparers to consult with or obtain approval from a consulted lawyer before delivering an opinion letter.
Report on 2019 Survey of Law Firm Opinion Practices
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In the recently published Fall of 2022 edition of The Business Lawyer, the Legal Opinions Committee of the ABA Business Law Section issued a report on the 2019 survey of law firm opinion practices. The report follows prior reports of the committee from 2002 and 2010. Firms responded to the 2019 survey ranged from small firms to very large and were geographically diverse. The report contains detailed listings of the survey questions and responses. The Report summarized its findings as follows:

“Responses to the [2019] survey suggest a trend toward greater formality in the opinion practices of small firms, a trend has been bringing the opinion practices of small firms into closer alignment with those of large firms. Responses also suggest that many firms of comparable size have similar opinion practices. Responses, however, portray a broad range of practices and should not be used as a basis for establishing standards, customary practice, or even best practices for opinion giving. The responses make clear that one-size-fits-all does not come close to describing opinion practices, either generally or with regard to specific matters, followed by law firms even of comparable size or location.”

The following are some of the important conclusions set forth in the report:

  • Most firms have policies on whether to give particular opinions and on the content or wording of opinion letters or particular opinions. Almost all firms have procedures for providing opinion letters.
  • Most firms had at least one opinion committee. Since 2010, the proportion of small firms with opinion committees increased substantially.
  • In most firms, opinion committees or their members reviewed, cleared or approved at least some opinion letters. This was particularly true for small firms.
  • Most opinion committees, including almost all opinion committees in large firms, prepared or approved opinion policies and procedures for all firm practice groups and offices, in many cases consulting with or obtaining approval of others in the firm.
  • Most opinion committees prepared or approved sample opinions, opinion letters, supporting documentation, or other materials.

Most firms required or expected opinion preparers to consult with or obtain approval from a consulted lawyer before delivering an opinion letter.

  • The lawyers eligible to serve as consulted lawyers were almost always partners and usually were members of an opinion committee. Typically, the opinion preparers could select the consulted lawyer from among those eligible.
  • Responsibilities of consulted lawyers were primarily to identify issues raised by an opinion letter and to serve as a resource for opinion preparers.
  • Most firms did not memorialize the consultation.
  • Most firms made available to their lawyers one or more sample opinion letters or opinions. Although typically permitting exceptions, about half required or expected use of the samples as a starting point in the preparation of opinion letters, a substantial increase since 2010.
  • Almost all non-Delaware firms gave routine opinions on the status, power, and authority of Delaware corporations and limited liability companies, and most gave them on Delaware limited partnerships. Most non-Delaware firms also gave opinions on the issuance of equity interest by those Delaware entities. About one half of non-Delaware firms gave opinions on the limited liability of members of Delaware limited liability companies and limited partners of limited partnerships. More large firms gave those opinions than small firms.
  • Few firms without an office in a state gave opinions on that state’s entity law (other than Delaware’s) or that state’s contract law.
  • Most firms gave opinions without consulting local counsel on Article 9 of the UCC of a state or states in which they did not have an office. About one-half also gave those opinions without consulting local counsel on Article 8 of the UCC.
  • Most firms gave no-litigation confirmations, but many resisted giving them and when they gave them they limited their scope.
  • In giving no breach or default opinions, most firms expressly covered only agreements indemnified in a list and did not regularly cover financial covenants in those agreements. Most firms did not give enforceability opinions concerning arbitration clauses in agreements in domestic U.S. transactions.

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