Choosing association counsel

Hire for community association law experience, not just a law degree

A general practice attorney can be a fine lawyer and still be the wrong choice for a board. The business judgment rule protects a board's decision when it relies in good faith on a professional's advice, but that protection depends on the advice falling within the professional's actual competence, not just their license. An attorney who has never handled a covenant enforcement dispute, a reserve funding question, or a fair housing complaint is guessing in the same areas your board is.

"A director is entitled to rely on information, opinions, reports, or statements prepared or presented by legal counsel, accountants, or other professionals or experts."

Source: Understanding the Business Judgment Rule for Boards, Barker Martin, P.S.

At least one state, North Carolina, writes this reliance principle directly into its nonprofit corporation statute, letting a director rely on advice from counsel on matters reasonably believed to be within that counsel's professional competence. Whether your state's statute contains an equivalent provision, and how it is worded, varies. Ask your own attorney whether it applies here.

Put scope and fees in a signed engagement letter

Verbal agreements are hard to enforce and easy to misremember. A written engagement letter defines exactly what the attorney will do, what it costs, and who is responsible for what; it is what actually controls the relationship once work starts, not the conversation you had before signing anything. Ask for one before the first invoice, not after a disagreement makes you wish you had.

Ask specifically what fee structure applies (hourly, flat fee, or retainer) and what triggers charges beyond the base scope. Typical rates and fee structures vary widely by firm and region. Compare structures, not a single number someone tells you is normal.

Ask whether your state requires competitive bids for legal services

Some boards assume that getting three bids protects them on every contract, including legal counsel. That is not universally true. Florida's competitive bidding statute requires bids once a contract exceeds a set share of the annual budget, but the same statute separately exempts a list of retained professionals from that requirement.

"contracts with employees of the association, and contracts for attorney, accountant, architect, community association manager, timeshare management firm, engineering, and landscape architect services"

Source: Fla. Stat. Section 718.3026, Florida Legislature

Whether your own state has a competitive bidding statute at all, what triggers it, and which professions are exempted vary by state. Check your state's statute and your own bylaws before assuming a bidding process is required, or that it is not.

Confirm who on the board can actually sign

Even a well chosen attorney with a clean engagement letter does not help if the person who signed it never had authority to bind the association. That authority is set by your declaration, bylaws, and sometimes state statute, not by board custom or who happens to be at the meeting. Before signing anything, confirm who is authorized: the full board by vote, the president alone, or a threshold tied to the size of the contract. The specific authority and any dollar threshold vary by association and by state. Check your governing documents rather than assume.