Legal Definitions - captive law firm

A captive law firm is a type of law firm that is staffed by employees of an insurance company. These lawyers typically defend insureds in lawsuits covered under the insurer's liability policies. The insurer's use of a captive firm to defend an insured raises ethical questions about whether the lawyers will act in the insured's best interests.

For example, if an insurance company has a captive law firm, and one of their policyholders is sued, the captive law firm will defend the policyholder in court. However, because the captive law firm is employed by the insurance company, there may be a conflict of interest. The captive law firm may be more concerned with protecting the interests of the insurance company than with protecting the interests of the policyholder.

Another example of a captive law firm is a law firm that is owned and operated by a corporation. In this case, the law firm is not independent, but rather is controlled by the corporation. This can also raise ethical questions about whether the lawyers will act in the best interests of their clients or in the best interests of the corporation.

These examples illustrate how a captive law firm can create conflicts of interest and raise ethical questions about the loyalty of the lawyers to their clients.