Understanding a Kovel Agreement

A Kovel agreement is an arrangement whereby a client engages counsel to provide legal services, and counsel, in turn, engages specialists, such as CPAs, to support its services to the client.

• The scope of services in a Kovel agreement generally states that the counsel is engaging the CPA to assist in providing legal services to the counsel’s client and will often specify the client and the matter at issue.
• A Kovel agreement should state that it is the counsel’s responsibility to direct the CPA’s services, and the CPA takes instruction from the counsel for all aspects of the engagement.
• A Kovel agreement typically states that the work papers created by the CPA firm belong to the attorney in order to maintain privilege. However, the CPA firm should be able to retain its own copies.
• As the CPA is working solely at the direction and supervision of counsel, counsel should be primarily responsible for liability and/or indemnity claims made by the client or third parties if the matter is not resolved to the client’s satisfaction.
• A Kovel agreement should identify the party responsible for the payment of the CPA’s fees, which, in most cases, is the client.
• A Kovel agreement may be signed by the client, in addition to counsel and the CPA, especially if the client is responsible for payment of the CPA’s fees.