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Independent Counsel

Independent directors are not required to have their own legal counsel, but, if they do, that counsel must be independent under SEC rules. Generally, the law firm representing the independent directors is itself “independent” if neither the law firm nor the individuals representing the independent directors have a significant relationship with the fund’s adviser or its affiliates. If fund counsel does not do significant work for the adviser or its affiliates, fund counsel may (and often does) act as counsel to the independent directors. Independent counsel’s role is to work closely with the independent directors, advising them in the context of most decisions in view of their unique role as independent fiduciaries who ensure that the fund is run solely for the benefit of its shareholders.


More than 90 percent of fund complexes report that separate legal counsel serve their independent directors.