One of the most significant, though often overlooked benefits of utilizing an association management company is the dramatic reduction in potential legal liability.

The leading source of lawsuits and other legal claims against associations is employee-related. A staggering 70 to 80 percent of all claims made against associations and association directors and officers are generated by employees. Court filings and the experience of association attorneys nationwide confirm these numbers.

Charges of discrimination are among the most common, but employment-related claims can emanate from any number of alleged wrongs. Federal and state statutes regarding unemployment compensation, workers' compensation, and overtime compensation also produce thousands of claims against employers annually. Further, while most attention is focused on federal employment laws, state and local laws can be even broader and more burdensome on employers. Here is a partial list of the types of claims that employees can bring:

• Age discrimination
• Race discrimination
• Sex discrimination
• Religious discrimination
• Disability discrimination
• Sexual orientation discrimination
• National origin discrimination
• Pregnancy discrimination
• Discrimination based on marital or parental status

• Whistle-blower discrimination
• Retaliation for complaining about discrimination
• Sexual harassment
• Defamation or wrongful discharge of employee accused of harassment
• Equal Pay Act violations
• Family and medical leave rules (federal and state)
• Failure to accommodate a disability
• Deficient summary plan description for pension plan
• Negligent hiring
• Violation of personnel manual
• Invasion of privacy (e.g., reviewing employee's e-mails or Internet use)

The good news is that management companies largely shield an association from employment-related liability by assuming 100 percent of the risk. This is because the individuals who staff the association are employees of the company, not the association. Retaining an association management company can eliminate as much as two-thirds of the potential claims against an association.