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ABA Ethics Opinion Guides Lawyers in Outsourcing

By Lisa R. Bliss, Litigation News Associate Editor – November 5, 2008

In a nod to the global economy, a recent ABA ethics committee opinion [PDF] affirms that lawyers may ethically outsource legal work to lawyers and nonlawyers in the United States and abroad, but they remain ultimately responsible for rendering competent services within the bounds of professional conduct.

The ABA Standing Committee on Ethics and Professional Responsibility acknowledged that U.S. lawyers frequently hire others to perform support services, and that foreign outsourcing reduces labor costs. The challenge for the outsourcing lawyer is ensuring that tasks are performed competently and with adequate oversight, especially when referring work to remote locations in different time zones, the committee notes.

While not binding, the opinion helps identify ethical considerations for foreign outsourcing, says Michele D. Hangley, Philadelphia, cochair of the Section of Litigation’s Ethics and Professionalism Committee. Attorneys thinking about outsourcing “need to look at their own jurisdiction and the rules of professional conduct that apply,” says Hangley.

A handful of state or local bar ethics committees across the country have issued opinions approving the practice, including the City of New York, San Diego County [PDF], Los Angeles County [PDF], the Florida Bar, and the North Carolina State Bar. Where a state bar has not directly addressed the issue, Hangley recommends lawyers in that jurisdiction study the ABA opinion carefully. She notes, however, that the ABA opinion does not give clear-cut guidance on all potential issues.

The opinion delineates the outsourcing lawyer’s ethical duties when referring work. For example, outsourcing lawyers remain subject to existing rules of professional conduct in their position as lawyers with “direct supervisory authority” over others and with respect to client confidentiality. The referring lawyer may need to obtain informed consent of the client and must safeguard against the risk of disclosure of confidential client information. Fees charged to the client must be reasonable, and markup may not be permitted.

The committee suggests that lawyers outsourcing services should consider checking references and the educational background of service providers. Where sensitive client information is involved, the lawyer should also consider investigating computer-network and premises security, and perhaps even recycling and disposal procedures. A visit to the provider’s facility, regardless of the difficulty of traveling to that location, may be prudent.

Although the opinion approves foreign outsourcing, it may also favor stateside service providers. “The due diligence requirement ups the ante on using foreign outsourcing,” says Paul M. Koning, Dallas, cochair of the Section’s Professional Liability Litigation Committee.

“The suggestion that lawyers may have to travel to India to investigate the security of the provider’s premises or the professionalism of the foreign lawyers could certainly have a chilling effect,” says Koning.

On the other hand, the opinion may serve as a road map for overseas service providers to get some form of certification or to prepare a brochure showing their facility and explaining their security measures, notes Koning.

Lawyers must weigh the risks and burdens of foreign outsourcing against the cost savings. “I’m not sure that outsourcing is a magic bullet to cut costs as much as people think because the lawyer who outsources still has to do a lot of work to make sure that the lawyer abroad did everything correctly,” explains Hangley.

The ABA opinion identifies types of work where outsourcing could reduce costs or extend the service capacity of a small firm that does not have sufficient staff to handle a large project. Given the low hourly rates for services abroad, a case involving intensive document review or coding “might be a good candidate for outsourcing,” says Hangley.

Lawyers in the United States as well as those offering contract services abroad have shown interest in the ABA opinion. “Among other potential approaches, the International Litigation Committee is looking into establishing a working committee to see if there is feasibility of suggesting a uniform rule or statute on the topic,” according to Steven M. Richman, Princeton, NJ, cochair of the Section of International Law’s International Litigation Committee.

  • September 28, 2010 – Yeah, outsourcing the legal works are not easy, but it will help to make the law known to all. It is really a big responsibility to the ethics committee to outsource the professionalism of all lawyers who are planing to outsource the law. One the important aspects are the conduct and ethics of this professionals who delegated the works.


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