Outsourcing Legal Services 101: Model Rules Attorneys Need to Be Aware Of When Outsourcing

For decades, American businesses have realized significant economic advantages and efficiencies by outsourcing their work. Outsourcing is a trend whereby companies send time consuming work, typically overseas, to businesses who can complete the task at a fraction of the cost when compared to doing the work in-house. Businesses love the increased profit margins, consultants are recommending outsourcing as a business solution, yet law firms are struggling to integrate this opportunity into their overall business strategy. This struggle stems from attorneys being subject to austere professional rules, mandated either by their state legislature or by the highest court in their state. Rules of professional conduct govern both the public and private behavior of lawyers and those who violate these rules can be disciplined. One of the major concerns regarding outsourcing is the potential of violating professional rules leading to either private or public reprimand or suspension or disbarment. In 2008, however, the American Bar Association cleared the way for outsourcing in the legal industry, stating: “[a] lawyer may outsource legal or non-legal support services provided the lawyer remains ultimately responsible for rendering competent legal services to the client under Model Rule 1.1.”[1] In addition, during the past five years at least half a dozen Bar Association Ethics Committees, the Supreme Court of Ohio Board of Commissioners on Grievances and Discipline, and the American Bar Association Standing Committee on Ethics and Professional Responsibility have released opinions discussing the outsourcing of legal work.[2]

These advisory opinions have fleshed out most of the issues associated with sending work to a legal service provider,[3] focusing primarily on the following ethical mandates: (1) the duty to avoid aiding in the unauthorized practice of law; (2) the duty to supervise; (3) the duty to obtain client consent; (4) the duty to preserve client confidences; (5) the duty to check conflicts; and (6) the duty to bill appropriately. All of the opinions, however, have concluded that a lawyer in the US could outsource legal work and at the same time satisfy his or her ethical obligations.

Unauthorized Practice of Law (UPL) – The American Bar Association mandates that attorneys cannot engage in outsourcing when doing so would facilitate the unauthorized practice of law.[4]

• The reasoning behind the above model rule for UPL is that “limiting the practice of law to members of the bar protects the public against the rendition of legal services by unqualified persons.”[5]

• The key determining issue pertains to what is classified as the practice of law, and if an activity would otherwise be considered as the practice of law, what safeguards and procedures are in place, if any, to negate the possibility that the LPO employees are engaged in UPL.

• Each individual state’s Bar Association model rules are similar and all the Opinions conclude that outsourcing legal work overseas does not constitute aiding and abetting the unauthorized practice of law where the outsourcing lawyer enacts an appropriate degree of supervision.

• The necessity to supervise is analogous to the duty owed when delegating work to a paralegal. The necessity to supervise remains in place irrespective of the degree of seniority and level of experience of the researchers.

• The physical degree of separation inherent in outsourcing relationships may make the act of supervision somewhat more difficult from a practical perspective. Proactive steps that could be taken in terms of supervision include the review of communication between and among outsource provider, attorney, and client and the instigation of a defined protocol for quality checking of assignments.[6]

• The fear of endorsing the unauthorized practice of law should not discourage attorneys from offloading legal research tasks as it can easily be avoided by supervising and reviewing the work-product of a legal service provider. “Ensure that the outsourcing company assists a California Attorney in practicing law, NOT the other way around.”[7]

Look for updates to this article for detailed descriptions regarding attorney competence, attorney-client communication, confidentiality between attorney and client, and conflicts of interest.

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[1]ABA Comm on Ethics & Prof’l Responsibility, Formal Op. 08-451 (2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services), available at http://www.aapipara.org/File/Main%20Page/ABA%20Outsourcing%20Opinion.pdf

[2] The Association of the Bar of the City of New York Commission on Professional & Judicial Ethics, Formal Opinion 2006-3 (2006); Los Angeles County Bar Association, Opinion 518 (2006); North Carolina State Bar, Formal Ethics Opinion 12 (2007); San Diego County Bar Association Legal Ethics Opinion 2007-1 (2007); Florida Bar Opinion 07-2 (2008); ABA Committee on Ethics and Professional Responsibility Formal Opinion 08-451 (2008).

[3] Prof’l Ethics of Fla. Bar, Formal Op. 88-6 (1988).

[4] Model Rules of Prof’l Conduct R. 5.5, Unauthorized Practice of Law (1983) (“When lawyers outsource work to lawyers and non-lawyers, it is important to ensure that those lawyers and non-lawyers are not engaging in the unauthorized practice of law.”); See also Florida Op. 07-2; Florida Op. 73041 and 68-49 (approving the employment of law school graduates who are not admitted to the Florida Bar only for work that does not constitute the practice of law.)

[5] Darya Pollak, I’m Calling My Lawyer . . . in India!: Ethical Issues in International Legal Outsourcing, UCLA Journal of International Law and Foreign Affairs I I UCLA J. Int’l L. & Foreign Aff. 99 (2006). See also Florida Bar v. Moses, 380 So, 2d 412, 417 (Fla. 1980) (the “single most important concern when the Courts are defining and regulating the practice of law is the protection of the public from incompetent, unethical, or irresponsible representation.”)

[6] See also Florida Op. 07-2; Florida Op. 73041 and 68-49 (The Florida Bar committee is not authorized to make the determination whether proposed activities constitute the unlicensed practice of law; however, the hiring attorney has the obligation to determine whether activities (legal work) being undertaken or assigned to others might violate any applicable rule of law.)

[7] Offshore Legal Outsourcing: the Ethical Implications. (LawScribe MCLE Course handout) Glendale, CA: LawScribe, Inc, 2007.

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