Legal Outsourcing Gets Green Light from ABA

"U.S. lawyers are free to outsource legal work, including to lawyers or nonlawyers outside the country, if they adhere to ethics rules requiring competence, supervision, protection of confidential information, reasonable fees and not assisting unauthorized practice of law."

Those are the conclusions of the American Bar Association Standing Committee on Ethics and Professional Responsibility. Ethics Opinion 08-451 details obligations of lawyers and firms that outsource. According to their press release: "Outsourcing can reduce client costs and enable small firms to provide labor intensive services such as large, discovery intense litigation, even though the firms might not maintain sufficient ongoing staff to handle the work"

Minimum Standards

Outsourcing lawyers should conduct reference checks and background investigations of lawyer or nonlawyer service providers and any intermediaries. They may also wish to interview principal lawyers on a project, assessing their educational background, and evaluate the quality and character of any employees likely to access client information, review security systems, and even visit the premises of the service provider.

Outsourcing to Foreign Countries

The outsourcing lawyer should determine if the legal education system in that country is similar to the U.S. and if regulatory systems "incorporate equivalent core ethics principles and effective disciplinary enforcement systems." The attorney should also determine if the foreign legal system protects client confidentiality and provides effective remedies to the client if disputes arise.

Client Consent

Depending on the level of supervision, it might be necessary to obtain informed client consent. Informed consent also may be required to reveal confidential information. Written confidentiality agreements are “strongly advisable.”

Fees

Outsourcing lawyers may pass along to the client the costs of using the service provider, including a reasonable overhead, but “no markup is permitted.”


The full opinion is available at http://www.abanet.org/cpr.