What You Need to Know about Legal Process Outsourcing and Legal Ethics - ABA YLD 101 Practice Series

 

By Rebecca L. Ambrose

With clients becoming increasingly cost conscious, the amount of legal work being outsourced to offshore Legal Process Outsourcing ("LPO") providers is rising dramatically.  However, lawyers should be aware of their obligations under the Rules of Professional Conduct before taking advantage of these services. 

Duty of Competence:  Lawyers have a duty to provide their clients with competent representation regardless of whether they do the work themselves or outsource it.    

Duty to Supervise:  A lawyer outsourcing work to an offshore provider has a duty to make reasonable efforts to ensure that the conduct of both the LPO provider and the individuals working on the project comports with the lawyer's own professional obligations.  While difficult when sending work overseas, there are some steps a lawyer can take to help ensure compliance:

  • Due Diligence on the LPO Provider and the Country in which it is Located:
    • Research the ethics rules and disciplinary system in the country in which the provider is located. 
    • Research the laws of the country in which the provider is located, particularly those regarding the seizure of personal property and documents over claims of confidentiality.
    • Conduct a reference check on the provider.
    • Determine the provider's reliability and identify any processes it has in place to ensure compliance with ethics rules. 
    • Inquire into the provider's hiring practices.
    • If client confidential information will be provided, inquire into the security of the provider’s premises, computer systems and recycling and garbage procedures. 
    • Consider taking a trip to view the facilities in person.
  • Individuals Working on the Project
    • Conduct reference checks and investigate the background of the individuals who will be working on the project.
    • Interview the individuals who will be working on the project to assess their educational backgrounds. 
    • Ask to see redacted prior work product to ensure that the individuals’ skills are adequate to complete the project. 
    • Closely monitor the project.
    • Independently verify the work product.

  Duty of Confidentiality:  If the outsourced project requires the revelation of client confidential information, the client's informed consent should be obtained in advance.  Of course, lawyers have a duty to safeguard from disclosure any information relating to the representation of a client.  To help ensure compliance with this duty, a lawyer should:

  • Release only as much confidential information as is necessary for completion of the project. 
  • Make sure the individuals working on the project understand the lawyer's duty of confidentiality.
  • Have the LPO provider and/or the individuals working on the project sign a confidentiality agreement.
  • Find out whether the LPO provider is doing work for any adversaries on the same or a substantially related matter.  If so, consider choosing another provider. 

Conflicts of Interest:  It is not hard to imagine a scenario where an LPO provider has been retained to work on both sides of the same case.  To ensure no conflicts exist, a lawyer should:

  • Inquire with the provider regarding its conflict checking procedures and mechanisms for tracking employee workflow.
  • Ask the provider whether it is now performing or has ever performed any services for anyone that is adverse to the client.

Fees:  Absent an agreement with a client to the contrary, a lawyer may generally charge for only the actual cost of using an LPO provider plus any reasonable allocation of associated overhead costs.  Such costs will likely be minimal or nonexistent when legal work is offshored.  A lawyer may include a reasonable allocation for the cost of supervising the services if that cost is not already covered by legal fees. 

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