Outsourcing work at a law firm is done to be competitive, competent, efficient and smart about how the work is accomplished. There are ethical implications to hiring a lawyer, whether deemed of counsel, associated or a contract lawyer. There are also ethical implications to outsourcing other aspects of a law office’s work, such as accounting and bookkeeping, receptionist and information technology support, advertising and marketing and paralegal tasks.
In “The Ethics of Outsourcing Work: Ethical Boundaries and Realities of Outsourcing the Work of the Law Office,” Charity Anastasio discusses the Model Rules of Professional Conduct relevant to outsourcing, as well as practical steps for addressing ethical concerns. Anastasio is the director of Profession and Practice Advancement at the Maryland State Bar Association.
Every IT specialist, accountant or receptionist you hire must be informed of the ethics rules, and should be trained on the meaning of those rules. Have them sign a confidentiality agreement before they see client information and check references carefully, Anastasio advises.
When considering outsourcing for bookkeeping or accounting, determine which specific activities will be included, such as:
- Paying bills
- Sending bills
- Running reports
- Operating account reconciliation
- IOLTA reconciliation
Anastasio says the biggest concerns about outsourcing these services involve acts of fraud or theft, misunderstanding proper management of IOLTA accounts and costs. Model Rule 1.15 on Safekeeping Property states that “a lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.” Jurisdictions vary on IOLTA rules, and a lawyer must know them and ensure that staff knows them. Lawyers must recognize the ethical obligation to fully understand and manage trust accounts, even if another does the work.
Outsourcing information technology services could include such activities as updating software or hardware, recommending and installing antivirus and malware, monitoring device usage and compiling security reports. Many lawyers worry that information will not be kept confidential or that it will cost too much.
Applicable model rules here involve competence and confidentiality, specifically Rule 1.1, which states that “a lawyer shall provide competent representation to a client, which requires keeping abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.”
When hiring a marketing professional to build your website, make sure to be closely involved in strategy and choosing content. Anastasio says to write your own copy to avoid violating Model Rules 7.1, 7.4, 7.5, which involve communications about you or services offered by your firm.
When outsourcing intake or receptionist services such as answering the phones, performing initial conflicts checks, answering basic questions about the firm and setting appointments, keep in mind Model Rules 1.3 and 1.4, covering diligence, confidentiality and promptness. Not advisable, says Anastasio, is hiring the local gossip to answer phones in a small-town law office.
Hiring nonlawyer paralegals or legal researchers can help with case preparation, client management or discovery activities, but keep in mind Model Rule 1.6 by ensuring supervision of subordinates to avoid unauthorized practice of law.
When hiring lawyers to assist with legal strategy, investigation, discovery or meeting with clients, you must ensure their:
- Competence (Rule 1.1)
- Allocation of authority (Rule 1.2 [a])
- Communication with the client (Rule 1.4)
- Fee-sharing arrangement (Rule 1.5), including the share each lawyer will receive
Anastasio recommends that if you’re only seeking advice on a case, use hypotheticals and stay vague.
Key takeaways from this webinar include:
- Inform your client when you outsource work at the very beginning, in writing, and get their informed consent.
- Be sure that anyone responsible for conflicts checks understands the ethical responsibilities involved.
- Protect client confidences by training outsourced workers and having them sign confidentiality agreements.
- Avoid fee-splitting rule violations and structure the outsourcing relationship to maximize the benefit to the client.
- Know your own abilities and fill in your weak spots with others who have the required expertise and experience.