American Bar Association

Context

To date, a number of organizations have released formal statements or opinions that address the ethical implications of outsourcing legal services. The most widely referenced ethics opinion to date is Formal Opinion 08-451 Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services, issued by the American Bar Association Standing Committee on Ethics and Professional Responsibility on August 5, 2008. This opinion addresses the ethical obligations of lawyers in hiring vendors outside the firm to provide legal and nonlegal support services. It links the practice of outsourcing to the existing ABA Model Rules of Professional Conduct and provides further guidance in circumstances that the ABA Standing Committee on Ethics and Professional Responsibility deemed were not appropriately covered under the existing Model Rules.

Despite the guidance provided by Opinion 08-451 and other ethical guidelines, these guidelines remain subject to the interpretation of the outsourcing lawyer based on each unique outsourcing arrangement.

The following paragraphs represent an exclusively informational summary of the issues addressed in the complete Opinion, which can be found in full here. Readers should assess the ethical implications of their legal outsourcing arrangement through reviewing all applicable ethical guidelines and consulting with a jurisdictionally qualified legal professional.

Issues

The ABA Standing Committee on Ethics and Professional Responsibility addresses the following issues in Opinion 08-451.

Protecting confidential client information
Ensuring competence of the personnel providing the legal and nonlegal support services
Disclosing relationships with outside vendors to clients
Charging reasonable fees for the services provided by outside vendors
Avoiding the aiding and abetting of the unauthorized practice of law

Summary

A lawyer may outsource legal or nonlegal support services provided the lawyer remains ultimately responsible for rendering competent legal services to the client under Model Rule 1.1. In complying with her Rule 1.1 obligations, a lawyer who engages lawyers or nonlawyers to provide outsourced legal or nonlegal services is required to comply with Rules 5.1 and 5.3. She should make reasonable efforts to ensure that the conduct of the lawyers or nonlawyers to whom tasks are outsourced is compatible with her own professional obligations as a lawyer with “direct supervisory authority” over them.

In addition, appropriate disclosures should be made to the client regarding the use of lawyers or nonlawyers outside of the lawyer’s firm, and client consent should be obtained if those lawyers or nonlawyers will be receiving information protected by Rule 1.6. The fees charged must be reasonable and otherwise in compliance with Rule 1.5, and the outsourcing lawyer must avoid assisting the unauthorized practice of law under Rule 5.5.

- Executive Summary Excerpt From Formal Opinion 08-451

The Formal Opinion 08-451 Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services states that, “The outsourcing trend is a salutary one for our globalized economy.” Based on this premise, the ABA Standing Committee on Ethics and Professional Responsibility states in the 08-451 Opinion that, “[t]here is nothing unethical about a lawyer outsourcing legal and nonlegal services, provided the outsourcing lawyer renders legal services to the client with the ‘legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation,’ as required by Rule 1.1.”

The specific approach to addressing ethical issues surrounding legal outsourcing is left to the interpretation of the outsourcing legal professional. The Opinion notes, “There is no unique blueprint for the provision of competent legal services.” Further, “Others may decide to outsource tasks to independent service providers that are not within their direct control. Rule 1.1 does not require that tasks be accomplished in any special way. The rule requires only that the lawyer who is responsible to the client satisfies her obligation to render legal services competently.”

Noting the unique attributes of outsourcing to overseas destinations, the Opinion provides broader guidance on ensuring the competency of outside vendors through measures such as reference checks, personal interviews, reviewing vendor hiring practices, assessing the security of the vendor premises and refuse processes, and onsite assessment of the vendor. To ensure the competency of offshore vendors, the Opinion also recommends that legal professionals review the judicial system of the offshore geography and the legal education of the vendor’s employees.

The Opinion also outlines policies which dictate whether the outsourcing lawyer is required to disclose the outsourcing relationship to his or her client and notes that it is, in part, a function of supervision, oversight and directness of association with the outside vendor.

Finally, the Opinion also discusses avoiding inadvertent or advertent disclosure of confidential information, avoiding conflicts of interest, the reasonableness of fees, the responsibility and liability of the outsourcing lawyer and the avoidance of the unauthorized practice of law according to the Model Rule 5.5, Unauthorized Practice Of Law; Multijurisdictional Practice Of Law.

Referenced Material

The 08-451 Formal Opinion references a number of existing bodies of ethical guidance. The Opinion draws most heavily from the ABA Model Rules of Professional Conduct as well as several past Opinions.

Model Rules of Professional Conduct

ABA Formal Opinions

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