New York City Bar Ethics Opinion Permits Legal Services Outsourcing

by Adam Ketcher


In August 2006, the Committee on Professional and Judicial Ethics of the Association of the Bar of the City of New York ("the Committee") published a Formal Opinion that stated attorneys could ethically contract out legal support services abroad, both to foreign lawyers not admitted to practice in any U.S. jurisdiction and to laypersons ("non-lawyers"), without violating the New York Code of Professional Responsibility's ("the Code") prohibition against aiding in the unauthorized practice of law pursuant to Disciplinary Rule ("DR") 3-101(A). N.Y. City Bar Op. 2006-3.[1] The Committee qualified this pronouncement by requiring that New York lawyers take into account certain ethical considerations before contracting out any legal work; specifically, the Committee stated that lawyers must (a) provide vigorous supervision to ensure competent representation and to avoid aiding in the unauthorized practice of law; (b) preserve client confidences and secrets; (c) inquire into possible conflicts of interest; (d) bill clients appropriately; and (e) obtain the necessary client advance consent.

As the business of legal outsourcing has developed into an $80 million market, with estimates of nearly 80,000 U.S. legal jobs expected to move overseas by 2015 - particularly to India where English common law is the foundation of a legal system that uses English as the official language - legal ethicists, scholars and practitioners have spoken out strongly both in favor and against the practice of legal outsourcing to non-lawyers abroad.[2] During the year leading up to this opinion, several articles and online legal forums have presented vastly contrasting views as to the benefits and risks of legal outsourcing. Those in favor highlight its cost effectiveness and the increased efficiency gained by time zone differentials. Those opposed present privacy concerns and question the quality of work product of individuals trained in foreign jurisdictions, even going so far as to characterize legal process outsourcing as per se malpractice.[3] The Committee found the former arguments to be more persuasive, and noted their consideration in the Code. [4]

The Committee opined that "[because] the Code holds the attorney accountable," the ambit of tasks an attorney may delegate to non-lawyers should be commensurate with the degree of supervision that attorney provides over the work of the non-lawyers. [5] As explained by the Committee, Disciplinary Rule 1-104(C) calls for a degree of supervision that is reasonable under the circumstances. In the context of legal process outsourcing, the Committee interpreted the reasonable standard to require "vigilant and creative" supervision that bridges the physical separation between New York lawyers and those employed by them overseas, and offered a brief list of "salutary steps" a New York attorney should consider to undertake before he or she employs non-lawyers abroad. The list included reference checking for both the intermediary and the non-lawyer employed through the intermediary, interviewing the non-lawyer to screen out those unsuitable for particular assignments, and continued communication as assignments progress to ensure quality work product.

As stated above, another consideration the Committee noted as of paramount importance when outsourcing is the preservation of clients' confidences and secrets in accordance with DR 4-101. Initially, the Committee said, a New York lawyer should check for conflicts of interest between the interests of his or her client, any intermediary used and the non-lawyers he or she intends to hire for the work. Furthermore, a New York lawyer should obtain a client's informed consent before delegating any work abroad, which the Committee later clarified as involving full disclosure to the client if a discerning client would believe that the non-lawyer's work would affect strategic decisions of the case rather than relate to mere tangential matters. In other words, a New York lawyer must keep client expectations in mind when deciding whether to outsource work. Also, a New York lawyer must inform himself or herself as to the different laws and traditions of the country where the work is to be outsourced, with regard to the protection of privileged information, and utilize adequate safeguards such as using hypotheticals, issuing periodic reminders and including contractual provisions that address confidentiality issues. Finally, the Committee defined "appropriate billing" as "no more than the direct cost associated with outsourcing, plus a reasonable allocation of overhead expenses."

The Committee's opinion recognizes the trend toward legal process outsourcing as one that benefits both law firms and their clients. As with any ethics opinion, this opinion too provides some flexibility for New York lawyers with regard to how they conduct their practices. Nevertheless, the opinion is a strong reminder that lawyers who outsource their work remain accountable to client expectations. Thus, professional ethics require that lawyers provide close supervision over the work of intermediaries, no matter how far removed.


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Endnotes

1 Available at http://www.nycbar.org/Ethics/eth2006.htm

2 See Tom Mighell, "Outsourcing," Law Practice Today, April 2006, available at http://www.abanet.org/lpm/lpt/articles/slc04061.shtml

3 In response to an advertisement offering legal outsourcing services for immigration law practitioners on Immigration Daily online, Bruce A. Hake, a noted commentator on Immigration Law Ethics, objected in a "Letter to the Editor" that it was "an illegal advertisement for the unauthorized practice of law, which is a criminal offense under the laws of most states in the US." Mr. Hake suggested that American lawyers who outsourced legal work would be subject to per se malpractice liability, as well as professional sanctions such as possible disbarment. Immigration Daily, March 28, 2005, www.ilw.com/immigdaily/digest/2005,0328.shtm.

4 In its opinion, the Committee referenced Ethical Consideration 3-6, which states, "A lawyer often delegates tasks to clerks, secretaries, and other lay persons. Such delegation is proper if the lawyer maintains a direct relationship with the client, supervises the delegated work, and has complete professional responsibility for the work product. This delegation enables a lawyer to render legal service more economically and efficiently."

5 Here the Committee references an opinion of the Committee on Professional Ethics of the New York State Bar Association, which stated that a lawyer may use an outside legal research firm staffed with non-lawyers provided the New York lawyer exercised proper supervision, which entailed scrutiny of the completed work to "assur[e] its soundness." N.Y. State Opinion 721 (1999).

I would like to thank Cyrus D. Mehta for taking the time to edit this article.

This article originally appeared on www.cyrusmehta.com on October 13, 2006


About The Author

Adam Ketcher is an Associate at Cyrus D. Mehta & Associates, PLLC where he works in the area of immigration and nationality law. He received his J.D. in 2006 from Brooklyn Law School where he assisted with research for an upcoming casebook on international refugee law and was the recipient of the Edward V. Sparer Public Interest Law Fellowship. Adam has worked as a legal intern for Catholic Charities" Immigrant and Refugee Department, U.S. Citizenship & Immigration Services, and as a summer law clerk for the Executive Office of Immigration Review, New York City Immigration Court. Adam has taken the New York State Bar Examination and is currently awaiting his results


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