Ethics of Legal Outsourcing

Mark Ross, Vice President Legal Process Outsourcing, Integreon

TABLE OF CONTENTS
Introduction ......................................................................................................................................... 3
US .......................................................................................................................................................... 4
AVOIDING AIDING AND ABETTING THE UNAUTHORIZED PRACTICE OF LAW ............................................. 4
COMPETENT REPRESENTATION ......................................................................................................................... 5
DUTY TO DISCLOSE ............................................................................................................................................. 6
PROTECTING CLIENT CONFIDENCES AND SECRETS ....................................................................................... 7
AVOIDING CONFLICTS OF INTEREST ................................................................................................................ 8
BILLING FOR OUTSOURCED LEGAL SUPPORT .................................................................................................. 8
MALPRACTICE INSURANCE AND LPO ERRORS AND OMISSIONS ................................................................. 9
EXPORT CONTROL REGULATIONS .................................................................................................................... 9

UK ....................................................................................................................................................... 10
UK DATA PROTECTION EXPORT ISSUES........................................................................................................... 12
LIMITATION OF LIABILITY ................................................................................................................................... 13

Conclusion ........................................................................................................................................ 14
About the author ............................................................................................................................... 14

Introduction
The practical reality for US and UK lawyers engaging in or contemplating legal process outsourcing (LPO) is that the
outsourcing of both core legal and support services across the legal profession is nothing new. Think about the
following examples:
a. Whenever a client sends work to his/her lawyer, it is outsourcing the work.
b. Whenever a law firm sends work to local counsel in another jurisdiction, or to a specialist outside the firm, it is
outsourcing the work.
c. Lawyers have outsourced legal and law-related services for generations (e.g., from one lawyer to another lawyer,
paralegal or trainee within a single firm and from a law firm to a legal research or document review staffing
company, etc.)..

What is different today with the emergence of the LPO

industry is that both core legal and legal-support-related
services are being outsourced to lawyers, law firms and
corporations with facilities located offshore in countries
such as India, South Africa and the Philippines. The
outsourcing of legal work by a law firm or legal
department to a legal outsourcing company or an entity
located offshore raises specific issues pertaining to the
outsourcing lawyers ethical obligations to his or her
client. In addition there are legislative issues that have a
direct impact on the ability to outsource legal work
overseas. Taking this into account, the concept of
outsourcing elements of the legal process, particularly
offshore, is provocative to say the least.
During the formative years (2005-2009) of the LPO
industry, the relevant regulatory and professional bodies
in the UK the Solicitors Regulation Authority (SRA) and
the Law Society were virtually silent bystanders as
market acceptance of LPO began to gather momentum.
In the US, the picture was slightly different with some
limited guidance available from the American Bar
Association (ABA) and a number of individual state bar
associations.
Over the course of the last two years, however, the
regulatory and professional bodies on both sides of the
Atlantic have begun studying the area intently and both
have recently issued more detailed guidance. In the US,
the ABA established the Commission on Ethics 20/20 (the
Commission) to examine the ethical and regulatory
impact of advancing technology and increasing
globalization including outsourcing on the legal
profession. In May 2011, the Commission issued an initial
draft proposal on outsourcing 1. The Commission
concluded that, although changes to the text of the
Model Rules of Professional Conduct (MRPC) 2 were not
required, practitioners would benefit from appropriate
comments to some of the Rules to help more easily
determine their ethical obligations.

In September 2011, the Commission released a revised

proposal. 3 The Commission will formally file its outsourcing
proposal to the ABAs House of Delegates for their
consideration in August 2012. In the UK, the Legal Services
Board formally approved the SRAs long-awaited new
handbook in June 2011, which contained the most
comprehensive guidance pertaining to LPO available to
date. 4 On October 13, 2011, the Law Society issued a
practice note 5 offering practical guidance to
practitioners considering entering into, or who have
already entered into, an outsourcing arrangement.
The overriding principles governing both US and UK
lawyers compliance with their ethical obligations are
remarkably similar in both jurisdictions. This paper will
initially examine the position as it stands in the US before
turning its attention to the UK. While not professing to be a
definitive how to guide to ethical compliance, the
paper will also provide some practical suggestions aimed
at ensuring US and UK lawyers avoid falling foul of their
respective ethical obligations.
In addition, it is worth noting that a lawyers ethical
obligations differ depending on whether outsourcing is for
substantive legal support services such as legal
research, drafting, contracts, document review, writing
legal memoranda, drafting patent applications, or for
administrative support including IT, transcription,
document coding, accounting and clerical support. For
the purposes of discussion, this paper references primarily
the obligations associated with outsourcing of substantive
legal support services. While there is a degree of overlap
with the ethical and legislative obligations associated
with administrative support outsourcing, particularly when
client confidences are disclosed, it is beyond the scope
of this paper to disaggregate each and every
administrative support function to determine which
ethical rule applies and which does not.

Ethics of Legal Outsourcing | 3

US

AVOIDING AIDING AND ABETTING THE

UNAUTHORIZED PRACTICE OF LAW

I do have concern about confidence,

confidentiality, privacy, conflict of interest, ethical
values, and those are issues that are a real concern.
Jerome Shestack, former President of
the American Bar Association 6
In the early part of the decade, as the first signs of this
new industry began to emerge, proponents of LPO were
often met with the question: Is this ethically permissible or
even legal?
In the US to date, seven bar association ethics
committees 7, the Supreme Court of Ohio Board of
Commissioners on Grievances and Discipline 8, the
Association of the Bar of the City of New York Committee
on Professional Responsibility 9, and the American Bar
Association Standing Committee on Ethics and
Professional Responsibility 10 have released opinions
discussing the outsourcing of legal work. All of the
opinions have concluded that a lawyer in the US can
outsource legal work and at the same time satisfy his or
her ethical obligations. Arguably the opinion that carries
the most weight is the one released by the ABA in August
2008, Opinion 08-451. One novel point about the ABA
Opinion, as opposed to those by the individual bar
associations, is the noticeably conciliatory tone utilized
with regards to outsourcing both generally and
specifically within the legal profession. At page 2 the
Opinion comments:
The outsourcing trend is a salutary one for our
globalized economy.
It is the Digest to the New York Opinion, however, that
most succinctly consolidates the major ethical issues for
consideration:
A New York lawyer may ethically outsource legal
support services overseas to a non-lawyer, if the New
York lawyer (a) rigorously supervises the non-lawyer,
so as to avoid aiding the non-lawyer in the
unauthorized practice of law and to ensure that the
non-lawyers work contributes to the lawyers
competent representation of the client; (b) preserves
the clients confidences and secrets when
outsourcing; (c) avoids conflicts of interest when
outsourcing; (d) bills for outsourcing appropriately;
and (e)when necessary, obtains advance client
consent to outsourcing.
While individual states may reference their own particular
rules of conduct, there is sufficient overlap among the
states that, for the purposes of understanding a lawyers
ethical obligations when outsourcing legal work overseas,
reference to the MRPC is often sufficient. It is beyond the
scope of this paper to explore in detail each and every
bar association opinion, together with each individual
states rules of conduct. This paper will, however, attempt
to provide a broad level of oversight into some of the
most crucial areas of concern while highlighting the
relevant rules.

The defining genuine, as opposed to perceived, ethical

issue associated with the LPO industry is the problem of
the unauthorized practice of law (UPL) by individuals not
qualified to practice law in a particular jurisdiction, and
the associated aiding and abetting of UPL.
The MRPC at 5.5 (a) states:
A lawyer shall not practice law in a jurisdiction in
violation of the regulation of the legal profession in
that jurisdiction or assist another in doing so.
The reasoning behind UPL is that limiting the practice of
law to members of the bar protects the public against
rendition of legal services by unqualified persons. 11
In its Proposal, the Commission concluded that it was
important to make the point explicitly in proposed
Comment [1] to Model Rule 5.5 that 5.5 (a) applied not
only to a lawyers own actions but also his or her actions
when assisting another.
For example, a lawyer may not assist a person in
practicing law in violation of the rules governing
professional conduct in that persons jurisdiction.
The key determining issue pertains to what is classified as
the practice of law and, if an activity would otherwise be
considered as the practice of law, what safeguards and
procedures are put in place, if any, to negate the
possibility that the LPO employees are engaged in UPL.
For the purposes of discussion in this paper as mentioned
earlier, the assumption is that the legal work being
outsourced is of a substantive rather than an
administrative nature, hence viewed as the practice of
law in the normal course of events.
The opinions all conclude that outsourcing legal work
overseas does not constitute aiding and abetting the
unauthorized practice of law where the outsourcing
lawyer enacts an appropriate degree of supervision. The
necessity to supervise is analogous to the duty owed
when delegating work to a paralegal. The necessity to
supervise remains in place irrespective of the degree of
seniority and level of experience of the lawyers located
offshore or in another jurisdiction employed by the LPO
entity. The New York Bar Opinion comments that the New
York Code of Professional Responsibility describes both a
foreign lawyer not admitted to practice in New York or in
any other US jurisdiction and a layperson as nonlawyers.
The Commission offered further guidance in the proposed
Comment [4] to Model Rule 5.3 relating to where the
responsibility lies for the monitoring of non-lawyers in the
specific scenario whereby a corporate client instructs its
outside counsel to use the services of a particular LPO
provider.
Where the client has chosen or suggested a
particular nonlawyer service provider outside the firm,
the lawyer or law firm ordinarily should consult with
Ethics of Legal Outsourcing | 4

the client concerning the allocation of responsibility

for monitoring as between the client and the lawyer
or law firm.
The Commission made it clear that the choice of the
word monitoring was intentional. Even when the
corporate client has chosen and instructed the LPO
provider, outside counsel may have a duty to be aware
of how the LPO provider is performing. The nature of the
tripartite relationship between law firm, in-house counsel
and LPO provider has been the focus of much debate by
the Commission. Unfortunately, while this additional
comment is welcome it does not, in my opinion, go far
enough. Guidance on when the burden to provide direct
supervisory authority shifts from outside to in-house
counsel, if at all, based on the nature of the engagement
would be welcome. Irrespective of this additional
recommendation to consult regarding responsibility for
monitoring, this does nothing to detract from the formal
necessity to supervise the work of the non-lawyer to
ensure that the non-lawyer is not engaged in the
unauthorized practice of law.
The outsourcing lawyer should establish practices and
procedures for the supervision of offshore legal support
that are adaptable and compensate for the physical
separation, time zone differences, and any differences in
legal systems and legal education and training. There is
no all-encompassing checklist of steps to take to avoid
aiding and abetting UPL; however, it is recommended
that the outsourcing law firm become sufficiently familiar
with the professional training of the LPO companys
employees, participate in the training program
specifically as it relates to relevant legal and ethical rules,
and establish regular communication practices to ensure
that the LPO employees have reasonable access to
supervising lawyers in the outsourcing law firm.
The physical degree of separation inherent in the offshore
outsourcing relationship may make this act of supervision
somewhat more difficult from a practical perspective.
The outsourcing lawyer should undertake appropriate
due diligence to determine the competence of the legal
outsourcing company in performing the desired services.
Proactive steps that can be taken in terms of supervision
include reviewing communications between and among
the outsource provider, attorney and client and
instigating a defined protocol for quality checking of
assignments. Work with your chosen LPO provider to
create a documented, defensible process, which if
necessary, can be referenced in a court of law as
evidence that an appropriate system of supervision was
in place.
The crucial issue is that, at all times, the US attorney
retains ultimate responsibility for the outsourced work and
is subject to the particular state bar acts and rules of
professional conduct relating to violation of professional
responsibilities.
Ensure that the outsourcing company assists a
California Attorney in practicing law, NOT the other
way around. 12

COMPETENT REPRESENTATION
MRPC 1.1 A lawyer shall provide competent
representation to a client. Competent representation
requires the legal knowledge, skill, thoroughness and
preparation reasonably necessary for the
representation.
Taking the opinions as a whole, they are useful in that
they provide an extended checklist, paraphrased below
for US attorneys contemplating outsourcing legal work
overseas. Adherence to the below list helps ensure
compliance with the duty competently to represent
ones client. The below list, however, is neither allencompassing nor compulsory in each and every
outsourcing situation.

Conduct reference checks.

Investigate the background of the lawyers, nonlawyers and service provider.
Interview the principal lawyers involved in your
matters and assess their educational background.
Inquire into the LPO companys hiring practices to
evaluate the quality and character of the
employees likely to have access to client
information.
Investigate the security of the providers premises
and computer network.
Conduct a site visit.
Assess the country to which services are being
outsourced for its legal training, judicial system,
legal landscape, disciplinary system and core
ethical principles.
Disclose the outsourcing relationship to the client
and obtain informed consent.

The San Diego Opinion references a useful hypothetical

scenario whereby a small law firm takes on a complex
intellectual property dispute in the San Diego Superior
Court. The law firm has limited experience in intellectual
property litigation. The law firm then contracts with a
fictional India-based LPO company, Legalworks, to
undertake substantive legal support work associated with
the case. Although Legalworks particular area of
expertise lies in the field of intellectual property, in
questioning whether this satisfies the duty to act
competently the Opinion comments that:
nor does procuring work product from a firm
experienced in American intellectual property
litigation fulfill the attorneys duty to act competently.
To satisfy that duty, an attorney must be able to
determine for himself or herself whether the work
under review is competently done. To make such a
determination, the attorney must know enough
about the subject in question to judge the quality of
the work.
It is clear that, to satisfy the duty of competently
representing ones client, a US lawyer engaging an LPO
provider cannot rely on the LPO provider to evaluate its
Ethics of Legal Outsourcing | 5

own work product and must himself or herself be able

critically and independently to evaluate the work
product received.
The Commission proposed further guidance to assist
lawyers in complying with their duty to competently
represent their client with additional Comment [6] to
Model Rule 1.1 Retaining or Contracting with Other
Lawyers. The most relevant sections are detailed below:
Before a lawyer retains or contracts with other
lawyers outside the lawyers own firm to provide or
assist in the provision of legal services to a client, the
lawyer should ordinarily obtain informed consent
from the client and must reasonably conclude that
the other lawyers services will contribute to the
competent and ethical representation of the client.
See also Rules 1.2 (allocation of authority), 1.4
(communication with client), 1.5(e) (fee sharing), 1.6
(confidentiality), and 5.5(a) (unauthorized practice of
law). The reasonableness of the decision to retain or
contract with other lawyers outside the lawyers own
firm will depend upon the circumstances, including
the education, experience and reputation of the
nonfirm lawyers; the nature of the services assigned
to the nonfirm lawyers; and the legal protections,
professional conduct rules, and ethical environments
of the jurisdictions in which the services will be
performed, particularly relating to confidential
information. When using the services of nonfirm
lawyers in providing legal services to a client, a
lawyer also must reasonably conclude that such
services meet the standard of competence under
this Rule.
Although the above proposed new comment references
the retaining of and contracting with other lawyers,
and we have already established that the individuals
working within LPO providers to all intents and purposes
are to be viewed as non-lawyers, the guidance
contained therein still holds true. This is because in a
further proposed additional comment to rule 5.3
Responsibility Regarding Non Lawyer Assistance, the
Commission states that lawyers with managerial authority
must make reasonable efforts to ensure that:
nonlawyers in the firm and nonlawyers outside the
firm who work on firm matters will act in a way
compatible with the Rules of Professional Conduct.
See Comment [6] to Rule 1.1 (retaining lawyers
outside the firm) and Comment [1] to Rule 5.1.
(responsibilities with respect to lawyers within a firm).
Paragraph (b) applies to lawyers who have
supervisory authority over the work of a nonlawyer.
It is clear that the intent of the Commission is that the
guidance detailed above in the proposed Comment to
Rule 1.1 be applied not only to the outsourcing of legal
work to lawyers, but also non-lawyers, i.e., LPO providers.

DUTY TO DISCLOSE
a) If Client Confidences and Secrets are to be
Disclosed
MRPC 1.6 Confidentiality of Information (a) A lawyer
shall not reveal information relating to the
representation of a client unless the client gives
informed consent, the disclosure is impliedly
authorized in order to carry out the representation or
the disclosure is permitted by paragraph (b).
The outsourcing lawyer in virtually all instances will be
under a duty to disclose the nature of the outsourcing
relationship to his or her client. If any client confidential
information is to be disclosed then the client must be
informed. The implied authorization Rule 1.6(a) relates to
the disclosure of client confidential information within a
law firm. The ABA Opinion comments that where the
relationship between the firm and the individuals
performing the services is attenuated, as in a typical
outsourcing relationship, no client confidential
information may be revealed without the clients
informed consent. It is difficult to envisage a legal
outsourcing engagement that does not involve client
confidential information, and thus in each and every
situation it is recommended that the client provides
informed consent.
b) If Client reasonably expects work to be
performed in-house
The San Diego Opinion indicates that the duty to inform
the client is determined by the clients reasonable
expectation as to who will perform those services.
If the work to be performed by the legal process
outsourcing provider is within the clients reasonable
expectation under the circumstances that it will be
performed by the initially instructed US attorney, the client
must be informed when the service is outsourced.
Conversely, if the work is not such that it is within the
clients reasonable expectation that it will be performed
by the attorney, the attorney is not necessarily required to
inform the client of the arrangement.
Unfortunately, this is an overly simplistic and static view of
the attorney-client relationship and the ever-changing
world of legal support services. Clearly, at this current
juncture, the drafting of complex motions and pleadings
on a particular case or the provision of premium legal
advice comes within the ambit of a clients reasonable
expectations that the work would be performed by their
instructed attorney. However, the Opinion only considers
the here and the now. A clients reasonable
expectations are not static, immovable or unchanging
over time. The legal industry now operates in a global
marketplace and clients are increasingly sophisticated
and accepting of the concept of globalization. A clients
reasonable expectations today will be vastly different
tomorrow. Within a very short period of time, it is
conceivable that this argument will become, to an
extent, redundant. Soon, a clients only reasonable
expectation may be that the quality and confidentiality
Ethics of Legal Outsourcing | 6

of the work-product is maintained by whoever completes

it, wherever he or she may be. As the legal profession
continues along its evolutionary journey towards
commoditization, particularly for certain process-driven
legal tasks such as document review or the large scale
review of documents for an M&A due diligence, we may
soon reach the day when a clients reasonable
expectations will be that work-product should be
outsourced to the most efficient and cost-effective
provider.
c) If Cost of Engagement is Marked Up
The Ohio Opinion discusses the current modus operandi
within law firms of engaging with and subsequently
marking up the cost of domestically based contract
attorneys, and the lack of disclosure of this practice to
clients. According to the Supreme Court of Ohio,
disclosure, consultation and informed consent are not
necessary when a law firm engages a contract attorney
in a situation when, for example, a sudden illness of an
employee requires a temporary replacement who
functions as an employee of the law firm. The Opinion
states:
Outside this narrow circumstance, disclosure,
consultation, and consent are the required ethical
practice.
Although the Ohio Opinion does not reference the
common practice of engaging domestic contract
attorneys for large-scale document review projects, as I
interpret it, that would not fall within the narrow
circumstance detailed above. In any event, if a US
lawyer engages an LPO provider and wishes to charge
anything other than the basic cost of the services then,
according to the Ohio Opinion:
if any amount beyond cost is addedThe decision
must be communicated to the client preferably in
writing, before or within a reasonable time after
commencing the representation
The ABA Opinion states that when engaging contract
lawyers you can mark up:
In Formal Opinion No. 00-420, we concluded that a
law firm that engaged a contract lawyer could add
a surcharge to the cost paid by the billing lawyer
provided the total charge represented a reasonable
fee for the services provided to the clientIn the
absence of an agreement with the client authorizing
a greater charge, the lawyer may bill the client only
its actual cost plus a reasonable allocation of
associated overhead, such as the amount the lawyer
spent on any office space, support staff, equipment,
and supplies for the individuals under contract.
The crucial words are in the absence of an agreement
authorizing a greater charge. Clearly, if the outsourcing
attorney wishes to mark up the cost of outsourced
services then there must be prior consent on the part of
the client.

PROTECTING CLIENT CONFIDENCES AND

SECRETS
The Ohio Opinion comments:
Client confidentiality is a hallmark of the attorney
client relationship.
The San Diego County Bar Association Ethics Opinion
2007-1 states that an additional duty of an attorney who
outsources work, whether within the US or abroad, is to
maintain inviolate the confidence, and at every peril to
himself or herself, to preserve the secrets of his or her
client. (See California Business & Professions Code
section 6068(e).)
The New York State Unified Court Systems Rules of
Professional Conduct at Rule 1.6 imposes a duty on a
lawyer to preserve the confidential information of its
clients. Under Rule 1.6, confidential information consists
of information gained during or relating to the
representation of a client, whatever its source, that is (a)
protected by the attorney-client privilege, (b) likely to be
embarrassing or detrimental to the client if disclosed, or
(c) information that the client has requested be kept
confidential.
This additional duty to protect client confidences and
secrets extends beyond the requirements as set out in
MRPC Rule 1.6(a), and compels the outsourcing attorney
to take proactive steps to ensure the preservation of
client confidential information.
The San Diego Opinion comments on one unfortunate
example of a breach of confidentiality involving an
outsourced project subcontracted to India. There, the
subcontractor threatened to post confidential patient
records on the Internet unless the UC San Francisco
Medical Center retrieved money owed to the
subcontractor from a middleman.
Attorneys need to carry out their own research into the
physical and data security policies and procedures in
place at the LPO company with which they are
contemplating contracting. Taking proactive steps to
ensure these policies and procedures meet the highest
standards in physical and data security is necessary to
ensure compliance with this additional duty. Proactive
steps can include requiring potential providers to
demonstrate compliance with and/or certification by
independent facility and security auditing bodies, such as
SAS 70, IS0 27001, HIPAA or EU Safe Harbor. The US-EU Safe
Harbor, for example, is a streamlined process for US
companies to demonstrate compliance with the EU
Directive 95/46/EC on the protection of personal data.
Intended for organizations within the EU or US that store
customer data, the Safe Harbor Principles are designed
to prevent accidental information disclosure or loss.
The master services agreement (MSA) with the LPO
company should specifically address the issue of client
confidential information. One area worth highlighting
particularly in reference to an LPO engagement relates
to the issue of subcontracting, a practice not uncommon
Ethics of Legal Outsourcing | 7

within the LPO world. Taking into account that in virtually

all legal outsourcing engagements client confidential
data will be involved, subcontracting should be
prohibited or subject to stringent approval requirements
in the MSA.

AVOIDING CONFLICTS OF INTEREST

The New York Opinion comments that New York Lawyers
Code of Professional Responsibility at DR 5-105(E) requires
a law firm to maintain contemporaneous records of prior
engagements and to have a system for checking
proposed engagements against current and prior
engagements.
Discussing the engagement of an LPO provider and the
associated conflict of interest checking requirements, the
Florida Opinion confirms agreement with the conclusions
reached in the Los Angeles Opinion, which states:
[T]he attorney should satisfy himself that no conflicts
exist that would preclude the representation. [Cite
omitted.] The attorney must also recognize that he or
she could be held responsible for any conflict of
interest that may be created by the hiring of
Company and which could arise from relationships
that Company develops with others during the
attorneys relationship with Company.
The outsourcing law firm/legal department should ask the
LPO provider about its own conflict checking procedures
and about how it monitors work performed for other
clients. The outsourcing law firm/legal department should
also ask the LPO provider whether it is performing or has
performed services for any parties adverse either to the
firms clients or to the corporation itself. Furthermore, the
outsourcing law firm/legal department should seek
assurances that the individuals within the LPO provider
performing the legal support service have never
previously performed nor are currently performing
services for any parties adverse to the lawyers client or
the corporation. To assist in fulfilling this obligation, it is
highly recommended that the outsourcing lawyer
develop a conflict-of-interest questionnaire for utilization
in situations where he or she wishes to outsource work
either domestically or offshore. The MSA between the
parties should make as a requirement of any retention of
the LPO company the satisfactory completion of the
conflict-of-interest questionnaire.
One as yet unresolved difficulty within the LPO industry is
that it is commonplace for employees to sign
comprehensive non-disclosure and confidentiality
agreements with their LPO employers. This raises an issue
with potential lateral movement across the LPO industry
to other providers. Subject to their confidentiality
agreement with previous employers, candidates may be
unwilling to disclose pertinent information pertaining to
previous client engagements. One possible solution is for
the outsourcing law firm/legal department seeking to
engage these resources to identify a hot list of potential
conflicts, and the concerned employees can indicate in

general terms as to whether any of the listed clients raise

possible conflict concerns.

BILLING FOR OUTSOURCED LEGAL SUPPORT

MRPC 1.5 (a) A lawyer shall not make an agreement
for, charge, or collect an unreasonable fee or an
unreasonable amount for expenses.
The issue of how to bill appropriately for outsourced legal
support services has not been determined definitively as
yet. There is consensus across the ABA and individual
state bar association opinions that a simple pass-through
of the cost of the services together with appropriate
billing for supervision and overhead is permissible.
However, the issue of whether a reasonable markup of
the cost of the outsourced support is allowed warrants
further debate.
The Ohio Board comments:
The most straightforward approachmay be for a
lawyer or law firm to bill the client for the outsourced
services as an expense based upon the actual cost
of the service to the law firm, with an adjustment if
necessary to cover a lawyer or law firms costs of
supervision of the outsourced services.
The determination as to whether to bill for outsourced
services as an expense (plus cost of supervision) or as part
of legal fees, is according to the Ohio Board:
left to a lawyers exercise of professional judgment.
In Formal Opinion No. 00-420 13, the ABA concluded that a
law firm that engaged a contract lawyer could mark up
the cost provided that the total charge represented a
reasonable fee for the services provided to the client.
As dealt with earlier in the discussion surrounding the
outsourcing attorneys duty to disclose, In the absence
of an agreement with the client authorizing a greater
charge (ABA 08-451), no markup is permissible. This
implies that, in the presence of such an agreement, the
question reverts back to simply whether the fee is
reasonable pursuant to rule 1.5 MRPC.
Whether billing as an expense or as part of legal fees, the
overarching requirement identified by the ABA is that the
fee charged should not be unreasonable and must be in
keeping with the general requirements of Rule 1.5, as set
out below:
1.5 (a) A lawyer shall not make an agreement for,
charge, or collect an unreasonable fee or an
unreasonable amount for expenses. The factors to be
considered in determining the reasonableness of a
fee include the following:
(1) the time and labor required, the novelty and
difficulty of the questions involved, and the skill
requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the
acceptance of the particular employment will
preclude other employment by the lawyer;

Ethics of Legal Outsourcing | 8

(3) the fee customarily charged in the locality for

similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by
the circumstances;
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, and ability of the
lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.
Rule 1.5 is clear that not only shall a lawyer not charge or
collect an unreasonable fee, they shall not make an
agreement for one. There is no definitive answer as to
what level of markup agreed to between a client and
attorney would be considered as unreasonable.
However, while the overhead costs involved in an LPO
engagement are clearly less than those associated with
the law firms own employees, they are certainly not nonexistent. In addition, there are other forces at play that
justify a degree of markup. The engagement itself will no
doubt be covered by the outsourcing law firms own
malpractice insurance policy. In ensuring compliance
with ethical obligations, the outsourcing lawyer will have
gone through a rigorous due diligence and selection
process in determining their choice of LPO provider.
Depending on the nature of the relationship between the
law firm and the LPO provider there may be IT, HR,
litigation support and other ancillary overhead costs
associated with the successful maintenance of the
relationship. In addition, there is the layer of supervision
and project management that the firm will wish to have
in place to govern the relationship. The available advice
pertaining to the instruction of domestically based
contract attorneys in no way implies that the firm cannot
profit in any way from such an engagement when
undertaken domestically, and the position is not
substantially different when going offshore. The only
difference is the degree of markup considered
reasonable.
A separate yet related point, and one worthy of debate,
is whether there is a valid argument that, given the
requirement set out above not to charge an
unreasonable fee, whether a US law firm is under a duty
at the very least to inform their clients of the offshore
LPO option for certain routine, commoditized legal tasks,
such as first pass document review.
If one works with the premise that offshore first pass
document review is significantly more cost-competitive
and also comparable in terms of productivity and quality,
then if one doesnt inform a client that conducting first
pass document review offshore is an option, how does
this sit with ones ethical obligation set out in the MRPC at
Rule 1.5 not to charge or make an agreement for an
unreasonable fee? Is it reasonable to assume that
billing anything approaching AmLaw 200 junior associate
hourly rates for first pass document review could be
deemed to be an unreasonable fee, given the time
and labor required, the novelty and difficulty of the

questions involved, and the skill requisite to perform the

legal service properly? This question warrants further
debate.

MALPRACTICE INSURANCE AND LPO

ERRORS AND OMISSIONS
It is incumbent upon US law firms and lawyers carefully to
review the coverage and any associated limitations on
their professional liability insurance. If the policy does not
cover the instruction by the firm of temporary attorneys or
non-lawyers, subject to adequate supervision by the
firms own lawyers, then in the event of an error or
omission on the part of an LPO employee the firm will not
be covered.
A recent malpractice lawsuit filed against McDermott Will
& Emery LLP (McDermott) in June 2011, serves as a
cautionary tale. In the suit, J-M Manufacturing (J-M)
alleges that McDermott failed to adequately supervise
contract review attorneys who inadvertently produced
privileged documents to the government. The
documents were subsequently handed over to a third
party who refused to destroy the documents, arguing
that J-M waived attorney-client privilege when it
produced them to the government. While this may be
the first e-discovery malpractice lawsuit specifically
dealing with the issue of lack of supervision of contract
lawyers, it surely wont be the last.
Many malpractice insurance policies provide coverage
to law firms for the acts and omissions of domestically
engaged contract attorneys and will not preclude
coverage based on a firms engagement of foreign
lawyers through an LPO provider. However, this can be
easily and quickly clarified by addressing the issue with
the insurer directly.
The US lawyer seeking to engage an LPO provider as part
of his or her own due diligence should determine whether
the LPO company itself holds sufficient professional global
errors and omissions (E&O) insurance coverage. The
market leaders routinely carry comprehensive E&O
insurance; however, if one takes a broad snapshot of the
LPO provider market and the plethora of smaller
companies that have sprung into existence over the last
few years, many do not.

EXPORT CONTROL REGULATIONS

Meriting a separate discussion are the legislative barriers
in place governing the outsourcing of patent support
services overseas. In the US, the Export Administration
Regulations (EAR) govern the international dissemination
of certain technologies. These restrictions also apply to
technology and are not solely limited to tangible goods.
Invention disclosures enabling the drafting of patent
applications or the undertaking of certain types of patent
searches may meet the definition of technology. For the
purposes of this discussion, technology is defined in the
relevant regulations as specific information necessary for
development, production or use of a product. (15 CFR
772.1.)
Ethics of Legal Outsourcing | 9

The Bureau of Industry and Security (BIS) is responsible for

enforcing and implementing EAR and has regulatory
control over a vast array of technologies ranging from
dual-use items to purely commercial goods.
On July 23, 2008, the USPTO released a notice titled, the
Scope of Foreign Filing Licenses. The notice reminds US
patent attorneys and agents that a foreign filing license
does not authorize them to send invention disclosures
abroad to draft patent applications for eventual filing in
the United States.
The most relevant portion of the notice states:
Applicants who are considering exporting subject
matter abroad for the preparation of patent
applications to be filed in the United States should
contact the Bureau of Industry and Security
(BIS)The BIS has promulgated the Export
Administration Regulations (EAR) governing exports of
dual-use commodities, software, and technology,
including technical data, which are codified at 15
CFR Parts 730774.
Adhering to the BIS regulatory framework is absolutely
essential for any organization interested in outsourcing
patent support work to a foreign country. The regulations
are also applicable to the outsourcing of documentation
perhaps pertaining to an intellectual property litigation
matter, when the particular documentation falls within
the EAR definition of technology. Failure to comply with
federal export regulations can result in severe fines and
even imprisonment. Items subject to EAR are enumerated
on the Commerce Control List (CCL).
The CCL references a list of technologies (covered items)
under the export control jurisdiction of the BIS. The CCL
contains 10 categories of controlled items:
Category 0

Nuclear Materials, Facilities

&Equipment (and Miscellaneous
Items)

Category 1

Materials, Chemicals,
Microorganisms, and Toxins

Category 2

Materials Processing

Category 3

Electronics

Category 4

Computers

Category 5 (Part 1)

Telecommunications

Category 5 (Part 2)

Information Security

Category 6

Sensors and Lasers

Category 7

Navigation and Avionics

Category 8

Marine

Category 9

Propulsion Systems, Space Vehicles

and Related Equipment

Following review of the above list, it appears that

numerous technical fields fall under the 10 categories
listed in the CCL. US lawyers and patent agents engaging

the services of an LPO for support in drafting patent

applications must:
a. Conduct an export clearance check/invention
classification before sending invention disclosures
overseas.
b. Seek the necessary clearance from the BIS if the
export clearance check/invention classification
reveals that the subject matter is a controlled
item.
The regulations governing the export of technology and
the practical reality of the type of work most frequently
outsourced should prevent US law firms and corporations
from becoming overly discouraged with the
consequences of potential export violations. Only
information that is unpublished (not in the public domain)
is restricted by US export controls. (15 C.F.R. 734 (EAR) and
22 C.F.R. 120.11 (ITAR).) This means that many patent
services and documentation relating to intellectual
property litigation can be freely outsourced, even if the
technology in question falls within the scope of the EAR.
Patent application drafting represents only a tiny
percentage of the work currently being outsourced
overseas by US law firms and corporations. Invalidity,
Freedom to Operate and Landscape searches, together
with most novelty searching (subject to appropriate
tailoring of the invention disclosure so as not to fall foul of
the EAR), can all be freely outsourced, as can issued
patent proofreading, file wrapper analysis and
competitive research.

UK
Over the course of the last 24 months, the Law Society
and subsequently the SRA have turned their attention to
LPO. In early 2010 the Law Society established an ad hoc
LPO investigatory committee which took evidence from
key stakeholders from law firms, in-house legal
departments, LPO consultants and LPO providers. The
goal was to obtain as broad a perspective as possible
and to attempt to formulate guidelines and make
recommendations to the SRA. Then in July 2010 the SRA
issued its first statement on the subject, commenting:
Where law firms are outsourcing the SRAs
guidance is that this is allowed on the basis that all
relevant rules are complied with (Solicitors Code of
Conduct 2007) and that the arrangement is made
transparent and is agreed with the client.
More recently, in April 2011, the SRA released its long
awaited handbook which provided further guidance for
solicitors engaging in legal outsourcing. The handbook
was approved by the Legal Services Board in June 2011
and implemented on October 6, 2011. The Solicitors
Code of Conduct, which until that point had been the
best source of guidance, was replaced by the SRA Code
of Conduct 2011 as part of the introduction of outcomesfocused regulation.
It is worth highlighting that, prior to the introduction of the
2011 Code of Conduct, there was no mention in the
Ethics of Legal Outsourcing | 10

preceding 2007 Code of Conduct of substantive legal

outsourcing. Rather, the guidance available referenced
the outsourcing of administrative support services such as
word processing, telephone call handling, or
photocopying. The rules affecting outsourcing were
detailed in Rules 1-5 14 and dealt with in particular: acting
in clients best interests, providing a good standard of
service, avoiding conflicts of interest, keeping client
confidences and supervision.
Rule 4: Confidentiality and Disclosure, 8(f)
If you outsource services such as word processing,
telephone call handling or photocopying you must
be satisfied that the provider of those services is able
to ensure the confidentiality of any information
concerning your clients. This would normally require
confidentiality undertakings from the provider and
checks to ensure that the terms of the arrangements
regarding confidentiality are being complied with.
Whilst you might have implied consent to confidential
information being passed to external service
providers, it would be prudent to inform clients of any
such services you propose to use in your terms of
business or client care letters.
The new guidance in the SRA handbook in relation to LPO
is significant. In the introduction to the handbook, on
page 3, it states:
Although firms now have greater freedom in the way
they offer services (e.g. outsourcing certain
functions), they may not abrogate responsibility for
compliance with regulatory requirements.
Then in chapter 4 of the Code of Conduct, dealing with
Confidentiality and Disclosure, at Indicative Behaviour 4.3
the SRA advises solicitors:
you only outsource services when you are satisfied
that the provider has taken all appropriate steps to
ensure that your clients confidential information will
be protected
There is no all-encompassing checklist identifying what
these appropriate steps are; however, the below list
includes some of the standard safeguards reputable
providers should routinely have in place:

Security measures to protect electronic

information (e.g., encryption, malware protection,
firewalls)
Biometric and other security measures to restrict
physical access
Separately demised premises for client
engagements
Video surveillance
Regular identity checks
Disabling of USB ports
Background checks on employees
Requiring employees to sign confidentiality and
non-disclosure agreements
Monitoring employee computers

One method of ensuring that you are personally satisfied

that the provider has taken all appropriate steps is to
conduct a site visit of the providers premises. This,
however, is not the only recourse available to you.
Ensuring that the provider subjects their facilities to
independent auditing from third-party information
security auditors in conjunction with compliance with
internationally recognized independent security
standards, such as ISO 27000, can achieve the same
goal.
However, the guidance from the SRA that has attracted
the most press attention 15, is the stipulation in Chapter 7,
Management of Your Business, that states at Outcome
7.10:
where you outsource legal activities or any
operational functions that are critical to the delivery
of any legal activities, you ensure such outsourcing:
a) does not adversely affect your ability to comply
with, or the SRAs ability to monitor your
compliance with, your obligations in the
Handbook;
b) is subject to contractual arrangements that
enable the SRA or its agent to obtain information
from, inspect the records (including electronic
records) of, or enter the premises of, the third
party, in relation to the outsourced activities or
functions
While this has created a degree of furor, the perspective
from within the LPO industry is that this close attention
from the SRA is a long-overdue acknowledgement that
outsourcing has become an integral part of the legal
services delivery spectrum. Leading LPO providers
routinely open their doors to audits of their premises, both
by clients and independent auditing bodies. Adding the
SRA, or its agent, to the mix is not in any way an onerous
requirement on the part of the leading LPO providers.
Taken as a whole, these developments and guidance
should ultimately provide clarity and encourage good
business practices.
It is not difficult, however, to envisage some practical and
logistical difficulties on the part of the SRA in formally
performing these referenced record and premises
inspections. There are as yet a number of unanswered
questions. Is it the intention of the SRA to undertake a
fact-finding trip to India, the Philippines, and South
Africa to inspect the premises of the leading LPO
providers? Will this be a one-off visit or do they intend to
perform repeat audits? Furthermore, the Law Society has
publically commented that it takes issue with this part of
the Code, believing that this will cause unintended
difficulties for its members as it is likely that a range of
functions will be caught by the term critical to the
delivery of legal activities.
Further clarification by the SRA pertaining to the steps
solicitors engaging in, or contemplating, outsourcing
should take, as well as examples of the types of activities
which would be caught by outcome 7.10, are detailed in
Ethics of Legal Outsourcing | 11

the SRAs Outcomes-Focused Regulation at a Glance

guide (the Guide) 16. In short, the SRA expects any new
outsourcing engagements to be governed by contracts,
enabling the SRA to meet the specific terms highlighted
in outcome 7.10.
The Guide goes on to state that:
Outcome 7.10 refers to the outsourcing of legal
activities or any operational functions that are critical
to the delivery of any legal activities. Legal activities
are defined in the glossary to the Handbook and
include the provision of legal advice or assistance, or
representation in connection with the application of
the law or resolution of legal disputes.
The Guide then provides a non-exhaustive list of the types
of activities which, if outsourced, would be caught by
Outcome 7.10. These are:

activities which would normally be conducted by

a paralegal
initial drafting of contracts
legal secretarial services digital dictation to an
outsourced secretarial service for word processing
or typing
proofreading
research
document review
Companies House filing
due diligence, for example in connection with the
purchase of a company
IT functions which support the delivery of legal
activities
business process outsourcing

Elsewhere, the Law Society has issued two recent

practice notes that both directly and indirectly discuss
outsourcing. The practice notes represent the Law
Societys view of good practice in a particular area.
While compliance with a practice note is neither
compulsory nor enforceable, following the advice in
these notes will make it easier to account to the SRA for
your actions.
The model client care practice note 17 at s 5.2.4 indicates
that outsourcing should be disclosed and informed client
consent obtained, consistent with the duty of
confidentiality.
5.2.4 Outsourcing of work
Where you outsource work on client files, there is a
risk your outsourced provider may breach client
confidentiality. Drawing attention to this risk may
mitigate any breach of confidentiality which then
occurs, but you still risk regulatory action. You should
ensure that you have a confidentiality agreement
with your suppliers. In your terms and conditions you
should: advise the client if the practice outsources
work and the type of work it outsources; alert the
client to the potential risks in relation to preserving

client confidentiality; ask the client to tell you if they

object to this practice.
The practice note suggests including in the client care
letter a paragraph seeking the clients informed consent.
For example:
Sometimes we ask other companies or people to do
[typing/photocopying/other work] on our files to
ensure this is done promptly. We will always seek a
confidentiality agreement with these outsourced
providers. If you do not want your file to be
outsourced, please tell us as soon as possible.
On October 13, 2011, the Law Society released a
practice note specifically dealing with outsourcing. 18
While it is recommended that practitioners familiarize
themselves with this practice note, be aware that there is
minimal novel content; rather, the note repeats guidance
that is already available and contained within the SRA
Handbook and the Guide. The note does highlight some
specific risks in relation to outsourcing and recommends
that practitioners consider these risks before engaging
with an outsourcing provider and continue to monitor
these risks throughout the life of the outsourcing
engagement. As I commented at the beginning of this
paper, while there is a degree of overlap with the ethical
and legislative obligations associated with both
administrative support services outsourcing and
substantive legal outsourcing, the note distinguishes
between the two, implying that the level of risk is greater
with the latter:
The level of risk will depend on the particular type of
outsourcing e.g., whether the practice is outsourcing
an administrative function or whether it is outsourcing
legal activities.

UK DATA PROTECTION EXPORT ISSUES

There are specific UK data protection law issues that arise
as part of legal outsourcing engagements that affect
whether personal data can be exported to India, the
Philippines and other offshore destinations. It is beyond
the scope of this paper to provide a rigorous examination
of the relevant legislation; however, it is important to
cover the key points.
The relevant piece of UK legislation is the Data Protection
Act 1998 (the Act) which implements in UK law the 1995
EU Data Protection Directive. The Eighth Principal of the
Act states:
Personal data shall not be transferred to a country or
territory outside the European Economic Area unless
that country or territory ensures an adequate level of
protection for the rights and freedoms of data
subjects in relation to the processing of personal
data.

Ethics of Legal Outsourcing | 12

As far as the export of personal data is concerned, India

and the Philippines do not have adequate statutory
regimes in place. There are, however, several methods
available under the Act by which the requirements of the
Eighth Principle can be met and the export of data to
India and the Philippines can be permitted. Some of
these methods are as a matter of law deemed to be
compliant with the Act. Other methods involve making a
determination that the approach taken is sufficient to
establish adequacy. The methods that involve a
subjective determination as to their veracity clearly do
not provide the same degree of certainty.
The most common approach taken in LPO engagements
that involve the potential export of personal data to India
or the Philippines is to incorporate into the MSA with the
client what are termed the Model Clauses. This
approach has been determined to be compliant with the
Act. The Model Clauses have been approved by both
the EU and the UKs Information Commissioner as
sufficient to meet the requirements of the Eighth Principle.
It is further important to note that the Act binds the UK
customer (law firm or corporate client engaging in LPO)
who, as the person who determines the purposes for
which and the manner in which the personal data is, or is
to be, processed, as a data controller under the Act.
In virtually all legal process outsourcing arrangements, the
LPO provider would be deemed to be a data
processor under the Act. This distinction is important,
because:

most of the obligations under the Act apply to the

data controller, not the data processor, including
the core eight data protection principles;
the data controller is responsible for determining
how the personal data should be processed and
the data processor must follow the data
controllers instructions; and
the data controller is responsible under the Act for
the data processors acts in processing the
personal data.

The obligations of the LPO provider are to process

personal data in accordance with the instructions of the
data controller and to ensure that such processing is
carried out with appropriate technical and
organizational security measures.
Recommended proactive steps an LPO provider should
take to ensure compliance with the above include:

Complying with internationally recognized

independent security standards such as ISO 27000.
Inviting client-appointed, third-party information
security auditors to inspect the LPO providers
operations.
Appointing an in-house data protection officer.
This ensures that the client has a single point of
contact at the LPO provider.

It is worth noting that on April 13, 2011, India issued new

privacy regulations The Information Technology
(Reasonable Security Practices and Procedures and

Sensitive Personal Data or Information) Rules 2011. These

rules govern the collection and use of Personal
Information by organizations in India, even if the Personal
Information applies to individuals outside of India. At the
time of writing, it is unclear how these new regulations will
be implemented in practice or what the impact of these
new rules will be on Indias standing in the eyes of the EU.
However, the introduction of these new regulations may
in part be motivated by a desire on the part of the Indian
government to create a regime that is viewed as having
an adequate level of protection in place.

LIMITATION OF LIABILITY
An interesting dilemma for UK law firms is whether a firm is
able to limit its liability with a corporate client, where the
corporate client mandates the utilization of an LPO
provider for certain legal functions and contracts directly
with the LPO provider. This contractual arrangement is not
uncommon practice, particularly in the arena of largescale document review.
For example, envisage the scenario where a corporate
client contracts directly with the LPO company to
undertake a first pass review of a significant volume of
electronic documents, while instructing its outside counsel
law firm to undertake a second level review and to
provide comprehensive case strategy and advocacy.
Statute (s 60(5), Solicitors Act 1974) restricts a firms ability
to limit liability to its clients; however, these rules only
apply to work that falls within the scope of the client
engagement, i.e., detailed within the retainer
agreement. The law firm is perfectly capable of excluding
a particular task from the scope of legal services which it
has been retained by its client to perform. In this scenario,
if a particular task is excluded, the Solicitors Act and
Code of Conduct would not apply. It then becomes a risk
vs. reward consideration on the part of the corporate
client who is free to instruct the LPO provider and outside
counsel to undertake distinct and separate legal tasks
pertaining to the same matter and to accept that each
will be liable for its own work.
The engagement letters must define clearly who is
responsible for a particular task. This is where, in practice,
difficulties may arise, particularly as in the example stated
above where the law firm has been engaged to
undertake a second level review. The practical reality
of a document review engagement is that it is a fluid,
iterative process with ongoing communication,
deliberation and consultation among the parties. The
wording in the retainer agreements of the parties would
require extremely careful drafting to ensure the proper
allocation of liability.
Furthermore, if the law firm has played a role in the
selection or recommendation of the chosen LPO
provider, there remains the possibility of a claim for either
negligent selection or negligent misstatement. In the
scenario where the law firm is performing a second level
review of work initially undertaken by the LPO provider, it
would appear difficult for the law firm to exclude its duty

Ethics of Legal Outsourcing | 13

of care, as it is clearly accepting some responsibility for

the work performed by the LPO provider. The law firm
could limit the potential for such claims in its terms of
engagement with the client by expressly excluding
liability in relation to the tasks being performed by the
LPO provider.

Alternatively, the law firm could require the LPO provider

to indemnify it for any loss suffered as a result of the
providers negligence.

Conclusion

About the author

It is apparent on careful consideration of the existing and

proposed rules and regulations on both sides of the
Atlantic that the rules of compliant engagement are
similar in both jurisdictions. Whether within an individual
states rules of conduct or the ABAs Model Rules of
Professional Conduct or in the UK, the SRAs Code of
Conduct, ethical rules exist that affect a legal
outsourcing relationship. These rules ensure that only a
lawyer, licensed in the appropriate jurisdiction, practices
law within that jurisdiction. Furthermore, if a legal
outsourcing company is engaged to assist in the
performance of a legal task, the outsourcing lawyer must
ensure that adequate supervision is in place by a lawyer
within the firm competent to perform the particular legal
task and to evaluate the work undertaken by the legal
outsourcing company. In addition, in the UK, as discussed
above, there is specific legislation in the form of the Data
Protection Act that governs the transfer of data overseas.
As new innovative models for delivering legal services
continue to emerge, the legal profession is facing a
period of evolutionary change. It is reassuring to those of
us living and working within this morphing global legal
professional ecosystem that the regulatory bodies on
both sides of the Atlantic are giving long overdue
attention to these developments. In fact, the concluding
remarks of the ABA Ethics 20/20 Commission in their Initial
Draft Proposal are also a fitting conclusion to this paper.
The Commission does not intend for its proposals to
be the final word on outsourcing. Rather, the
Commission believes that continuing study of
outsourcing practices is essential, especially given
that those practices continue to evolve and new
issues continue to arise.

Disclaimer: This article contains suggestions and thoughts

about legal ethics in the field of legal outsourcing. Nothing in
this article should be construed as legal advice or be
interpreted to advance a policy or impose a duty or
obligation. All statements in this article are the opinions of the
author.

Mark Ross is an experienced UK litigation solicitor,

former partner at UK law firm Underwoods and
now Vice President of Legal Solutions at Integreon.
Marks involvement in legal outsourcing dates
back to January 2004 when Underwoods became
the first UK law firm to outsource legal work to a
lower cost common law jurisdiction. Chambers
Guide refers to Underwoods as a pioneer of legal
offshoring.
Mark joined Integreon in November 2009. He is a
preeminent authority and thought leader in the
field of legal outsourcing. He is also a recognized
expert on the Ethics of Legal Outsourcing, and has
written numerous articles and widely acclaimed
white papers dealing with the subject. He
developed the first State Bar MCLE Ethics and CPD
accredited courses, provided by a legal
outsourcing company, on the ethical implications
of outsourcing legal work.
Marks experience in the LPO field is such that he is
only person to have been invited to address the
ABA, UK Law Society, Solicitors Regulation
Authority and the International Bar Association on
the topic.
He has been interviewed by numerous
mainstream and legal publications, including The
New York Times, Wall Street Journal, Time
magazine, the UK Law Society Gazette, and the
ABAs Law Practice Management. He is the former
Chair of the International Association of
Outsourcing Professionals Legal Outsourcing
Chapter and is on the editorial board of
Outsource Magazine.
He has also been invited to speak as a leading
authority on legal outsourcing at conferences run
by prestigious organizations including: Financial
Times, U.C. Berkeley School of Law, Stanford
Center for the Legal Profession, Practicing Law
Institute, and American Lawyer.

Ethics of Legal Outsourcing | 14

Endnotes
American Bar Association Commission on Ethics 20/20
Initial Draft Proposal Outsourcing, 2 May 2011,
http://www.americanbar.org/content/dam/aba/adminis
trative/professional_responsibility/20110502_outsourcing.a
uthcheckdam.pdf.
1

American Bar Association Model Rules of Professional

Conduct,
http://www.abanet.org/cpr/mrpc/mrpc_toc.html.
2

3 American Bar Association Commission on Ethics 20/20

Revised Proposal - Outsourcing, 19 September 2011,
http://www.americanbar.org/content/dam/aba/adminis
trative/ethics_2020/20110919_ethics_20_20_outsourcing_r
evised_resolution_and_report_posting.authcheckdam.pd
f.

Solicitors Regulation Authority Handbook (2011),

http://www.sra.org.uk/solicitors/freedom-inpractice/newhandbook/new-handbook-overview.page .
4

Outsourcing Practice Note, 11 October 2011,

http://www.lawsociety.org.uk/productsandservices/pract
icenotes/outsourcing/5044.article.
5

The Law Report, ABC, Radio National W-D, Outsourcing

Legal Services, 21 February 2006,
http://www.abc.net.au/rn/talks/8.30/lawrpt/stories/s1573
652.htm.
6

7 Los Angeles County Bar Association, Opinion 518

(2006),http://www.lacba.org/Files/Main%20Folder/Docu
ments/%20Ethics%20%20%20Opinions/Files/Ethics_Opinion
_518.pdf.

North Carolina State Bar, Formal Ethics Opinion 12

(2007),http://www.ncbar.gov/ethics/ethics.asp?page=2&
keywords=outsourcing.
San Diego Bar Association Legal Ethics Opinion 2007-1
(2007),http://www.sdcba.org/ethics/ethicsopinion071.htm.
Florida Bar Opinion 07-2 (2008),
http://www.floridabar.org/tfb/tfbetopin.nsf/SearchView/E
THICS,+OPINION+07-2?opendocument.
The Association of the Bar of the City of New York Formal
Opinion 2006-3 (August 2006),
http://www.nycbar.org/Publications/reports/print_report.
php?rid=503&searchterm=2006.
Virginia State Bar Standing Committee On Legal Ethics
Seeking Public Comment On Legal Ethics Opinion
1850,http://www.vsb.org/site/regulation/leo-1850.

The Supreme Court of Ohio, Opinion 2009-6, August

2009,
http://www.sconet.state.oh.us/Boards/BOC/Advisory_Opi
nions/2009/op_09-006.doc.

9 The Association of the Bar of the City of New York

Commission on Professional & Judicial Ethics, Formal
Opinion 2006-3 (2006),
http://www.abcny.org/index.php/ethics/ethicsopinionslocal/2006-opinions/807-outsourcing-legalsupport-servicesoverseas.

ABA Committee on Ethics and Professional

Responsibility Formal Opinion 08-451 (2008),
http://apps.americanbar.org/abastore/index.cfm?sectio
n=main&fm=Product.AddToCart&pid=5611100451PDF.

10

11 Pollak, Darya, Im Calling My Lawyer...in India!: Ethical

Issues in International Legal Outsourcing, UCLA Journal
of International Law and Foreign Affairs, 11 UCLA J. Intl L.
& Foreign Aff.99 (2006).
12 Offshore Legal Outsourcing: the Ethical Implications,
(LawScribe MCLE Course handout), LawScribe, Inc.
[Glendale, CA], 2007.
13 ABA Formal Opinion 00-420 Surcharge to Client for Use
of a Contract Lawyer,
http://www.abanet.org/cpr/pubs/issue_index.html.
14 Solicitors Code of Conduct 2007, Rules 104,
http://www.sra.org.uk/solicitors/code-of-conduct.page.
15 See Legal Watchdog Set to Scrutinize Law Firm
Outsourcing Contracts,
http://www.legalweek.com/legalweek/news/2038365/watchdog-set-scrutinise-law-firmoutsourcingcontracts.
16 Outcomes-focused regulation at a glance, Q&As
Outsourcing, 10 October 2011,
http://www.sra.org.uk/solicitors/freedom-inpractice/OFR/ofr-quick-guide.page.
17 Client care letters practice note, s 5.2.47 (outsourcing
of work), 19 September 2011,
http://www.lawsociety.org.uk/productsandservices/pract
icenotes/clientcareletters/4987.article.

Outsourcing Practice Note, 11 October 2011,

http://www.lawsociety.org.uk/productsandservices/pract
icenotes/outsourcing/5044.article.
18

Colorado State Bar Ethics Opinion 121: Use of Temporary

Lawyers and Other Professionals not Admitted to Practice
in Colorado (Outsourcing), June 2009,
http://www.cobar.org/index.cfm/ID/386/subID/25320/CE
TH/.

Ethics of Legal Outsourcing | 15

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