Ethical/professional issues raised by LPO

 LPO INDIA
 There is a five major ethical/professional conduct issues raised by LPO that is (1) Unauthorized practice of law by non-lawyers; (2) conflicts of interest; (3) client confidentiality; (4) client disclosure and consent; and (5) billing issues related to outsourcing. The Model Rules of Professional Conduct, the Formal Opinions issued by the ABA Committee on related subjects, and the recent opinion on LPO issued by the NYC Bar.

As is discussed below, the American Bar Association (“ABA”) has addressed the issue of outsourcing in the context of domestic contract attorneys. The ABA recommendations on that subject provide the most useful available starting point for analyzing the ethical implications of LPO.

The only major differences between using a contract attorney in the United States and LPO is that, with LPO, the attorney or paralegal lives in another country and is not licensed to practice law. Otherwise, the two services share many common characteristics.

The American Bar Association (ABA)
The American Bar Association (ABA) has approved the legal outsourcing as long as the parties adhere to ethics rules. The ABA’s Standing Committee on Ethics and Professional Responsibility has issued Ethics Opinion 08-451, which specifies the ethical obligations of lawyers and law firms who opt to outsource legal work.

Outsourcing lawyers are subject to an obligation to render competent legal services, and lawyers supervising other lawyers or non-lawyers in performing legal services are responsible for assuring that the individuals they supervise comply with ethics rules governing lawyers.”

“This is an important opinion,” declares Paul Raschke, Immediate Past Chair of MSBA’s Ethics Committee, “particularly with regard to its emphasis on a lawyer’s supervisory responsibilities when outsourcing work to ensure the preservation of client confidences.
Outsourcing reduces client costs. The Opinion allows outsourcing lawyers to pass along fees to the client, including a reasonable allocation of associated overhead expenses, but “no markup is permitted.” This fee arrangement benefits smaller law firms in particular because it enables them to provide the intensive labor associated with litigation without the cost of additional staff.

Outsourcing lawyers face numerous challenges in assuring competence and overseeing the work of others, notes the ABA, especially when they are separated “by thousands of miles and substantial time differences.” Thus, it recommends that “outsourcing lawyers conduct reference checks and background investigations of lawyer or non-lawyer service providers and any intermediaries.”

The Opinion advise other measures to outsourcing lawyers, such as assessing educational background, security systems and even the premises of the service provider. It also delves into the acquisition of client consent before engaging outside assistance and informed consent. The ABA strongly recommends written confidentiality agreements to avert the risk of a service provider breaching confidentiality.

Finally, the ABA Ethics Committee “acknowledges it lacks authority to express an opinion about whether any particular service provider is engaging in unauthorized practice of law, but cautions that if the service provider is found to be not authorized to practice law, and the outsourcing lawyer facilitated that violation, the outsourcing lawyer will have violated ethical rules.”

“The practice of outsourcing indeed gives rise to a number of interesting ethical issues,” states Courtland “Skip” K. Townsend, Chair of MSBA’s Ethics Committee, “and our Committee looks forward to reviewing and discussing the Opinion and related issues.” The full ABA Ethics Opinion may be found athttp://www.abanet.org/cpr/pubs/ethicopinions.html.
  
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