Client Consent in Outsourcing Context

March 19, 2009

The main reasons for outsourcing legal work, like any other type of outsourcing, are "cost-saving, convenience and efficiency." Those who utilize Indian attorneys also claim that they receive the cost benefits without a loss in quality because Indian attorneys are well educated as India has a common law system and all legal training and work in India is already performed in English. But despite these benefits, a number of considerations prevent firms and businesses from joining the outsourcing bandwagon. "Outsourcing of legal work" has its concerns in a number of unanswered ethics questions. One such question is - whether there is a valid argument that a U.S. law firm is now compelled, or even under a duty to at the very least inform their clients of the "offshore" option for document review?

An ethical obligation of a lawyer is to bill clients reasonably for the legal services performed. An unreasonable or excessive fee cannot be charged. In the context of outsourcing legal work, the ethics of reasonable billing the client by the lawyer for legal services has implications in another ethical obligation i.e. to reasonably consult with the client about the means by which the client's objectives are to be accomplished. In analyzing a lawyer's duty to obtain consent regarding the outsourcing arrangement, an analogy regarding the use of temporary or contract lawyers may be useful. Whether a lawyer would share client confidences and secrets, the amount of involvement of the contract lawyer and the significance of the work performed by the temporary attorney are some of the factors which become important for consideration in the circumstances. Participation by a lawyer whose work is limited to legal research or tangential matters may not press for client consent whereas if a temporary attorney makes strategic decisions or performs other work that the client would expect of the senior lawyers working on the client's matters then there should be disclosure of the nature of the work performed by the contract lawyer and obtain client consent.

Thus a plausible approach could be the extension of the above nuanced approach for temporary lawyers to foreign attorneys putting forth the argument that foreign attorneys often play a limited role in matters than contact or temporary lawyers do. Rather than reflexively informing a client every time that the lawyer intends to outsource legal support services overseas, a set of factors may be set out to apply when deciding when a lawyer needs to inform clients. These factors may include whether the lawyer plays a significant role in the matter, whether the lawyer will share client confidences or secrets, whether the client would except that only firm employees will manage their matter and whether the lawyer plans on billing foreign attorneys in a matter other than cost. [i]

Given some of the future predictions and also the current scenario of the potential of outsourcing legal work there may be a situation when a client expects a law firm to utilize foreign attorneys to cut costs, making disclosure unnecessary based on the extent of the foreign attorney's involvement, the sharing of client confidences and secrets, the reasonable expectations of the client and the method of billing the client.

[i] Woffinden Keith, Surfing the Next Wave of Outsourcing: The Ethics of Sending Domestic Legal Work to Foreign Countries under New York City Opinion 2006-3, Brigham Young University Law Review, 2007.

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