OUTSOURCING LEGAL WORK, PART II: Duty of Competence

The increasing practice of legal outsourcing by in-house counsel as well as small, mid-sized, and large law firms, has led the ABA to propose changes to Model Rules that pertain specifically to outsourcing.

This series of Blog Posts will describe current trends and ethical issues that are affected by legal outsourcing. Some of the ethical issues include:

• Competence
• Unauthorized practice of law
• Adequate supervision
• Client confidentiality and Consent
• Conflicts of Interest
• Billing

We will begin the series of blog posts by discussing the duty of competence. ABA Model Rule 1.1requires an attorney to provide competent representation to his or her client. The Model Rule further states, “competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”

The issue of competence may arise when a law firm accepts a case for which the firm does not have adequate staffing or a depth of knowledge in the particular area of law; the firm outsources a portion of the legal work. Attorneys using legal outsourcing have a duty to supervise the outsourced work and become competent in all aspects of the representation.

The San Diego Bar Opinion addresses this question directly:

An attorney unfamiliar with the area of law in a case must acquire the knowledge and skill necessary to act competently in the case. The attorney may acquire that knowledge and skill by learning the area of law, associating experienced counsel who already knows the law, or other means suited to the case. Failure to acquire such knowledge can be the basis for sanctions. Overall, the duty to act competently requires an attorney to know whether they can handle a particular case and, if they are unable to do so, the attorney must choose a suitable alternative to protect the client’s interests.

The opinion found that it was permissible for an attorney to outsource research and the drafting of pleadings in a patent case as long as the attorney used the outsourced work to become competent in the case.

However, in order to be able to rely on the outsourced work as a method by which to gain competence in a case, an attorney initially has to evaluate the general quality and reliability or “competence” of the outsourcing company. Several state and local bar opinions such as the Florida Bar Opinion,New York Bar Opinion, L.A. Bar Opinion, ABA Opinion provide detailed analysis on this issue.

Mark Ross, Vice President for Legal Solutions at Integreon, has summarized many of the Bar Opinions to provide law firms with a list of considerations for selecting an outsourcing company. He believes that, “Taking the opinions as a whole, they are useful in that they provide an extended checklist, paraphrased below for U.S. attorneys contemplating outsourcing legal work overseas.” The list below, however, is neither all-encompassing nor compulsory in each and every outsourcing situation.

• Conduct reference checks.
• Investigate the background of the lawyers, non-lawyers and service provider.
• Interview the principal lawyers involved in your matters and assess their educational background.
• Inquire into the LPO company’s hiring practices to evaluate the quality and character of the employees likely to have access to client information.
• Investigate the security of the provider’s 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.

For more information, check out the individual Bar Opinions listed above and the ABA’s latest Proposed Changes to the Model Rules.