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ABA’s Ethical Changes for Legal Outsourcing

While many of us were at the beach or otherwise catching up on our summer reading, the American Bar Association (ABA) passed Resolution 105A (providing guidance on lawyers’ use of technology and client development) and Resolution 105B (providing guidance on lawyers’ use of technology and confidentiality).  The ABA realized the growing use of technological advances in everyday legal work and felt the need to clarify the ethical obligations for lawyers. Advancements in technology have clearly and dramatically changed the legal profession in the last decade. Resolutions 105A and B attempt to address the growing concerns members of the legal community were having regarding these advancements.

Not far behind the dramatic technological changes, however, are the changes currently happening regarding legal outsourcing. More and more corporations and firms are learning there are repeatable and non-legal tasks that don’t require a seasoned attorney’s touch, so to speak. As a result, more and more groups are outsourcing these tasks at far more cost-effective billing rates. Appreciating this growing trend, the ABA felt the need to address the ethical concerns with legal process outsourcing.

On August 6th, the ABA passed Resolution 105C, which focuses on the ethical responsibilities when outsourcing legal-related work. The resolution did not revise any of the existing rules, but instead made revisions to some Model Rule comments to address the ethical responsibilities of lawyers engaged in outsourcing.

“The Commission understands that certain outsourcing is controversial in light of the current employment market for lawyers,” the report says. The changes “are neither an endorsement nor a rejection of the practice of outsourcing. Rather, the proposals respond to the existence and continuing growth of these practices and are intended to clarify a lawyer’s obligations in this context.”

The specific revisions that were passed in Resolution 105C include:

  • A new comment to Rule 1.1 on lawyer competence says a lawyer should ordinarily obtain informed consent from the client before retaining outside lawyers, and the lawyer should reasonably believe the outside services will contribute to the competent and ethical representation of the client. The reasonableness of the decision to retain the outside lawyers will depend on factors such as their education and experience, the nature of the services they will be performing, and the legal ethics rules in their jurisdictions, according to the comment.
  • A new comment to Rule on 5.3 on responsibilities regarding nonlawyer assistance says a lawyer may hire nonlawyers outside the law firm, but the lawyer must make reasonable efforts to ensure that the engagement is compatible with legal ethics obligations.
  • A new comment to Rule 5.5 clarifies that lawyers cannot engage in outsourcing when doing so would facilitate the unauthorized practice of law.

While this resolution doesn’t change any of the Model Rules themselves, it does clearly address legal outsourcing in the comments. The ABA is not going as far as supporting the practice of outsourcing, but it realizes that LPO is a growing trend and cannot be ignored. This is probably an understatement too. Seeing how long it took the ABA to address advancements in technology such as email, it’s safe to assume that LPO is not simply a growing trend anymore, but a major part of the way legal work is now being performed.