Legal Outsourcing to Offshore Jurisdictions - Part IV
As I noted yesterday, the Committee on Professional and Judicial Ethics of the Bar Association of New York City has released a formal opinion on the outsourcing of substantive legal support work overseas. The formal opinion endorses such outsourcing if certain conditions are met. Yesterday, I outlined the first two conditions. Today, I will discuss the remaining three conditions.
The third condition states that a New York lawyer should avoid conflicts of interest when outsourcing. This should be self-evident!
The fourth condition states that a New York lawyer must bill for any outsourced work appropriately. The NYC Bar Association’s opinion states that, absent a specific agreement with a client to the contrary, a New York lawyer should only charge a client the direct cost of the outsourcing, plus a reasonable allocation of overhead expenses directly associated with providing that service.
The last condition involves client consent. When necessary, the New York lawyer must obtain client consent to outsourcing in advance. The applicability of this condition will depend on whether confidential information will have to be disclosed, the degree of involvement of the overseas lawyer/layperson in the matter, and the significance of the work to be done. For example, a client’s informed consent in advance will be necessary if the person that will be doing the outsourced work is exposed to confidential documents/information or the client expects that only personnel employed by the law firm will be handling their matter.
I have not yet seen any commentaries on outsourcing by bar associations in Canada. However, this may soon change if the outsourcing trend continues and gains momentum here. Some believe that the trend will last only as long as the first egregious breach of client confidentiality occurs.
It remains to be seen if outsourcing/offshoring of substantive work can be employed effectively in the area of trusts and estates. The ever-present emotional element, as well as the large number of mediated settlements, in this niche area may render it forever immune to the lure of outsourcing/offshoring. Of course, I am mindful of the saying “never say never”!
Have a great day!
Bianca La Neve
The third condition states that a New York lawyer should avoid conflicts of interest when outsourcing. This should be self-evident!
The fourth condition states that a New York lawyer must bill for any outsourced work appropriately. The NYC Bar Association’s opinion states that, absent a specific agreement with a client to the contrary, a New York lawyer should only charge a client the direct cost of the outsourcing, plus a reasonable allocation of overhead expenses directly associated with providing that service.
The last condition involves client consent. When necessary, the New York lawyer must obtain client consent to outsourcing in advance. The applicability of this condition will depend on whether confidential information will have to be disclosed, the degree of involvement of the overseas lawyer/layperson in the matter, and the significance of the work to be done. For example, a client’s informed consent in advance will be necessary if the person that will be doing the outsourced work is exposed to confidential documents/information or the client expects that only personnel employed by the law firm will be handling their matter.
I have not yet seen any commentaries on outsourcing by bar associations in Canada. However, this may soon change if the outsourcing trend continues and gains momentum here. Some believe that the trend will last only as long as the first egregious breach of client confidentiality occurs.
It remains to be seen if outsourcing/offshoring of substantive work can be employed effectively in the area of trusts and estates. The ever-present emotional element, as well as the large number of mediated settlements, in this niche area may render it forever immune to the lure of outsourcing/offshoring. Of course, I am mindful of the saying “never say never”!
Have a great day!
Bianca La Neve
