Panel to draft opinion on outsourcing work to India
Panel to draft opinion on outsourcing work to India
‘Our clients are simply attorneys; we do not work for anyone else’
Gary Blankenship
Senior Editor
With several members expressing reservations about the practice, the Bar’s Professional Ethics Committee has set up a subcommittee to draft an advisory opinion on outsourcing paralegal work to India.
The committee, which met June 29 during the Bar’s Annual Convention in Orlando, considered a draft ethics opinion and heard from the attorney requesting guidance as well as the head of the company that would provide the Indian outsourcing.
Committee members said the practice could raise significant questions about competency of the legal work, access to clients and client information, and computer security if documents and information are electronically transmitted to a foreign country.
“The buck stops with the attorney and if you don’t do your job adequately, the issue is going to come back and haunt you in a very difficult way,” said committee member Tim Thomas. “The attorneys have to educate themselves not just that they [the outsourcing provider] are the cheapest, but that they know what they’re doing and they’re going to adequately protect the client.”
Some committee members said lawyers may have to take extra steps because of the potential extra problems.
“I want some indemnification and I want some enforceable indemnification,” said committee member Steven Teppler. “I don’t want to know after the horse has left the barn, because at that point my license is on the line.”
Committee member Carlos Llorente said he thinks the proposed opinion covers the important issues and that lawyers must realize that as in other areas of their practice, they are accountable for actions and results.
“We are ultimately responsible for the work product,” he said. “If we are babes in the woods and silly enough to send out and get back bad product and take responsibility for it, then that’s our problem.”
Other members noted that lawyers have duties — and risks — over confidentiality on such routine functions as sending documents out for printing or copying or hiring an outside company to destroy old client files.
Orlando attorney James Levine, who made the initial inquiry to the committee, said he was looking to outsource paralegal work to help his firm’s immigration practice.
“We wrote the [inquiry] letter because we thought it was an appropriate issue and it could give guidance to all lawyers,” he said.
“We had fully intended to use it as paralegal work; a lawyer would have to review everything,” Levine added. “The problem that concerned us is we would have to give up some sensitive client information, like passport numbers, Social Security numbers. . . .
“I’m trying to keep my costs down; I’m trying to get things done on a timely basis. A lot of what we do is data analysis” that easily can be done overseas.
His inquiry letter to the Bar noted that the Indian lawyers might contact clients to obtain more information and would have remote access to the firm’s computers.
Kiran Chhaganlal, who is licensed to practice in England, India, and Fiji, but not Florida, said he owns the company that would provide the outsourcing.
“Our clients are simply attorneys; we do not work for anyone else,” he said.
While Levine only wants paralegal services, Chhaganlal said his company is capable of providing legal work up to the level that would be provided by a third-year associate in most law firms. He also said it’s set up to address ethical and practical concerns that lawyers will have, including complying with Florida Bar rules.
“We have ourselves an internal compliance and governance scheme set up,” he said. “At the end of the day, we’re here to make life easier for the attorneys and not make more problems for them.”
Bar Unlicensed Practice of Law Counsel Lori Holcomb told the committee that the Standing Committee on UPL considered the proposed advisory opinion and saw no problem relating to UPL. But she said that panel thought some of the opinion’s advice on what lawyers “should” do should be redrafted as things lawyers “must” do to comply with Bar rules.
The proposed advisory opinion on the issue noted that the inquiry raised Bar rule questions of the unlicensed practice of law, supervision of nonlawyers, conflicts of interest, confidentiality, and billing.
On supervision, draft Proposed Advisory Opinion 07-2 said that, “Law firms frequently hire contract paralegals to perform services such as legal research and document preparation. It is the committee’s opinion that there is no distinction when hiring an overseas provider of such services versus a local provider, and that contracting for such services does not constitute aiding the unlicensed practice of law, provided that there is adequate supervision by the law firm.”
But because the paralegal services are provided overseas, that supervision can provide special challenges, the draft opinion noted. It added, “Attorneys who use overseas outsourcing companies should recognize that providing adequate supervision may be difficult when dealing with employees who are in a different country. Ethics opinions from other states indicate that an attorney may need to take extra steps to ensure that foreign employees are familiar with Florida’s ethics rules governing conflicts of interest and confidentiality.”
Those duties include the attorney ensuring personally that no conflicts exist.
On confidentiality, draft PAO 07-2 questioned the inquiring attorney’s plans to give the outsourcing company access to the firm’s computer records.
“The law firm should provide no access to information about other clients of the firm,” the draft opinion said. “The law firm should take steps such as those recommended [in a City of New York Bar Association opinion]. . . to include ‘contractual provisions addressing confidentiality and remedies in the event of breach, and periodic reminders regarding confidentiality.’”
On whether the client should be informed that some legal services are being outsourced overseas, the opinion said, “[A]n attorney should bear in mind factors such as whether a client would reasonably expect the lawyer or law firm to personally handle the matter and whether the nonlawyers will have more than a limited role in the provision of the services. For example, in Opinion 88-12, we stated that a law firm’s use of a temporary lawyer may need to be disclosed to a client if the client would likely consider the information to be material.”
The draft opinion also noted the client may have to be told about the outsourcing as part of the billing process if necessary to explain to the client how the charges were calculated.
“The law firm may charge a client the actual cost of the overseas provider, unless the charge would normally be covered as overhead,” the opinion said. “However, in a contingent fee case, it would be improper to charge separately for work that is usually otherwise accomplished by a client’s own attorney and incorporated into the standard fee paid to the attorney, even if that cost is paid to a third party provider.”
Given the importance of the issue, PEC Chair Skip Smith asked the subcommittee to have its proposed opinion ready when the committee meets again at the Bar’s General Meeting in September. Any opinion adopted by the committee will be published in the Bar News for member comment, and any comments will go back to the committee for its consideration. Anyone who files comments and objects to the committee’s final opinion can then appeal to the Bar Board of Governors.
Any Florida Bar member with comments on the issue may send them the Elizabeth Clark Tarbert, ethics counsel, The Florida Bar, 651 E. Jeffereson St., Tallahassee 32399-2300 or [email protected].
Named to the subcommittee were Jeffrey Pearson, Teppler, Jay Martus, Llorente, Bill Wagner, and Frank Zemel.
