Law firms and their corporate clients are evaluating options for outsourcing legal services as a strategy for legal cost containment. Embracing the advantages of outsourcing with increasing frequency, many companies are already reaping the benefits of this efficient, cost-effective practice.

While evaluating legal outsourcing options, it is wise to consider the ethical implications of such practices. Three key issues that will arise in this analysis are: avoidance of conflicts, maintaining client confidentiality, and preserving attorney work product and attorney-client privileges. As an overarching issue, you will also want to ensure that an unauthorized practice of law is not undertaken by an outsourced service provider.

Bar committees in Los Angeles County, San Diego County and New York City have all ruled that “lawyers may contract with foreign lawyers not admitted to practice in any jurisdiction in the United States, or with non-lawyers outside the United States, to perform legal work for U.S. clients” without aiding the unauthorized practice of law.1 The Florida Bar has also considered the issue and cited the decisions of Los Angeles County and New York City favorably.2 In NorthCarolina, Proposed 2007 Formal Ethics Opinion 12 states that a lawyer may outsource limited legal work to a foreign lawyer or non-lawyer, provided that the U.S. lawyer properly selects and supervises the foreign assistants, ensures the preservation of client confidences, avoids conflicts of interests, discloses the outsourcing, and obtains the client’s advanced informed consent.

The American Bar Association has also stated that outsourcing legal work to foreign or domestic attorneys is ethically permissible as long as the supervising attorney takes the appropriate steps to ensure that certain ethical obligations are met. In Formal Opinion 88-356.32, the ABA analyzed the ethical implications that arise with the use of temporary lawyers. When outsourcing legal work, supervising attorneys have a duty to avoid conflicts of interest and maintain confidentiality of information relating to the representation of clients.