Contract Lawyers Are Outsourcing Too!

As many of you are already aware, the ABA’s Standing Committee on Ethics and Professional Responsibility released an ethics opinion on legal outsourcing this week.

That report is now public on the ABA website thanks to some keen blogger griping by our Slaw friend Ron Friedmann. The key points, as noted by Ron, were:

  • “U.S. lawyers are free to outsource legal work, including to lawyers or nonlawyers outside the country, if they adhere to ethics rules requiring competence, supervision, protection of confidential information, reasonable fees and not assisting unauthorized practice of law.”
  • “Outsourcing can reduce client costs and enable small firms to provide labor intensive services such as large, discovery intense litigation, even though the firms might not maintain sufficient ongoing staff to handle the work, according to a new ethics opinion issued today.”
  • “Depending on the level of supervision contemplated by the outsourcing lawyer, it might be necessary to obtain informed client consent before engaging outside assistance.”

None of these items are all that new. Just a bit of confirmation to what I think most considered common sense. But where I would like to point your attention is to Lisa Solomon’s post from yesterday that reminds us of a much broader concept of outsourcing, and how it’s not just for sending work overseas. Legal outsourcing also applies to the Contract Lawyer down the street!

I tend to believe we’re only seeing the beginnings of the LPO models to come. Outsource to India? Sure, but what about outsourcing to Canada (when and) if our dollar ever drops again? It wasn’t so long ago that US firms or businesses could have had a 25-30% fee discount by engaging lawyers north of the border.

Here’s another one… Back when I posted about the concept of Virtual Law Offices, I mentioned the premise of a metropolis-hinterland approach to lawyering. Now, what if rather than building these social classes of lawyers within law firms, that a firm took a complete outsourcing approach? They retained an entire team of contract lawyers to execute each element of the required services. Each contracted lawyer would be an expert in a tightly defined niche, and firms could cherry-pick from a team of experts for each engagement. The effect on solos and small firms, especially those with specialized skill sets, could be huge.

All I can say is get ready folks, this ride’s only started. :)

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Comments

  1. Steve, I think it’s a matter of when, not if, this happens. Year by year, the traditional law firm structure is going to have a tougher time justifying itself as a competitive business model, and only the highest of the high-end operations are going to be able to do that. There’ll always be brick-and-mortar, marble-and-glass law firms — there’s just going to be remarkably fewer of them than there are today.

  2. Rather than an attack on Biglaw, I was thinking more about a wider model of engagement. More solos and specialists, who may fly under their own banner, but also being able to take part in larger teams.

    You may be right about less larger firms, but not sure I see outsourcing as the culprit. If anything, outsourcing reduces overhead, plus the work can marked up. So as long as there are massive file that needs lots of bodies (and someone must be trusted to coordinate efforts), and outsourcing continues to be a profit driver… is this still a threat? … If the CCs and GCs take the work back in-house, I suppose.

    I have to think Biglaw could also use teams of contract lawyers as a transitional method for their future evolution. For select situations and ‘special needs’ files at first, but then expanding.

  3. Im from India. How do you react to Obama’s speech regarding taxing companies which outsource?

    LPO has already started in India. Big MNCs have already started to outsource their legal work.