Last summer the Massachusetts Supreme Judicial Court (SJC) made several significant changes to the Massachusetts Rules of Professional Conduct (Mass. R. Prof. C.). Previous posts highlighted some of these changes, including to the Rules pertaining to jury contact following trial and the duty to remain current on technologies which impact the practice of law. The Rule discussed herein relates to a trend often seen in the service sector, and which has over the past years become more prevalent in the legal sector – outsourcing.
According to the American Bar Association, “globalization, technology-driven efficiencies developed and utilized by many providers of outsourced services, and the demand by clients for cost-effective services” are some of the factors that have contributed to the significant growth of outsourcing. Many firms have taken advantage of (or been directed by their clients to take advantage of) lower rates charged by companies which conduct document reviews, provide legal transcriptions, conduct research and process patents. These companies are often located outside of the United States in countries such as India and Malaysia. Several authors have noted that these efficiencies can be attractive to firms by enabling them to better compete for large matters without fear that they lack adequate resources to perform legal work and to clients by bolstering the affordability of legal services.
When lawyers outsource activities traditionally performed by them or their staff, several ethical considerations are implicated, including the protection of privileged and otherwise confidential information, and of course, quality control. See e.g., Mass. R. Prof. C. Rules 1.1 (competence); 1.2 (allocation of authority); 1.4 (communication with client); 1.6 (confidentiality); 5.4(a) (professional independence of the lawyer), and 5.5(a)(unauthorized practice of law).
To protect clients from inadequate representation the American Bar Association provides detailed guidance on the retention of lawyers and non-lawyers from outside the firm setting. See Model Comments 6 and 7 to ABA Model Rule 1.1 and Model Comments 1-4 to Model Rule 5.3. The SJC, clearly concerned about the evolution of lawyering and the growing practice of outsourcing client work followed suit, and adopted the following comments to Mass. R. Prof. C. 5.3:
3. A lawyer may use nonlawyers outside the firm to assist the lawyer in rendering legal services to the client. Examples include retaining an investigative or paraprofessional service, hiring a document management company to create and maintain a database for complex litigation, sending client documents to a third party for printing or scanning, and using an Internet-based service to store client information. When using such services outside the firm, a lawyer must make reasonable efforts to ensure that the services are provided in a manner that is compatible with the lawyer’s professional obligations. The extent of this obligation will depend upon the circumstances, including the education, experience and reputation of the nonlawyer; the nature of the services involved; the terms of any arrangements concerning the protection of client information; and the legal and ethical environments of the jurisdictions in which the services will be performed, particularly with regard to