Companies are often reluctant to have their legal work performed by firms which are outside the United States because of possible negative press and correlative public backlash. At the same time, the largest cost driver in e-Discovery is conducting review. Well, there is good news! At ClayDesk, your data resides either at your data center or our secure private cloud hosted at Amazon and Microsoft. Our offshore JD and LLM legal experts use web based tools such as Relativity, Concordance Evolution, and other platforms to conduct review – resulting in substantial savings!
Nonetheless, many corporations are setting up captive centers, or locating part of their organization’s legal department to locations such as India where labor cost is often 15- 20% of what their U.S. counterparts charge. This is known as legal process outsourcing (“LPO”).
Outsourcing of legal services is a relatively new concept. The first U.S corporation to outsource legal services was GE Plastics in 2001. GE Plastics had its U.S. staff interview and supervise the new offshore employees who were located in Gurgaon, India. These employees were mainly drafting outsourcing agreements and confidentially contracts. Over a two-year period, GE reported saving “nearly $2 million in legal fees that otherwise would have gone to outside counsel.
Another current example of LPO is the Dallas-based law firm of Bickel & Brewer. The first U.S. law firm to open an office overseas, Bickel & Brewer established an office in Hyderabad, India. The project’s founders explained that this was initially a solution to “handling the millions of pieces of information that confront [them] in each case.” This office has since spun off to become a separate entity, Imaging & Abstract International, which handles work for several additional U.S. clients.
Ethics of Outsourcing Legal Work Abroad
Several persons have written about the ethical implications of outsourcing legal activities to counsel not licensed to practice within the jurisdiction. Lawyers may outsource services abroad to a non-lawyer and not break any ethical considerations, as long as the lawyer obtains advance permission from the client, carefully monitors the non-lawyer, and bills the client accordingly. Unique issues are raised in the case of patent filing, because of restrictions emerging from technology export laws. The US Commerce Department allows export waivers for technology, as well as blanket export waivers, to avoid such issues. In fact, blanket export licenses have been obtained by many multinational corporations in order to support their transactions. A recent American Bar Association (“ABA”) opinion resoundingly endorsed the outsourcing of legal tasks. The decision concluded that:
There is nothing unethical about a lawyer outsourcing legal and non-legal services, provided the outsourcing lawyer renders legal services to the client with the ‘legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation,’ as required by Rule 1.1.55.
The ABA went on to note the various benefits that outsourcing can have, from cost reduction, to provision of labor intensive legal services in a time-saving manner, to allowing small firms to compete with larger firms by allowing them access to qualified personnel without having to employ those people full time.
Privacy Issues for Clients
Due to the inherent protected quality of the work engaged in by lawyers, either protected under the Work Product Doctrine or as part of the attorney-client privilege, lawyers are often hesitant to hand over client-related information to outside counsel. Although a client may have agreed and even requested that certain tasks be outsourced as a method of cost control, it is the attorney’s job to make sure that the client is protected from any unauthorized use or distribution of protected materials.
One area that is of particular privacy concern is that of intellectual property or IP.
Intellectual property, by its very nature, must be safeguarded in order to have value. This idea is embodied in U.S. copyright law which only protects things that are not common knowledge or in the public domain. According to U.S. copyright law:
“Copyright protection subsists… in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device”
Privacy Issues for Lawyers
Privacy issues arise not only in regard to client information, but also in relation to firm information. Firms need to identify the types of information that should not be transmitted outside of the business and then establish procedures to prevent such occurrences. LPO providers in turn must also have security measures in place to prevent undesired transmission of protected information.
LPO providers have attempted to secure both firm and client proprietary information through extensive security procedures. At Integreon Managed Solutions (“Integreon”) facilities in Mumbai and Gurgaon, guards search employee belongings to ensure they are not carrying electronic storage devices such as flash drives or laptops. The facility’s computers are not equipped with disc drives, usable USB ports or compact disc burners, and most do not have printing capabilities. These “dedicated delivery centers” are accessible only via fingerprint scan; further, they are continuously monitored by security cameras, and do not store saved data locally.
Rather, the lawyers work directly on the client’s server and only over a secure line or via the Internet.
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