On August 6, the ABA House of Delegates met to vote on many of the changes proposed by the Commission on Ethics 20/20 to the ABA Model Rules of Professional Conduct, and approved changes to the way the Model Rules handle legal process outsourcing (LPO). The modifications made to the Comments on the model rules addressing outsourcing follow.
Rule: "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation."
New comment excerpt: "[T]he lawyer should ordinarily obtain informed consent from the client and must reasonably believe that the other lawyers' services will contribute to the competent and ethical representation of the client." (Comment 6)
Model Rule 1.1 identifies the factors that lawyers need to consider when retaining lawyers outside the firm to assist on a client's matters (i.e., outsourcing legal work to other lawyers). In this case, the accompanying comments update the Rule, and follow the recommendations on both consent and competence in the ABA formal ethics opinion 08-451 and other bar opinions, including New York City Bar Opinion 2006-3 and Florida Bar Opinion 07-2.
Rule: Rule 5.3 explains a lawyer's duty to ensure that the conduct of nonlawyers with whom they work "is compatible with the professional obligations of the lawyer."
New comment excerpt: "When retaining or directing a nonlawyer outside the firm, a lawyer should communicate directions appropriate under the circumstances to give reasonable assurance that the nonlawyer's conduct is compatible with the professional obligations of the lawyer." (Comment 3)
The Commission has approved the use of "nonlawyers outside the firm to assist the lawyer in rendering legal services to the client" (Comment 3). However, as the Report accompanying the revisions to 5.5 further illuminated, the crux of this rule, and the point that the comments go into in more depth, is that lawyers must make "reasonable effort" to ensure that "services are provided in a manner that is compatible with the lawyer's professional obligations" (Comment 3). These obligations vary depending on circumstances and the type of services being provided. Like the expansion on Rule 1.1, this builds on Bar Opinions that have come out in the past few years and summarizes the due diligence obligations mentioned in ABA formal ethics opinion 08-451.
What is relatively new in this comment is the new ethical concept of monitoring that is introduced in Comment 4. In this instance, the Commission has taken a slightly different twist to the duty to supervise that has been mentioned by several state bar opinions. The Commission concluded that there are certain situations where direct supervision is not possible when using nonlawyers outside the firm. Instead this comment clarifies that while direct supervision is not possible, there still remains a duty to monitor the services provided.
Rule: "A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so..."
New comment excerpt: The Commission added one change to this comment that states that "...a lawyer may not assist a person in practicing law in violation of the rules governing professional conduct in that person's jurisdiction." (Comment 1)
Model Rule 5.5 and the accompanying Comments clarify one of the central tenants of legal process outsourcing: lawyers cannot engage in outsourcing when doing so would facilitate the unauthorized practice of law. "When lawyers outsource work to lawyers and nonlawyers, it is important to ensure that those lawyers and nonlawyers are not engaging in the unauthorized practice of law," (Report 6).
While the ethical implications of outsourcing legal services have previously been covered by the ABA in the 2008 Formal Opinion 08-451 and by several state and local bars, this codification, after a three year study on the effect increased globalization and technology has made to the legal industry, represents the evolving legal landscape.