2013년 11월 1일 금요일

Rodrick Gorden's blog ::... the Internet. New Media Rights hopes to offer free legal assistance to [overcoming] many of those barriers when it...






Rodrick Gorden's blog ::... the Internet. New Media Rights hopes to offer free legal assistance to [overcoming] many of those barriers when it...










               In               early               2005               a               company               called               Lexadigm               was               hired               by               an               American               law               firm               to               draft               a               brief               for               a               U.S.

Supreme               Court               case.

The               case               was               complex               and               resource               intensive               and               centered               on               applying               the               Fifth               Amendment's               due               process               clause               to               a               tax               dispute.

The               brief               was               filed               by               the               American               law               firm,               which               will               be               able               to               review               and               use               part,               some,               or               none               of               Lexadigm's               work               in               the               final               product.

The               outcome               was               the               same               as               if               one               of               the               firm's               associates               had               drafted               the               brief;               except               in               this               case               the               lawyers               were               operating               out               of               India.
The               benefits               of               legal               process               outsourcing               come               hand               in               hand               with               complex               ethical               issues               that               demand               discussion.

However,               to               this               point               there               has               been               relatively               little               comprehensive               analysis               of               the               ethical               issues               inherent               in               the               utilization               of               foreign               lawyers               for               domestic               legal               work.

Lexadigm's               work               on               a               Supreme               Court               case               is               an               example               of               the               decade-old               development               in               offshoring:               legal               process               outsourcing.

"Legal               Process               Outsourcing"               is               not               a               phrase               commonly               heard               in               public               discourse.

The               concept               of               outsourcing               aspects               of               legal               process,               ranging               from               simple               tasks               like               legal               coding               to               more               complex               projects               such               as               legal               research,               is               provocative.

Initially               the               idea               is               often               met               with               the               question:               "Is               that               even               legal?"               This               almost               intuitive               reaction               is               reflective               of               the               overwhelming               public               unawareness               of               the               role               non-lawyers               play               in               our               legal               system.

In               the               last               ten               to               fifteen               years               this               role               has               been               increasing               .

Law               firms               and               large               corporations               have               been               contracting               or               in               other               terms,               "outsourcing               domestically"               different               aspects               of               the               legal               process               to               legal               consulting               firms               and               other               specialized               vendors.

In               2005               the               phase               "legal               process               outsourcing"               (LPO)               was               coined               to               refer               to               the               specific               phenomenon               of               offshore               contracting               of               services               related               to               the               legal               process               to               foreign               lawyers,               predominantly               in               India               .

Since               2005               this               budding               industry               has               grown,               with               over               100               LPO               companies               working               for               large               law-firms,               in-house               legal               departments,               and               corporations.

According               to               a               2007               report               by               Valuenotes,               a               research               company               specializing               in               offshoring,               the               industry               generated               revenue               of               $146               million               in               2006               .

Driven               by               the               increasing               cost               of               legal               services               and               demand               for               efficiency               and               cost               savings,               LPO               conceptualizes               the               legal               services               industry               using               business               terms.
               From               BPO               to               KPO               to               LPO
               Outsourcing               is               not               a               new               phenomenon.

Driven               by               a               global               market               and               the               temptation               of               cheaper               labor,               the               industry               took               off               in               the               late               1980's               with               the               rise               of               outsourcing               manufacturing               jobs               abroad.

Momentum               built,               and               off-shoring               practices               expanded               to               include               the               industrial               sector.

Eventually,               with               the               rapid               increase               in               telecommunication,               Internet               and               information               technology,               the               road               was               paved               for               the               "second               wave"               of               outsourcing               of               "white-collar               jobs."Typically               termed               Business               Process               Outsourcing               (BPO)               this               second               wave               refers               to               the               contracting               of               specific               business               tasks               to               a               third-party               service.

The               tasks               usually               serve               a               supporting               role               and               are               not               crucial               for               the               company               to               maintain               its               position               in               the               market               place.

In               this               context               there               is               often               a               demarcation               between               "back-office"               outsourcing,               which               generally               refers               to               internal               functions               such               as               billing               or               purchasing,               and               "front-office"               which               refers               to               more               customer               related               services               such               as               marketing               and               technology               support.

The               "front               office"               category               of               BPO               is               often               associated               with               call               and               other               communication               centers.

BPO               is               most               commonly               done               from               U.S.

and               U.K.

markets               to               countries               such               as               India,               South               Africa,               and               the               Philippines               .
               Within               Business               Process               Outsourcing               is               the               specialized               subset               of               Knowledge               Process               Outsourcing               (KPO).

KPO               broadly               refers               to               "legal               and               financially               complex               business               process               outsourcing."               The               idea               of               "process"               in               relation               to               KPO               cannot               be               defined               in               terms               of               normal               associations               of               a               process               being               standardized,               commoditized,               or               easy               to               replicate.

Instead,               KPO               refers               to               a               value-added               form               of               outsourcing               that               involves               low-level               decisions               that               require               a               certain               level               of               expertise,               including               language               skills,               higher               education,               and               often               specific               credentials               .

Sometimes               referred               to               as               "judgment               based               BPO,"               KPO               includes               processes               within               information               technology,               businesses               intelligence,               clinical               research,               and               the               rapidly               growing               sector               of               legal               services.
               Legal               Process               Outsourcing               refers               to               the               offshoring               of               different               elements               in               the               legal               process               by               law-firms,               corporations,               and               "in-house               legal               departments"               (mainly               in               the               U.S.

and               U.K.)               to               offshore               centers               (mainly               in               India).

A               report               issued               in               December               2005               and               updated               in               July               2007               by               the               research               company               ValueNotes,               estimated               revenue               from               LPO               at               $146               million               in               2006               and               projects               they               will               grow               to               $640               million               by               2010.

According               to               ValueNotes,               LPO               firms               in               India               employed               around               7,500               people;               a               figure               that               increased               to               32,000               by               the               end               of               2010               .
               On               the               more               conservative               side,               a               report               released               in               January               2006               by               Evalueserve,               a               research               and               outsourcing               company,               estimated               lower               statistics               and               projected               more               moderate               growth.

Evalueserve               estimates               the               current               number               of               employees               providing               legal               services               to               the               U.S.

from               India               at               only               1,300,               and               projects               it               will               grow               by               5,200               in               December               2010,               and               16,000               by               December               2015.

Evaluserve               estimates               revenue               of               approximately               $56               million               from               2005,               and               projects               it               will               increase               to               $960               million               in               2015.

Evalueserve               correlates               this               growth               with               the               expected               growth               of               the               legal               services               industry               in               the               United               States.

When               grounded               with               the               increases               in               the               U.S.

market,               Evalueserve               concludes               that               by               2015               only               1.2%               of               jobs               will               be               off-shored               and               constitute               only               .2%               of               the               total               revenue               of               the               U.S.

legal               services               industry               .
               The               range               of               statistics               indicates               the               difficulty               in               measuring               the               emerging               industry               accurately               and               leaves               the               truth               most               likely               located               somewhere               in               the               middle.

Despite               the               disparity               in               numbers,               the               overarching               trend               of               projected               growth               demonstrates               legal               process               outsourcing               has               become               a               legitimate               sector               and               will               continue               to               grow               in               the               future.
               What               is               being               outsourced?
               "Short               of               anything               where               you               have               to               physically               be               there               or               sign               on               the               dotted               line,               we               can               do               it."               -               Sanjay               Kamlani,               Co-               chief               executive               officer               of               Pangea3
               A               key               question               in               discussing               the               ethics               of               LPO               is:               "What               is               being               outsourced?"               The               answer               ranges               from               simple               legal               coding               to               highly               technical               patent               applications.

The               wide               range               of               activities               has               implications               for               LPO               in               terms               of               the               level               of               training               required,               efficiency               and               value               of               the               processes,               liability               and               security               concerns,               and               may               raise               issues               regarding               specific               legal               restrictions.
               Legally,               anyone               who               is               not               a               registered               lawyer               in               the               U.S.

cannot               give               legal               advice               nor               do               anything               that               would               constitute               "practicing               law."               This               has               typically               restricted               LPO               firms               from               supplying               "core"               functions               such               as               legal               opinions,               judgments,               or               crucial               communications               with               clients.

LPO               firms,               however,               do               perform               a               variety               a               non-core,               manpower               intensive               functions               such               as               legal               transcription,               document               conversion,               legal               data               entry,               legal               coding               and               indexing               .

Within               "non-core"               functions,               there               still               exists               a               great               range               of               processes               LPO               firms               may               offer.

As               a               starting               point,               these               basic               LPO               services               can               be               categorized               as               "low-value"               work.

Evalueserve               categorizes               this               work               as               "Electronic               Document               Management"               and               estimates               a               majority               of               Indian               researchers               are               engaged               in               this               type               of               LPO.

Increasingly               there               has               been               a               demand               for               legal               research,               contract               drafting,               and               work               related               to               intellectual               property               rights,               which               is               categorized               as               "high-value."               The               "high-value"               category               is               distinct               from               "low-value"               aspects               of               LPO               and               BPO               because               the               services               require               substantial               domain               knowledge,               a               deep               understanding               of               the               law,               and               have               a               certain               qualitative               nature               .

These               categories               can               be               divided               into               six               types               of               services:
               Research               Services:               Services               include               statutory               and               case               law               research,               much               of               which               can               now               be               done               via               electronic               databases.
               Due               Diligence               Services:               Due-diligence               refers               to               the               large               amount               of               data               lawyers               must               examine               to               verify               legal               and               financial               status               of               companies               for               mergers               or               acquisitions.

This               work               involves               sifting               though               data,               confirming               supplier               agreements               and               checking               company               books,               board               resolutions               and               other               documents               to               ensure               there               are               no               "surprises."
               Contract               Drafting               and               Proof               Reading               of               Contracts:               Drafting               includes               employee               contracts,               non-disclosure               agreements,               licensing               agreements,               supplier               agreements,               lease               agreements,               vendor               agreements,               and               distributor               agreements.

Many               of               these               agreements               follow               a               standard               template,               enabling               foreign               lawyers               to               produce               a               draft               that               can               later               be               reviewed               and               modified               by               a               U.S.

attorney.

Foreign               lawyers               can               also               proofread               and               double               check               documents               to               make               sure               they               comply               with               the               guidelines               of               the               client.
               Document               Discovery               in               Litigation:               Foreign               lawyers               can               assist               in               "document               discovery,"               a               process               in               which               lawyers               must               review               large               amounts               of               data               in               preparation               for               a               case,               often               under               pressure               to               meet               a               deadline.

In               this               period,               outsourcing               can               help               firms               negotiate               the               problem               of               having               to               either               work               overtime               or               hire               temporary               staff.
               Intellectual               Property               Services:               This               category               represents               one               of               the               riskiest               and               fastest               growing               sectors               in               LPO.

A               patent               application               usually               includes               the               following:               prior               art               searching,               drafting               background,               drafting               specifications,               drafting               claims,               drafting               summary,               preparing               drawings,               final               review               and               modifications               for               filing.

Only               the               final               review               must               legally               be               performed               by               an               attorney               registered               with               the               United               States               Patent               and               Trademark               Office               (USPTO).

Depending               on               clients'               preference,               LPO               firms               can               have               varying               degrees               of               responsibility               for               preparing               drafts               of               patent               applications.

The               patent               industry               is               in               such               high               demand               because               it               requires               time-consuming               repetitive               research.

Many               law               firms               cannot               process               the               growing               number               of               applications               at               prices               their               clients               are               willing               to               pay               and               are               forced               to               change               their               strategy               .

In               addition,               an               LPO               company               is               able               to               employ               not               only               lawyers,               but               also               engineers               to               work               on               drafts.

Increased               specialization               and               a               broader               range               of               expertise               offers               yet               another               advantage               with               LPO.
               Creative               Innovations
               In               addition               to               the               typical               tasks               associated               with               the               legal               service               industry,               several               LPO               companies               are               carving               out               their               own               niche               in               the               market.

By               combining               superb               information               technology               (IT)               with               legal               process               outsourcing,               companies               like               Pangea3               are               creating               a               new               products               they               call               "legal               solutions"               or               "Contract               management               and               analytics               applications."               For               example,               Pangea3               had               a               client               whose               general               counsel               was               being               flooded               by               calls               regarding               difficult               legal               questions               related               to               the               company's               different               software               and               procurement               contracts.

As               a               solution,               Pangea3               reviewed               the               contracts               and               produced               a               database               containing               a               set               of               answers               to               recurrent               questions.
               Models               of               Outsourcing:               The               Indian               Appeal
               There               is               a               smattering               of               countries               around               the               globe               involved               in               LPO,               however,               the               industry's               offshoring               destination               originated               and               remains               concentrated               in               India.

This               holds               true               for               a               number               of               reasons.

India               maintains               a               large               and               highly               skilled               work               force               with               strong               English               language               capabilities.

In               addition,               Indian               lawyers               have               the               built               in               advantage               of               a               similar               legal               system               based               on               British               common               law               and               many               have               additional               training               in               U.S.

law.

LPO               also               holds               appeal               for               professionals               in               India.

Approximately               80,000               Indian               lawyers               graduate               each               year               .

For               many               of               these               lawyers,               legal               process               outsourcing               is               a               promising,               profitable,               and               challenging               alternative               to               the               Indian               legal               market.

Similar               to               the               American               system,               the               Indian               legal               market               is               dominated               by               competitive               law               firms               where               advancement               can               be               a               tedious               process               over               a               period               of               years               .
               Although               LPO               remains               concentrated               in               India,               the               structure               and               onshore/offshore               relationship               between               client,               legal               firms,               and               LPO               firms               varies.

There               are               four               main               models               LPO               firms               typically               develop               and               operate               under.

Each               model,               as               outlined               by               Evalueserve,               has               specific               implications               and               ethical               concerns               that               must               be               considered               in               regard               to               the               level               of               supervision               between               the               U.S.

attorney               and               foreign               lawyer.
               Captive               Centers:               This               model               is               formed               when               a               large               corporation               starts               its               own               center               in               foreign               country               responsible               for               its               legal               and               business               processing               issues.

In               early               2005               General               Electric               became               one               of               the               first               companies               to               set               up               a               captive               center.

They               did               so               by               to               employing               Indian               lawyers               at               its               center               in               Guragon,               India.

Now               there               are               almost               30               lawyers               at               the               center               responsible               for               supporting               the               majority               of               legal               work               of               the               company               .

In               this               model,               the               ethical               responsibility               falls               mainly               on               the               company               that               is               hiring               the               foreign               lawyers,               and               the               American               lawyers               responsible               for               supervising               their               work.

Some               issues               may               arise               in               regard               to               disclosure,               as               many               companies               may               not               want               to               reveal               they               are               offshoring.
               Captive               Centers               formed               by               U.S./               U.K.

firms               and               their               subsidiaries:               Indian               laws               currently               do               not               allow               foreign               law               firms               to               practice               in               India.

As               a               result,               some               law               firms               in               the               U.S./               U.K               are               working               with               firms               to               India               to               set               up               subsidiaries               to               provide               legal               and               paralegal               services               for               export               purposes               only.

For               example,               Fox               &               Mandal               and               ALMT               Legal,               two               Indian               based               law               firms,               teamed               up               with               Patent               Metrix,               an               Irvine-California               based               law               firm               .

Ethical               responsibility               in               this               model               is               similar               to               the               Captive               Center               in               that               the               U.S./               U.K.

law               firm               is               substituted               in               replace               of               the               company.
               Joint               Ventures               by               U.S./               U.K.

based               firms:               In               this               model               a               U.S./               U.K.

law               firm               will               enter               into               a               venture               with               a               LPO               firm               in               India.

An               example               of               this               new               model               is               the               announcement               by               Clifford               Chance               in               2006               that               it               would               be               setting               up               the               world's               largest               offshoring               initiative               by               a               global               law               firm               in               conjunction               with               Integreon               Managed               Solutions               .

Again,               the               ethical               responsibility               falls               on               the               U.S./               U.K               law               firm               to               supervise               and               maintain               the               security               of               all               information               shared.

In               addition,               there               are               issues               of               disclosure               and               passing               on               cost               saving               to               clients.
               Third               Party               Vendors               Providing               Services               to               Law-Firms               and               In-house               Corporate               Attorneys:               This               is               the               model               that               typically               comes               to               mind               when               legal               process               outsourcing               is               discussed.

In               this               model,               a               law               firm               or               in-house               legal               department               for               a               company               will               hire               a               third               party               provider               (i.e.

a               LPO               company)               with               trained               lawyers               and               non-lawyers               to               complete               a               task.

Examples               of               the               top               LPO               companies               of               2008,               according               to               the               Black               Book               of               Outsourcing,include               LawScribe.

Clutch               Group,               CPA               Global,               Integreon,               and               Mindcrest               .

This               model               raises               ethical               responsibility               issues               for               the               law               firm               that               is               using               the               LPO               company,               but               also               for               the               LPO               companies               itself.

Complicated               and               new               ethical               issues               surround               the               LPO               firms               in               regard               to               conflict               of               interest               and               the               ethical/legal               responsibility               of               U.S./               U.K,               lawyers               working               for               the               LPO               firm.
               Benefits               and               Drawbacks
               "Why               have               a               $300-per-hour               lawyer               do               due-diligence               when               it               can               be               done               [more               cheaply]               by               someone               else?"               -               Ajay               Raju,               Reed               Smith               L.L.P
               In               1995               Bickel               &               Brewer               became               the               first               American               law               firm               to               open               an               office               in               Hyderabad,               India.

Co-founder               and               managing               partner,               Bill               Brewer,               recalls               going               out               to               lunch               with               an               Indian               relative:
               "We               were               looking               for               new               ways               to               be               more               efficient               in               handling               the               millions               of               pieces               of               information               that               confront               us               in               each               case.

I'm               not               sure               how               it               came               out               the               conversation,               but               somewhere               a               light               went               off.

I               asked,               'You               can               have               a               lawyer               for               how               much               an               hour               in               India?'               He               said,               'Two               dollars               an               hour.'               We               didn't               make               it               to               dinner               before               we               were               setting               up               the               subsidiary               in               India."
               In               2005-6,               Indian               lawyers               charged               $40-$60               an               hour               for               work               their               American               counterparts               would               normally               bill               at               $120-$300               .

This               produces               an               average               savings               of               30-70%,               according               to               the               Associated               Chambers               of               Commerce               and               Industry               of               India               (ASSOCHAM).

The               savings               increases               with               the               complexity               of               the               job,               leading               to               huge               cost               savings               in               patent               research,               intellectual               property               and               other               information               technology               sectors.

A               thankful               CEO               wrote               to               the               LPO               Company               SDD               Global,               "Your               group               saved               us               90%               and               completed               the               work               in               less               than               half               the               time.

For               clarification,               the               research               you               did               in               less               than               one               month               saved               us               over               $200,000."               Efficiency               is               also               increased               by               the               "time-zone"               advantage,               which               allows               Indian               lawyers               to               begin               working               as               their               U.S.

employers               are               going               to               bed.

In               the               morning,               U.S.

employers               can               review               documents               produced               while               they               were               sleeping.

This               reduces               the               response               time               and               has               huge               advantages               for               tasks               operating               under               a               strict               deadline,               like               legal               research               and               document               discovery               .

Offshoring               also               presents               a               cost-efficient               alternative               to               the               "fast               or               famine"               situation               many               law               firms               face.

In               this               situation               law               firms               are               faced               with               the               dilemma               of               having               either               too               much               work               or               not               enough.

With               LPO,               firms               are               able               to               hire               additional               support               when               needed               instead               of               either               keeping               unnecessary               staff               on               their               payroll               or               working               overtime               .

This               practice               has               been               common               domestically               with               the               hiring               of               temporary               lawyers               or               paralegals               for               large               projects               that               need               to               be               completed               in               a               short               time,               but               offshoring               introduces               increased               savings.
               In               addition               to               pure               efficiency               there               are               other               benefits               to               offshoring.

Lawyers               are               able               devote               more               time               to               larger               and               more               complex               cases               since               they               are               not               bogged               down               in               tedious               paper               work.

"It               gives               me               more               time               to               do               other               things,"               says               Rishi               Varma,               general               counsel               for               Trico               Marine               Services,               a               company               that               has               used               the               LPO               Company               Pangea3               .

Offshoring               can               also               lead               to               higher               quality               in               the               final               product,               as               Indian               lawyers               are               able               to               spend               more               time               drafting               a               document,               which               is               ultimately               reviewed               by               an               experienced               U.S.

attorney.

This               also               allows               for               U.S.

lawyers               and               paralegals               to               move               up               the               value               chain,               spend               more               time               face-               to               -face               time               with               clients,               and               provide               a               broader               range               of               services               .
               Despite               the               benefits,               there               are               some               complicating               factors               that               arise               with               LPO.

Training               differences               between               Indian               and               American               law               schools               and               styles               of               English               can               be               present               complications               and               at               times               an               awkward               learning               curve.

There               are               the               also               increased               difficulties               in               managing               and               supervising               foreign               attorneys               that               may               detract               from               the               overall               time               saved.

Furthermore,               outsourcing               is               a               highly               sensitive               and               risky               political               issue               that               many               law               firms               and               corporations               are               concerned               may               led               to               negative               publicity               .

Of               the               many               Fortune               500               companies               such               as               Bayer,               General               Electric,               Oracle,               Cisco               and               Microsoft               who               do               utilize               offshoring,               few               are               willing               to               speak               candidly               about               the               fact               .

Finally,               the               overwhelming               reasons               cited               for               resistance               to               offshoring               are               ethical               considerations               and               liability               concerns.
               "I               do               have               concern               about               confidence,               confidentiality,               privacy,               conflict               of               interest,               ethical               values,               and               those               are               issues               that               are               a               real               concern."
               -               Jerome               Shestack,               former               President               of               the               American               Bar               Association
               The               overarching               ethical               issue               of               legal               process               outsourcing               is               the               problem               of               the               unauthorized               practice               of               law               (UPL).

American               Bar               Association               Model               Rule               of               Professional               Conduct               5.5               (a)               states:               "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."Section               5.5               (b)               further               elaborates               that               a               lawyer               that               is               not               admitted               to               practice               in               this               jurisdiction               shall               not:
               Establish               an               office               or               other               systematic               and               continuous               presence               in               this               jurisdiction               for               the               practice               of               law.

Hold               out               to               the               public               or               otherwise               represent               that               the               lawyer               is               admitted               to               practice               law               in               this               jurisdiction.

The               reasoning               behind               UPL               is               that               "limiting               the               practice               of               law               to               members               of               the               bar               protects               the               public               against               rendition               of               legal               services               by               unqualified               persons."               Although               the               definition               and               terms               of               ABA               Model               Rule               5.5               may               seem               to               explicitly               outlaw               offshoring,               the               nuance               is               in               the               phrase               "practice               of               law."               What               exactly               does               "practicing               law"               mean               and               how               is               it               different               from               provision               of               law-related               supporting               services               by               non-lawyers               such               as               paralegals               and               law               students?
               In               this               regard               there               is               one               point               of               consensus               that               has               emerged               through               multiple               opinions               from               different               State               Bar               Associations:               under               no               circumstance               may               a               foreign               lawyer               be               contracted,               in               relation               to               LPO               firms               or               in               any               context,               to               represent               a               client               in               Court               .

However,               using               this               point               of               agreement               as               a               jumping               off               point,               there               remains               a               great               deal               of               confusion               and               complex               issues               to               work               through.

The               best               domestic               analogy               to               offshoring               is               temporary               contracting.

Law               firms               have               been               contracting               legal               services               to               domestic               companies,               firms,               specialized               lawyers               and               non-lawyers               increasingly               over               the               past               fifteen               years.

In               response               to               growing               concern               over               the               practice,               in               1988               the               American               Bar               Association               (ABA)               issued               Formal               Ethics               Opinion               88-356               to               address               the               use               of               temporary               lawyers               and               in               1995               the               ABA               Commission               on               Non-lawyer               Practice               produced               a               report               and               recommendations.

The               concerns               raised               in               relation               to               domestic               contracting               of               quality               assurance               and               supervision,               conflicts               of               interest,               attorney-client               privilege               and               confidentiality,               disclosure               and               client               consent               are               comparable               to               the               dilemmas               of               offshoring.

Based               on               the               proclamations               made               on               domestic               outsourcing,               it               is               fair               to               extrapolate               that               offshoring               is               legal               in               theory,               but               also               dependent               on               the               nature               of               the               services               being               outsourced               and               the               structure               and               degree               of               supervision               in               the               relationship.

The               burden               is               on               the               U.S.

attorney               engaged               to               ensure               offshoring               meets               these               standards               and               that               he/she               does               not               participate               in               aiding               unauthorized               and               therefore               illegal               practice               of               the               law               .
               Quality               Assurance               and               Supervision
               "Ensure               that               the               outsourcing               company               assists               a               California               Attorney               in               practicing               law,               NOT               the               other               way               around."
               Offshore               Legal               Outsourcing:               The               Ethical               Implications               Handout,               
               Distributed               as               part               of               a               seminar               organized               by               LawScribe,               Inc.
               In               2006               the               New               York               Bar               Association               opined               that               foreign               lawyers               who               are               not               certified               to               practice               law               in               the               United               States               are               legally               "non-lawyers."               In               this               regard,               Rule               5.3               of               the               ABA               Model               Rules               requires               lawyers               have               a               "direct               supervisory               authority"               over               a               non-lawyer               employed               and               the               lawyer               must               make               reasonable               efforts               to               ensure               that               the               non-lawyer's               conduct               is               "compatible"               with               the               professional               obligations               of               the               lawyer               .

In               taking               these               two               opinions               together,               it               would               be               logical               to               extrapolate               that               a               U.S.

attorney               assumes               supervisory               responsibilities               .

However,               it               is               still               not               completely               clear               how               these               rules               apply               to               foreign               lawyers               who               have               been               hired               directly,               or               through               a               separate               business.

According               to               Mark               Tuft,               a               legal               ethics               scholar:
               "The               difficulty               lies               in               instituting               measures               that               give               reasonable               assurance               that               foreign               lawyers               will               conform               to               the               rules               of               professional               conduct               applicable               to               the               domestic               law               firm               and               that               the               conduct               of               foreign               non-lawyer               assistants               will               be               compatible               with               the               U.S.

lawyer's               professional               obligations."
               Foreign               lawyers               technically               have               no               legal               obligation               to               American               laws.

The               ethical               standards               they               are               bound               by               may               differ               from               U.S.

standards               at               crucial               points;               for               example,               client               confidentiality.

Furthermore,               there               is               a               practical               difficulty               in               providing               adequate               supervision               over               an               employee               working               in               another               country.
               The               2006               New               York               Bar               Association               Opinion               did               not               state               that               a               U.S.

attorney               working               with               foreign               lawyers               or               non-lawyers               was               responsible               to               ensure               compliance               with               the               Disciplinary               Rules               of               New               York,               but               it               did               imply               obligations               of               supervision.

These               include               the               responsibility               for               the               U.S.

lawyer               to               ensure               non-lawyers               are               competent               to               perform               the               tasks,               uphold               standards               of               confidentiality,               and               take               reasonable               measures               to               ensure               they               do               not               violate               New               York               code               .
               Confidentiality
               "At               SDD               Global,               secured,               hack-proof               IBM               servers               and               the               latest               Cisco               ASA               firewall               are               used               to               protect               data               and               systems               from               internet               vulnerabilities.

Even               more               protection               is               provided               by               a               Linux               environment               throughout               the               offices.

Electronic               access               control               is               provided               for               all               areas               of               the               building,               such               that               no               one               is               able               to               enter               any               floor               or               project               area               without               being               specifically               authorized               to               do               so,               and               without               a               custom-made               electronic               access               card.

The               offices               are               virtually               paperless,               and               passwords               are               required               for               all               data               access."               -               Russell               Smith,               Chairman               of               SDD               Global               Solutions
               Confidentiality               is               a               fundamental               principle               of               a               client-lawyer               relationship.

ABA               Model               Rule               1.6               addresses               the               issue,               and               a               further               comment               on               the               rule               explicitly               states               that               a               lawyer               must               act               to               safeguard               unauthorized               information               from               lawyers               or               other               people               under               the               lawyer's               supervision               that               may               be               working               on               the               case               .

Offshoring               presents               specific               challenges               to               confidentiality               in               terms               of               security               of               connection               and               legality               of               transferring               information.

For               some               back               office               or               "vanilla               tasks,"               like               document               review,               it               is               possible               for               companies               to               upload               documents               on               a               secure               Intranet               site,               have               foreign               lawyers               work               on               it,               and               then               return               it               to               the               client.

In               this               case               the               foreign               lawyers               only               need               limited               information               and               do               not               need               to               know               the               larger               context               of               the               case               .

However,               with               the               trend               toward               complex               patent               drafting               and               legal               research,               it               is               necessary               for               foreign               lawyers               to               be               privy               to               more               information.

Patent               applications               can               be               especially               tricky               because               there               exist               laws               that               regulate               what               technology               can               be               shipped               abroad               without               a               license               .

One               way               to               deal               with               these               issues               is               to               not               share               any               confidential               information               when               outsourcing               and               instead               include               hypothetical               anecdotes               to               steer               the               researcher.

Despite               these               measures               (which               can               be               limiting               to               quality               and               are               by               no               means               foolproof)               there               remain               real               concerns               of               the               security               of               any               transaction               over               the               Internet.

Security               concerns               will               continue               to               be               a               limiting               factor               to               the               complexity               of               work               that               is               offshored.
               Disclosure               and               Client               Consent
               The               sensitivity               of               information               involved               in               much               of               the               work               being               outsourced               is               a               natural               transition               to               the               ethical               issue               of               disclosure               and               client               consent.

ABA               Model               Rule               7.5(d)               "articulates               the               underlying               policy               that               a               client               is               entitled               to               know               who/what               entity               is               representing               the               client"               Although               this               suggests               full               disclosure               would               be               necessary,               it               is               not               clear               how               the               duty               to               inform               should               actually               work               in               application.

To               explore               the               application               further,               it               is               helpful               to               delve               into               a               hypothetical               scenario               that               was               recently               analyzed               in               an               opinion               by               the               San               Diego               County               Bar               Association.
               In               the               scenario               two               lawyers               in               California               were               contracted               by               a               business               to               defend               a               complex               intellectual               property               dispute.

Both               attorneys               had               limited               experience               in               the               field,               but               they               took               the               case               and               assured               the               client               they               would               be               able               to               handle               it.

Without               informing               the               client,               the               attorneys               contracted               on               an               hourly               basis               with               Legalworks,               an               LPO               firm               in               India.

The               attorneys               reviewed               the               work,               signed               all               documents,               and               proceeded               as               counsel               in               court.

They               billed               the               client               for               the               work               done               by               Legalworks               under               the               broad               category               of               "legal               research"               and               "preparation               of               pleadings."               The               client               won               the               case               and               inquired               as               to               how               the               attorneys               developed               the               case               and               were               able               to               do               it               so               inexpensively.

The               attorneys               informed               the               client               that               virtually               all               work               had               been               done               by               Legalworks.
               The               analysis               of               this               hypothetical               situation               by               the               San               Diego               Bar               Association               aligns               with               opinions               by               other               bar               associations               in               concluding               that               if               the               work               which               is               to               be               performed               by               the               outside               service               is               within               the               client's               "reasonable               expectation               under               the               circumstances"               that               it               will               be               performed               by               the               attorney,               the               client               must               be               informed               when               the               service               is               "outsourced."               The               inclusion               of               a               "reasonable               expectation,"               threshold               is               helpful,               but               also               leaves               room               for               a               great               deal               of               interpretation.

"Reasonable               expectation"               is               not               a               concept               that               can               be               permanently               defined               and               instead               takes               on               a               fluid               movement               dependent               on               changing               circumstance               and               norms.

At               this               time,               the               decision               has               been               interpreted               to               mean               that               for               all               services,               with               the               exception               of               "back               office"               processes,               the               client               should               be               consulted               and               consent               to               an               offshoring               agreement               .

This               requirement               is               further               colored               by               the               nature               of               the               work               being               offshored               and               the               level               of               supervision               between               the               lawyer               and               offshoring               company               .

In               practice,               LPO               and               law               firms               operate               under               a               working               guideline               that               relates               disclosure               to               the               level               of               supervision               and               type               of               work               being               offshored
               Fee               Sharing
               The               ethics               of               disclosure               become               even               more               pronounced               when               discussing               fee               sharing.

Although               the               law               firm               is               most               likely               saving               significantly               from               offshoring,               they               are               under               no               strict               legal               obligation               to               pass               these               savings               onto               the               client               .

The               guiding               principle               for               all               fee               sharing,               regardless               of               offshoring,               is               in               ABA               Model               Rule               1.5.

It               states:               "the               fee               should               be               reasonable               under               the               circumstances."               Offering               little               in               terms               of               specifics,               the               Rule               is               somewhat               difficult               to               apply               to               LPO               fee               sharing.

In               practice               there               have               emerged               two               ways               a               lawyer               can               bill               for               offshored               legal               services.

First,               the               offshored               costs               can               be               billed               to               the               client               as               "fees."               In               this               scenario               the               law               firm               may               add               a               surcharge               outside               the               services,               pass               the               savings               onto               the               client,               or               charge               a               flat               fee.

The               "mark-up"               scenario               may               make               sense               if               the               lawyer               is               billing               the               client               for               the               supervised               work               he               did               .

In               regard               to               this               scenario,               a               2006               Los               Angeles               Bar               Association               opinion               stated               that               the               lawyer               has               an               obligation               to               accurately               disclose               the               reason               for               those               fees               .

The               second               method               of               billing               is               to               list               offshoring               as               an               expense               incurred               by               the               law               firm.

In               this               case               the               bill               should               represent               the               actual               amount               spent               on               the               legal               services               with               no               mark               up.

In               this               scenario               the               cost               saving               is               passed               onto               the               client.
               The               issue               of               fee               sharing               is               an               important               ethical               issue               to               discuss               as               it               gets               to               the               heart               of               what               some               think               will               be               the               LPO               revolution               of               the               legal               industry.

Many               cite               the               profitable               pyramid               structure               based               on               billable               hours               of               western               law               firms               as               the               driving               force               behind               LPO.

Mark               Chandler,               the               General               Counsel               of               Cisco               Systems,               describes               the               traditional               law               firm               model               as               "the               last               vestige               of               the               medieval               guild               system."               People               like               Mr.

Chandler               are               looking               for               a               more               efficient               legal               industry               to               combat               the               growing               costs               of               legal               service               for               big               corporations.

In               this               regard               LPO               presents               a               solution,               but               the               degree               to               which               it               translates               into               savings               can               depend               on               how               the               change               is               represented               in               billing               procedures.
               Conflicts               of               Interest
               Lawyers               have               an               important               duty               to               identify               and               resolve               conflicts               of               interest               in               their               legal               work.

A               situation               of               "concurrent               conflict               of               interest"               is               defined               by               ABA               Model               Rule               1.7               as               a               time               when               the               representation               of               one               client               will               be               directly               adverse               to               another               client               or               there               is               risk               the               representation               of               one               client               will               be               materially               limited               by               lawyer's               responsibilities               to               another               client,               former               client,               third               person,               or               personal               interest               of               the               lawyers               .

ABA               Model               Rule               1.7               calls               on               lawyers               to               develop               "reasonable               procedures"               and               suggests               in               the               case               of               temporary               contracting,               the               responsibility               falls               primarily               on               the               hiring               firm               and               the               actual               lawyer               performing               the               work               to               monitor               for               conflicts               of               interest.

In               a               comment               on               the               law,               the               responsibility               of               the               middleman,               or               the               firm               that               may               be               coordinating               the               temporary               contracting,               is               minimized               .
               Offshoring               complicates               the               issues               of               conflicts               of               interest               in               several               ways.

First               in               many               common               structures               of               outsourcing               the               role               of               the               middleman,               or               LPO               company,               is               often               taking               an               active               role               in               distributing               work               assignments               and               monitoring               lawyers               performing               outsourced               work               .

In               this               scenario               it               seems               logical               the               LPO               company               would               need               to               have               a               working               knowledge               and               information               regarding               clients               served               and               their               corresponding               lawyers.

Second,               it               is               hard               to               determine               whether               an               LPO               company               or               "middleman"               working               with               a               firm               is               thus               "associated"               with               the               firm,               and               precluded               from               representing               a               client               with               which               any               lawyer               in               the               firm               may               have               a               conflict               of               interest.

Third,               it               is               difficult               for               LPO               companies               to               assess               obligations               between               former               and               current               clients               because               their               contracts               are               for               discrete               projects               .

Fourth,               the               growing               trend               for               LPO               companies               to               specialize               in               specific               areas               of               the               law,               for               example               patent               applications,               presents               an               additional               complication.

Although               it               is               a               desirable               trend               in               regard               to               expertise,               it               presents               some               questions               when               a               firm's               clients               may               be               on               opposite               sides               of               disputes.

Finally,               even               if               it               was               possible               to               interpret               ABA               Model               Rule               1.7               as               it               has               been               for               temporary               lawyers               and               focus               on               the               responsibility               of               the               foreign               lawyer               performing               the               work               and               the               hiring               firm,               the               application               does               not               work.

Foreign               lawyers               cannot               be               held               accountable               under               U.S.

law               as               temporary               lawyers               are.

This               underlying               complication               brings               us               to               the               next               issue               of               discipline.
               Discipline
               The               question               of               discipline               is               key               to               insure               protection               if               there               is               a               problem               with               offshoring,               but               it               is               still               not               clear               what               ethical               standards               an               outsourced               lawyer               will               be               held               accountable               to.

Darya               Pollack               aptly               phrases               the               issue               regarding               discipline               writing:
               "Are               outsourced               lawyers               bound               only               by               1)               the               ethical               rules               of               their               home               bar;               2)               the               ethical               rules               of               each               state               for               which               they               perform               services;               3)               the               ABA               Model               Rules               of               Professional               Conduct;               or               4)               some               combination               of               the               above?"
               There               are               problems               with               applying               each               of               the               standards               listed               above.

Using               the               standards               of               a               lawyer's               home               bar               is               not               viable               because               it               is               possible               there               may               be               differences               in               ethical               rules               between               countries               regarding               important               issues.

It               would               be               similarly               impractical               to               regulate               on               a               state               by               state               basis               within               the               U.S.,               because               outsourced               lawyers               are               likely               to               practice               in               more               than               one               state.

The               best               option               would               be               to               have               all               outsourced               lawyers               bound               by               the               ABA               Model               Rules               of               Professional               Conduct,               or               something               of               its               equivalent.

Even               this               situation               is               a               hypothetical               as               the               Model               Rules               are               currently               only               advisory               and               if               they               were               to               become               the               standard,               it               would               require               State               Bar               Associations               to               secede               some               of               their               power               .
               Moving               beyond               the               problem               of               an               ethical               standard,               there               is               the               question               of               enforcement.

Who               would               have               the               right               to               bring               enforcement               actions,               and               where               would               they               be               brought?

Furthermore,               who               would               they               be               brought               against-               the               U.S.

law               firm,               the               LPO               firm/business,               or               the               individual               lawyer               performing               outsourced               work?

Finally,               what               would               be               the               consequence               of               an               ethical               violation,               and               how               would               violations               be               documented               to               prevent               another               outsourcing               company               from               hiring               the               same               lawyer?

Mechanisms               to               regulate               legal               process               outsourcing               and               address               the               ethical               dilemmas               discussed               have               evolved               on               a               variety               of               levels               in               recent               years.

From               the               legal               community               there               has               been               slow               movement               to               apply               existing               regulation               to               the               new               industry               and               tease               out               the               level               of               compatibility.

In               this               respect,               there               have               also               been               a               few               opinions               on               the               specifics               of               legal               offshoring               by               State               Bar               Associations               in               New               York,               California,               and               Florida.

The               business               world,               quick               to               seize               the               opportunity,               has               been               quietly               experimenting               with               different               models               while               punching               the               numbers               in               efforts               to               reduce               the               bottom               line.

Leading               the               way,               however,               is               the               LPO               industry               itself.

Recognizing               the               novelty               of               their               service               and               the               need               to               legitimize               their               field,               leaders               of               LPO               both               in               India               and               the               U.S.

have               pushed               forward               with               training,               certification               tests,               other               forms               of               quality               insurance,               and               guidelines               to               the               ethical               implications.

The               underlying               drive               is,               of               course,               competition.

LPO               companies               want               a               peaceful               coexistence               with               the               American               legal               system               because               it               is               profitable.

The               questions               regarding               enforcement               are               reflective               of               the               great               degree               of               uncertainty               that               surrounds               the               industry.

Thus               far,               these               issues               have               been               handled               within               contracts               between               LPO               companies               and               clients.

As               of               yet,               there               has               not               been               a               major               incident               or               security               breech               prompting               widespread               public               outcry,               but               the               first               mishandling               of               information               is               sure               to               lead               to               concerns               over               disciplinary               regulation               .
               Legal               Regulations
               "We               have               not               either               endorsed               it               or               opposed               it"               -               Nancy               Slonim,               American               Bar               Association               (Deputy               Director               for               Policy               Communications)
               The               American               legal               community               has               yet               to               take               a               definitive               stance               on               LPO.

This               could               be               reflective               of               the               size               and               diversity               of               the               legal               community:               some               lawyers               are               leading               the               march               to               India,               others               are               protesting               the               threat               to               legal               profession,               and               the               majority               are               uninvolved,               or               in               doubtful               disbelief               of               LPO's               sustainability.

Discussion               of               ethics               have               revolved               around               current               ABA               Model               Rules               and               Formal               Ethic               Opinions,               however,               there               remain               issues               regarding               ambiguity               in               the               rules               and               the               applicability               of               these               guidelines               to               offshoring
               Model               Rules               for               Professional               Conduct               and               ABA               Formal               Ethics               Opinion               88-356
               The               Model               Rules               for               Professional               Conduct               are               useful               in               providing               a               starting               point               for               analysis,               but               they               fail               to               address               the               key               ethical               issues               underlying               legal               process               outsourcing.

The               first               issue               is               the               failure               to               provide               a               national               definition               of               "the               practice               of               law."               Although               Model               Rule               5.5               does               address               the               Unauthorized               Practice               of               Law               (UPL)               in               fairly               broad               terms,               it               fails               to               define               clearly               what               exactly               it               means,               "to               practice               the               law"               as               opposed               to               provision               of               "legal               services."               The               rule               notes               instead,               "The               definition               of               the               practice               of               law               is               established               by               law               and               varied               from               one               jurisdiction               to               another."               This               makes               the               Rules               extremely               ambiguous,               as               there               is               extreme               diversity               between               states.

Arizona,               for               example,               has               no               UPL               code               .
               The               second               issue               of               the               Model               Rules               is               application.

It               is               not               clear               how               they               apply               to               foreign               lawyers,               or               the               degree               to               which               they               are               binding.

The               rules               are               currently               only               adopted               by               states               on               a               voluntary               basis.
               Finally,               although               non-lawyers               and               domestic               contractors               are               the               best               analogy               to               offshoring,               they               are               simply               just               an               analogy.

The               language               of               the               rules               is               explicitly               and               repeatedly               limited               to               the               domestic               sphere.

For               example,               in               discussion               of               multi-jurisdiction               considerations,               it               is               limited               to               "a               lawyer               admitted               in               another               United               State               Jurisdiction."               Although               similarities               may               exist,               under               the               law               foreign               lawyers               are               categorized               as               non-lawyers               .

However,               even               existing               regulation               that               addresses               non-lawyers               was               still               developed               with               an               intended               application               to               domestic               non-lawyers,               such               as               paralegals               and               law               students.

In               addition               to               difference               in               legal               status,               foreign               lawyers               introduce               variations               in               geography,               time,               English               language               skills,               logistics,               accountability,               and               training               that               raise               specific               issues               and               require               specific               codes.
               Formal               Ethics               Opinion               88-356               was               issued               in               1988               as               a               response               to               the               growing               number               of               contracted               lawyers.

Although               it               is               useful               in               highlighting               the               ethical               issues               shared               between               domestic               contracting               and               international               offshoring,               like               the               ABA               Model               Rules,               it               is               explicitly               limited               to               domestic               temporary               lawyers               and               does               not               address               several               of               the               specific               issues               that               are               raised               by               offshoring.
               State               Bar               Association               Ethics               Opinions
               There               have               been               three               formal               State               Bar               Association               opinions               addressing               the               specific               issue               of               legal               offshoring:               New               York               (August               2006),               San               Diego               (2007),               and               Florida               (September               2007).

In               June               2006               the               Los               Angeles               Bar               Association               considered               the               issue               of               fee               sharing               in               relation               to               domestic               contracting               and               issued               an               opinion               that               has               relevance               to               offshoring.

The               opinions               are               useful               in               that               they               contribute               to               a               growing               consensus               as               to               how               offshoring               should               proceed.

For               example,               each               ruling               affirmed               that               a               lawyer               "may               ethically               outsource               legal               support               services               to               a               non-lawyer."               However,               issues               arise               because               the               opinions               left               two               important               definitions               ambiguous.

Firstly,               the               opinions               compare               foreign               lawyers               at               times               to               domestic               contractors               and               other               times               non-lawyers,               without               acknowledging               that               in               reality               foreign               lawyers               fit               neither               of               these               descriptions.

This               lack               of               acknowledgement               manifests               itself               in               a               lack               of               specific               regulations.

Secondly,               although               throughout               the               opinions               and               a               growing               body               of               literature               there               is               a               growing               consensus               that               "supervision"               is               the               mitigating               factor               in               offshoring,               there               are               no               specific               regulations               as               to               what               "supervision"               entails.

The               opinions               have               not               recognized               the               practical               reality               offshoring               presents               in               terms               of               time               difference,               distance,               language,               and               training.
               While               the               opinions               are               positive               steps               in               that               they               acknowledge               special               consideration               needs               to               be               made               for               offshoring,               and               in               some               specific               ethical               considerations               the               opinions               go               into               great               detail,               they               still               are               lacking               concreteness.

Furthermore,               they               are               based               on               the               laws               of               the               individual               state               and               are               purely               advisory               and               not               binding               either               in               state               or               national               jurisdiction.
               LPO               Industry               Self-Regulation
               The               LPO               industry               has               grown               extremely               rapidly.

Proving               itself               through               high               quality               work               at               a               low               cost,               LPO               has               dispelled               many               of               the               myths               of               legal               offshoring               throughout               the               business               world.

Now               people               are               starting               to               catch               on.

Wary               of               the               "dot-com               bubble,"               the               industry               is               rallying               together               in               attempts               to               set               standards               to               weed               out               the               "get               rich               quick"               types               and               act               preemptively               against               negative               publicity               .

Moves               are               being               made               both               in               India,               the               U.S./U.K,               in               a               growing               library               of               literature               and               in               the               on-line               community               of               blogging               LPO               professionals/customers               to               push               for               standards.

Through               informal               dialogue               and               guidelines,               the               design               of               the               Global               Legal               Professional               Certification               Test,               rise               of               training               companies,               and               push               for               accreditation               and               ethics               training               in               the               U.S.,               the               LPO               industry               seeks               to               push               itself               without               sacrificing               quality.
               Global               Legal               Professional               Certification               Test
               In               April               2007               Rainmaker,               recruitment               and               training               firm               that               focuses               on               the               LPO               industry,               introduced               the               Global               Legal               Professional               (GLP)               certification               test.

Designed               in               conjunction               with               three               LPO               companies:               JuriMatrix,               Bodhi               Global,               and               Quislex,               the               GLP               is               aimed               at               testing               candidates               on               skills               needed               in               LPO:               English               fluency,               technology               and               professional               skills,               personal               effectiveness               and               legal               knowledge               .

The               first               GLP               was               administered               on               September               16th,               2007               in               the               Indian               cities               of               New               Delhi,               Bombay,               Pune,               Bangalore               and               Hyderabad.

The               GLP               website               is               explicit:               "The               purpose               of               the               GLP               is               clear               and               simple               -               to               put               in               place               a               mechanism               that               enables               the               industry               to               identify               the               talent               required               to               fuel               the               L.P.O               revolution."               The               website               invites               "players"               in               the               LPO               industry               to               support               and               participate               in               the               program               by               indicating               their               'acceptance'               of               the               GLP               as               a               valid               mechanism               to               certify               industry               talent.

With               participation,               members               of               the               LPO               industry               gain               access               to               the               talent               pool,               lower               recruitment               and               training               costs,               and               an               "auto-application               process"               that               enables               test               takers               to               fast               track               their               scores               to               preferred               employers               .

This               test               may               open               up               opportunities               for               the               80,000               lawyers               that               graduate               from               Indian               law               schools               each               year,               and               is               pushing               towards               a               standard               of               evaluation.

However,               although               the               GLP               may               present               an               interesting               concept               in               regard               to               the               idea               of               a               certification               test               for               the               LPO               industry,               it               is               important               to               note               who               is               behind               the               program.

Although               reputable               companies               aided               in               the               design               of               the               test,               the               top               companies               of               the               industry               were               not               involved.

In               order               for               a               certification               test               have               real               relevance;               a               broader               network               of               consultation               and               input               from               LPO               companies               will               be               necessary               .

In               addition,               it               may               be               beneficial               to               involve               the               American               Bar               Association               as               a               way               to               form               a               link               between               a               business               and               legal               solution.
               Training
               "The               training               period               includes               weekly               tests,               in               which               attorneys               must               score               85%               on               every               test;               the               number               of               tests               depends               on               the               complexity               of               the               assignment.

On               the               final               test               at               the               end               of               training,               attorneys               must               score               90%               or               more               to               be               placed               in               an               actual               assignment.

An               attorney               who               scores               lower               can               take               only               one               retest.

A               trainee               who               does               not               succeed               in               the               retest               is               fired.

The               test               performance               and               scores               of               each               attorney               are               recorded               and               a               report               of               results               is               prepared               and               kept               with               that               individual's               personnel               record;               this               record               is               used               to               evaluate               that               attorney               for               higher               positions               in               True               Legal               and               assignments               with               greater               responsibility."               -               Rupali               Shah,               director               of               True               Legal               Partners
               The               rigorous               training               regime               described               by               Rupali               Shah               of               the               LPO               company               True               Legal               Partners,               is               not               standardized               procedure               throughout               the               industry.

It               is,               however,               indicative               of               the               high               standards               self-imposed               on               the               industry.

To               some               degree,               LPO               is               self-selecting.

The               market               is               very               competitive               and               limited               to               extremely               qualified               Indian               lawyers.

For               example,               a               prominent               LPO               company,               SDD               Global,               hires               1               out               of               every               900               applications               .

The               competitive               market               and               rigorous               training               programs               within               LPO               companies               have               created               a               qualified               group               of               employees               who               are               looking               to               make               a               career               out               of               LPO.

In               response,               the               industry               is               starting               to               develop               and               mature.

For               example,               Pangea3,               named               the               top               LPO               company               of               2007               by               Brown               and               Wilson's               Black               Book               of               Outsourcing,               emphasizes               building               relationships               with               clients.

Their               website               describes               their               organizational               structure               as               one               where,               "Generally,               each               client               has               a               dedicated               team               of               two               or               more               professionals,               who               learn               the               client's               approach               to               legal               and               business               issues,               its               risk               profile,               and               its               "playbook."               Pangea3's               approach               is               indicative               of               an               attitude               within               the               industry               that               aims               to               go               beyond               a               stereotypical               outsourcing               relationship.

The               industry               has               recognized               it               is               important               to               invest               in               long-term               capacity               building               and               quality               assurance               in               order               to               keep               out               a               potential               flood               of               inexperienced,               poorly               trained,               and               possible               harmful               get-rich-quick               start-up               companies               .
               Accreditation
               The               GLP               and               internal               training               processes               of               LPO               are               both               components               of               the               movement               towards               accreditation.

Mark               Ross,               Director               of               Development               for               LawScribe,               a               LPO               company,               recently               outlined               several               specific               industry               regulatory               standards               he               would               like               to               see               implemented.

The               standards               cover               issues               ranging               from               structure               to               training.

Several               address               the               issue               of               supervision               by               suggested               standards               regarding               models               of               outsourcing               that               regulate               the               relationship               between               U.S./               U.K               lawyers               and               their               foreign               counterparts.

Particularly,               Ross               would               mandate               an               LPO               be               required               to               have               a               staffed               physical               presence               in               the               U.S.

or               UK,               would               be               required               to               employ               at               least               one               qualified               U.S.

attorney.

In               regard               to               training,               Ross               suggests               a               requirement               to               develop               a               written               training               program               and               in-state               independent               verification               of               employees.

Ross               says               these               measures               are               nothing               more               than               what               is               already               happening               in               contracts               between               LPO               companies               and               clients,               but               it               will               be               beneficial               both               economically               and               in               legitimizing               the               industry               to               formally               implement               these               standards               .
               In               the               absence               of               formal               regulation,               many               professionals               within               LPO               have               developed               informal               guidelines               or               checklists               for               clients               interested               offshoring.

These               guidelines               are               often               published               on               blogs,               industry               specific               on-line               journals               or               news-sites,               and               contribute               to               a               dialogue               that               addresses               questions               of               accreditation               and               standards.

Within               this               dialogue               much               of               the               same               issues               and               standards               discussed               by               Mark               Ross               above               are               echoed.

For               example,               in               January               2008,               Tariq               Hafeez,               President               and               General               Council               of               LegalEase               Solutions,               published               a               post               on               Rahul               Jindal's               Legal               Process               Outsourcing               Blog               that               included               a               "Checklist               to               evaluate               an               LPO's               LR&R               [Legal               Research               and               Writing]               Services."               Points               covered               included               whether               the               LPO               is               based               in               the               U.S.,               if               it               has               U.S.

trained               and               licensed               attorneys,               if               the               LPO               has               a               training               curriculum               for               its               offshore               attorneys,               and               who               the               curriculum               was               designed               by               .
               Contracts
               The               way               LPO               has               been               "regulated"               thus               far               is               based               on               contracts.

It               is               through               individual               contracts               between               offshoring               companies               and               their               clients               that               many               forms               of               self-               regulation               and               testing               have               developed.

Often               contracts               will               require               submissions               of               a               test               work               sample               product,               condition               payment               on               correct               background               check               of               the               company,               or               even               offer               a               complete               refund               if               the               client               is               not               satisfied.

Out               of               necessity               the               contract               must               spell               out               the               specific               ethical               standards               of               the               relationship,               as               the               applicable               standards               for               LPO               are               not               clear               .

Other               provisions               in               the               contracts               may               include               non-disclosure               or               similar               provisions               safeguarding               the               identity               of               the               company               in               association               with               LPO.
               Even               if               strictly               formal               or               self-regulatory               methods               were               in               place,               the               contract               would               remain               the               legally               binding               agreement               between               firms.

However,               both               parties               would               benefit               from               having               uniform               standards               across               the               LPO               industry               that               were               simply               implemented               via               contract,               rather               than               rewritten               for               each               new               client               and               varied               among               LPO               companies.
               The               Legal               Process               Outsourcing               industry               is               taking               steps               toward               proving               its               legitimacy               as               a               cost-efficient               and               high               quality               answer               to               the               rising               cost               of               legal               services.

Although               many               of               the               benefits               are               clear,               there               are               still               significant               ethical               issues               that               must               be               addressed               if               the               industry               is               to               continue               to               move               forward.

The               next               step               on               this               path               must               involve               movement               from               both               the               American               legal               community               and               the               LPO               industry               itself               to               agree               on               rules               guiding               both               the               foreign               and               American               lawyers               involved               in               the               industry.
               In               this               regard,               I               recommend               a               two-prong               approach               to               move               towards               comprehensive               solution.

It               should               be               composed               of               increased               formal               ethical               regulation               and               education               within               the               American               legal               community;               as               well               as               accreditation               and               standardization               within               the               LPO               industry.
               ABA               Formal               Ethics               Opinion               on               the               Offshoring               of               Legal               Services:
               It               would               be               very               useful               for               the               American               Bar               Association               to               address               the               ethical               issues               of               offshoring               on               a               national               level.

Although               State               Bar               rulings               are               crucial               in               working               towards               a               consensus,               given               the               jurisdictional               issues               that               arise               between               states               it               is               necessary               for               a               decision               to               be               made               at               the               national               level.

Furthermore               there               are               three               key               issues               that               should               be               clarified               in               an               Ethics               Opinion:
               Define               of               "the               practice               of               law,"               and               thus               unauthorized               practice.

Specify               criteria               necessary               for               adequate               "supervision,"               in               acknowledgement               of               the               special               situation               of               foreign               lawyers.

Clarify               how               the               ABA               Model               Rules               apply               to               foreign               non-lawyers.

Although               in               application               the               value               of               the               opinion               will               be               purely               normative,               it               will               be               an               important               first               step               in               moving               toward               the               recognition               and               acceptance               of               standards               for               LPO.

The               opinion               should               be               complemented               with               educational               seminars               made               available               through               State               Bar               Associations.

A               model               for               the               program               could               be               the               LawScribe               Seminar,Legal               Process               Outsourcing               (LPO)               Ethical               Considerations               which               has               been               approved               for               Minimum               Continuing               Legal               Education               (MCLE)               by               the               State               Bar               of               California               .
               Accreditation               Standards               within               the               LPO               Industry:
               LPO               should               formalize               the               informal               mechanisms               of               self-regulation               already               present               within               the               industry.

I               strongly               support               the               standards               outlined               by               Mark               Ross.

In               this               regard,               increased               interaction               and               dialogue               between               LPO               companies               will               become               important               tools               in               standardization               of               the               industry               for               constructive               competition.

Informal               networks,               such               as               blogs               and               on-line               newsletters               have               already               been               developed               and               should               continue.

In               addition,               formal               interaction               is               occurring               in               the               form               of               industry               conferences               like               the               upcoming,               "India               LPO               Summit               2008"               in               New               York.

Furthermore               there               should               be               a               standard               certification               process               for               individual               foreign               lawyers               engaged               in               LPO.

The               Global               Legal               Professional               Certification               test               may               provide               a               model               to               work               with,               however               a               much               broader               range               of               consultation               between               both               Indian               and               U.S.

training               organizations,               LPO               companies,               clients               and               legal               communities               will               be               necessary.

In               this               regard,               it               makes               the               most               sense               for               development               of               the               certification               test               to               be               facilitated               by               a               U.S.

based               training               organization               familiar               with               the               U.S.

standards,               laws,               and               the               nature               of               the               work               being               outsourced.
               

               The               idea               of               Legal               Process               Outsourcing               is               provocative.

For               it               to               be               a               sustainable               industry               it               will               require               not               only               regulation               of               ethical               considerations,               but               also               a               change               in               legal               culture.

In               the               legal               industry,               it               will               force               lawyers               to               look               not               only               at               quality               of               justice,               but               the               speed               with               which               it               is               produced.

It               will               challenge               and               reinvent               the               standard               ethical               culture               that               often               develops               largely               based               on               face-to-face               interaction               between               lawyers.

The               commodization               of               the               legal               industry               is               not               something               easily               reconciled               in               pubic               opinion,               although               it               has               existed               and               been               developing               undetected               for               sometime.

On               the               other               side               of               the               Atlantic,               the               U.K.

in               2007               passed               the               Legal               Service               Bill,               which               allows               the               creation               of               Alternative               Business               Structures.

Most               parts               of               it               go               into               effect               this               October               2011.

These               structures,               according               to               a               summary               of               the               Bill,               "will               enable               lawyers               and               non-lawyers               to               work               together               on               an               equal               footing               to               deliver               legal               and               other               services."               The               ramifications               of               this               bill               will               be               a               further               commodization               of               the               British               legal               industry               .
               The               United               States               is               likely               to               follow               the               United               Kingdom's               lead               in               regard               to               the               commodization               of               the               legal               industry               and               coupled               with               the               issue               of               outsourcing,               a               hot               political               topic;               the               result               it               could               be               inflammatory.

Usual               associations               conceive               of               law               as               a               solution               or               regulation               to               outsourcing               rather               than               a               part               of               the               trend.

If               LPO               is               to               win               over               the               support               of               American               legal               community               and               eventually               the               general               public,               it               is               crucial               for               a               comprehensive               solution               to               be               developed               that               will               bring               together               both               the               American               lawyers               and               the               legal               offshoring               industry.

In               this               way               Legal               Process               Outsourcing               can               not               only               coexist,               but               improve               the               American               legal               services               industry.




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