Law Without Borders

INDIAN LEGAL TEAM WINS L.A. COURT BATTLE FOR "ALI G"

The following is reprinted from the April 2009 edition of the MLRC MediaLawLetter, the leading monthly news publication for media defense lawyers in the United States:

In Doe v. HBO, Los Angeles Superior

Court Throws Out Libel-in-Fiction Case

Against Sacha Baron Cohen’s “Da Ali G Show”

Comedic Statements Could Not Be Believed,

and Plaintiff Was Libel-Proof Anyway

By Michael Cleaver and Russell Smith

In a decision that could benefit comedy writers, performers, television broadcasters, and film studios across the United States, Channel Four Television Corporation (“Channel 4”), the UK’s second largest television broadcaster and the originator of “Da Ali G Show,” starring Sacha Baron Cohen (“Cohen”), has defeated a libel case filed in Los Angeles by a plaintiff who sought millions of dollars in damages, all allegedly due to the inclusion of her name in a comedy routine. 

 The plaintiff, who sued as “Jane Doe,” claimed that Cohen used her name in a comedy “interview” by “Ali G” with the historian and author, Gore Vidal, during the course of the television program “Da Ali G Show.”  In the interview, the fictional “Ali G” asked Mr. Vidal why there is any point in amending the U.S. Constitution, since he (Ali G) once had a girlfriend (the plaintiff) who was constantly “amending herself,” but to no avail.

 Da Ali G Show

 “Da Ali G Show” is a satirical television comedy in which Cohen (a white male from the UK), under the guise of three separate, fictional alter-egos –“Ali G” (a “wannabe” black gangsta-rapper), “Borat” (a witless journalist from Kazakhstan), and “Bruno” (an Austrian gay fascist fashion reporter) – interviews real people, including countless celebrities and other public figures (such as Pat Buchanan, Boutros Boutros-Gali, Newt Gingrich, Dick Thornburgh and Donald Trump).  The “interviews” involve a steady stream of ridiculous statements and questions posed by the respective alter-egos to the interviewees.  Although the television audience is well aware that the interviewer is a fictional persona, the interviewees, at least at the time of the interview, are not.  According to the consent agreements they signed in order to appear on television, they didn’t care. 

 Throughout the program, Cohen never steps out of character, and never appears as himself.  Using his idiotic and buffoonish Ali G persona in particular, Cohen satirizes sexism, racism, homophobia, and what passes for Western “youth culture.” As New York Times columnist Maureen Dowd noted, “[w]ith his white-gangsta-rapper-wannabe persona, Sacha Baron Cohen, a brilliant graduate of Cambridge, sends up the vacuity of the culture.”

Background of the Case

 The Plaintiff originally sued Home Box Office, Inc. (“HBO”), Cohen, “Da Ali G Show,” and 50 unnamed “Doe” defendants.  In October of 2007, the Plaintiff was persuaded to voluntarily dismiss the entire complaint, with prejudice, as to all of the named defendants, in exchange for the substitution of Channel 4 as Doe Defendant No. 1.  This was based on the theory that it was Channel 4, the foreign distributor of the show, not HBO, which licensed the specific broadcast of the show in Finland that ended up on YouTube, with the Plaintiff’s name in it.

In her complaint, the Plaintiff alleged that the broadcast defamed her.  In the episode in question, during a spoof interview with Gore Vidal, Cohen’s Ali G character remarked as follows:

Ain't it better sometimes, to get rid of the whole thing rather than amend it, cos like me used to go out with this bitch called [Jane Doe] and she used to always be trying to amend herself. Y'know, get her hair done in highlights, get like tattoo done on her batty crease, y'know have the whole thing shaved – very nice, but it didn't make any more difference.  She was still a minger and so, y'know me had enough, and once me got her pregnant me said alright, laters, that is it.  Ain't it the same with the Constitution?

 Mr. Vidal laughed, and then responded: “Well, the Constitution has not yet become pregnant.”

 The Plaintiff apparently did not laugh.  Instead, she responded with a libel suit alleging that the above statements falsely suggested that she had a sexual relationship with Cohen, and that, because she has no children, the statements also falsely suggested that she must have had an abortion. 

 The Plaintiff claimed she was damaged by (a) former defendant HBO distributing the allegedly offending episode of the Program at least 21 times across the United States in August of 2004, (b) Channel 4 distributing the episode to Finland in December of 2004, (c) HBO distributing the episode in the U.S. again in 2005, (d) a viewer of the Finnish broadcast posting the offending segment of the episode on YouTube in December of 2006, and (e) the Plaintiff’s public filing of the lawsuit in 2007, which included her full name, and gave rise to a barrage of worldwide, negative publicity concerning the Plaintiff and her claims. 

Summary Judgment

            Granting  Channel 4’s motion for summary judgment, Los Angeles Superior Court Judge Terry Friedman, in a pro-media ruling that apparently is only the second libel-in-fiction decision in the television context (the first being Frank v. National Broadcasting Company, a New York decision dismissing a libel suit against Saturday Night Live), decisively threw out the lawsuit, holding as follows:

No reasonable person could consider the statements made by Ali G on the program to be factual.  To the contrary, it is obvious that the Ali G character is absurd, and all his statements are gibberish and intended as comedy.  The actor, Sasha Baron Cohen, never strays from the Ali G character, who is dressed in a ridiculous outfit and speaks in the exaggerated manner of a rap artist.  Ali G’s statements are similarly absurd.  For example, prior to the reference to Plaintiff, while ‘interviewing’ the author Gore Vidal, Ali G refers to the Constitution of the United States as having been written on two tablets, clearly intended to confuse the Constitution with the Ten Commandments.  Altogether, the program is obviously a spoof of a serious interview program.  No reasonable person could think otherwise.

In the same interview about which the Plaintiff complained, “Ali G” also states that Moses was involved in writing the Constitution, and that author Gore Vidal is a world-famous hair stylist (apparently mistaking Mr. Vidal for Vidal Sassoon).  Elsewhere in the same episode, Ali G states that actor Denzel Washington lives in George Washington’s former home at Mount Vernon, that John Paul Jones had no arms or legs, that the world is running out of gravity, that gravity was discovered by “Sir Isaac Newton-John” after shooting an apple from William Tell’s head, and that euthanasia refers to the killing of elderly people by youth in Asia.

Based on the “content of the program” (i.e., the context in which the statements were made), the court held that the Plaintiff could not prove that the statements declared or implied a “provably false assertion of fact,” and that the statements were not “susceptible to [a]… libelous meaning.”  Much less could the Plaintiff prove that the statement at the core of the lawsuit, namely, that the Plaintiff had sex with a fictional character, was factual.  At oral argument, Judge Friedman compared this allegation to a claim that a real person could have sex with “Bugs Bunny.”

Moreover, the Court found that the dissemination of the allegedly libelous statements by Channel 4 could not have caused the Plaintiff further damage, beyond that allegedly resulting from the original HBO broadcast.  In finding the Plaintiff to be libel-proof with respect to the allegedly offending statements broadcast by Channel 4, the court noted that “[the] Plaintiff attests in discovery responses that the damages all flow from a rebroadcast of the Program [prior to the distribution of the episode in Finland]….  Accordingly, no other damages flow from any subsequent rebroadcast in Finland or as a result of YouTube rebroadcasting … the Program.”

The court’s decision is available online by here.

The winning brief in favor of summary judgment is available here.

 India’s Role in Libel Defense

Channel 4, which incidentally developed and produced countless innovative films such as Slumdog Millionaire, The Crying Game, Trainspotting, The Last King of Scotland, and Four Weddings and a Funeral, is happy not only with the result in the “Ali G” case, but also with the low legal fees that made the defense possible.  As noted by the company in an unusual press release following the victory: “This action was fought with the litigation support services of SDD Global Solutions, the India arm of Channel 4’s U.S. counsel, SmithDehn LLP, in a groundbreaking case where ‘outsourcing’ has proved to be a creative solution to running a robust defense.” 

U.S. law-trained Indian attorneys at SDD Global conducted the legal research and drafted all of the preliminary drafts of court papers in the litigation, including Channel 4’s motion and brief for summary judgment, which allowed Channel 4 to fight and defeat the lawsuit, rather than settling in order to avoid burdensome legal fees. 

 As Channel 4’s general counsel noted after the decision: “US court actions are extremely costly to run and even where a defendant wins, little if any of their costs are recoverable from the plaintiff. As so often happens in cases like this, the ‘chilling effect’ of the threat of substantial damages and significant legal costs, forces defendants to settle with plaintiffs who have no justifiable claim. However, combining the skills and expertise of US attorneys with US law-trained Indian attorneys has proved to be an innovative and cost-effective way for Channel 4 to fight and win the suit.”

            Sanjay Bhatia, SDD Global’s Head of Operations, commented: “This is a case where outsourcing created more work in the U.S., rather than less.  Because our team made the defense affordable, U.S. lawyers were able to do the things in the U.S. that they do best there, such as strategizing, supervising, editing, and appearing in court. The implications of this case are huge. With legal outsourcing, baseless lawsuits can be defeated on their merits, instead of settled simply out of fear of legal fees.”

Russell Smith and Michael Cleaver of SmithDehn LLP were lead U.S. counsel to Channel Four Television Corporation in this case.  Providing crucial and cost-effective legal research and drafting were Padmavathi Shanthamurthy, Vidya Devaiah, Preethi Venkataramu, Ashish Kumar, and Sanjay Bhatia, U.S. law-trained Indian legal professionals at SDD Global Solutions Pvt Ltd. in Mysore, India.

Legal Outsourcing Goes Mainstream -- In USA Today

With three million readers, the largest circulation of any newspaper in the United States, you cannot get more mainstream than USA Today.  That's where "legal process outsourcing" to India is, on page A3.  The headline: "More Legal Legwork Gets Outsourced to India."  Here's a brief excerpt:

"You could call it 'Outsourcing 2.0' or maybe even '3.0.' Now firms are increasingly trying to leverage expertise," says Saikat Chaudhuri, an assistant professor in the business school at the University of Pennsylvania. Legal outsourcing is "growing very, very quickly."

Professional outsourcing jumped from a $260 million industry in 2001 to a $3.05 billion industry in 2007. It will reach a projected $11.2 billion by 2011, says a report from the India Brand Equity Foundation, a public-private partnership. Legal research, which the group didn't track in 2001, contributes about $95 million.

Click here for the full article.

FROM RHETORIC TO REALITY: U.S. Politics and the Truth About Outsourcing

By Vidya Devaiah

        Outsourcing is a hot-button issue in the 2008 United States election campaign.  Anyone involved in the outsourcing industry has now heard of the pledge by Presidential candidate Barack Obama to “take away tax breaks to companies that ship jobs overseas.” Other U.S. candidates have made similar statements.  I was curious.  Could the United States really be providing tax incentives to outsource U.S. jobs?  What country would?  Seriously, what tax breaks are they talking about?  In actual fact, research shows that there are no U.S. tax breaks for sending jobs overseas. This tax break myth is just so much political rhetoric (et tu, Barack?), and the reality is far different.

        While tax breaks for off-shoring of jobs do not exist, what does exist is a provision in the U.S. tax code that allows U.S. companies earning profits in a foreign country to defer payment of corporate tax in the United States until those profits are repatriated.  If the profits remain abroad and are reinvested there, the company can more or less avoid the (very high) corporate taxes in the United States.  And this is what many companies do when they set up operations overseas, regardless of whether this involves outsourcing of jobs.  Although in many cases this does result in a loss of some blue collar manufacturing jobs in the United States and creates a lot of resentment among the voter pool, it also keeps U.S. companies competitive in countries where the corporate tax rate is much lower.

        The above-mentioned U.S. provision has been in place for decades, and the setting up of overseas operations by American corporations is an economic reality that cannot be turned around merely by changing the tax code.  Simply put, those American companies with manufacturing and service set-ups abroad haven't made these arrangements to take advantage of the tax deferral.  They have done it because of lower operational costs, or because of the proximity to target markets, or for other reasons that may have nothing to do with tax breaks or outsourcing of jobs.  Changing the tax code to remove the deferral will only create a barrier that will reduce the ability of U.S. companies to compete in today's global marketplace.  If the U.S. government offers incentives and tax credits to companies that create more jobs for the American workforce, that might help a bit.  But then again, those benefits would have to be enormous to outweigh the benefits of offshoring.  Big news at the moment is how the television ratings giant, Neilsen Co., has actually given up local tax breaks in Florida after signing an outsourcing deal with Tata Consultancy Services in Mumbai.

        If you Google “outsourcing” and “tax breaks,” what will you find?  Page after page of references to Senator John Kerry.  You don't remember John Kerry?  He was the Democratic Presidential candidate in 2004.  He laid out a firm plan to end the tax deferral system. He intended to change the tax code so that U.S. companies would have to pay taxes on profits earned overseas with no deferral. He then intended to use the increased tax revenue to reduce the U.S. corporate tax rate from 35% to 33.25%. The same Google search will also bring up page after page of expert opinions on how Kerry's plan would have done nothing to change the economic realities of setting up operations abroad. The benefits of a presence in foreign markets would far outweigh a marginal cut in the U.S. corporate tax rate. That reality still stands.

        And what about companies that outsource only certain divisions --  like customer service, tech support, legal and IT -- to foreign companies by contract?   U.S. companies that outsource in this way receive no tax breaks or tax deferrals.  So eliminating these tax benefits will have no effect on this sort of “white collar outsourcing.” 

        The business lobby in Washington D.C. probably would succeed, as it has done before, in preventing any removal of the tax benefits discussed above.  Also, neither the Democrats nor the Republicans have ever proposed any legislation that actually would abolish or even restrict outsourcing by private companies.  Even if Obama and Biden prove to be the force for change that they seem to be (if they win!), the decisions on outsourcing will not rest in their hands.  Businesses, large and small, will continue to do what they believe is best for survival and growth.

        On the “law business” front, the recent American Bar Association ethics opinion on legal outsourcing is being quoted everywhere these days.  Says the ABA: “The outsourcing trend is a salutary one for our globalized economy.” That's quite an affirmation.  And it's quite true.  The popular misconception is that outsourcing always means job loss and a windfall profit for the company doing the outsourcing.  Although no one should discount the hardship and uncertainty faced by an individual who has lost his or her job, nothing is that black and white.  A more accurate perspective is that for companies, it is often a matter of staying afloat or struggling to grow, not getting windfalls, and with regard to jobs – when economies are not stifled by protectionism – job losses and gains tend to balance out.  If certain jobs are lost in the U.S., they are created in India or China, thereby creating new wealth in those countries and a huge new market for American goods and services – a market that is now even bigger than the market in the U.S.  When those economies flourish, we also see Chinese and Indian companies setting-up shop in America – creating jobs. The United States economy no longer stops at that country's borders.  Globalization – as ubiquitous and cheesy as the word has come to sound – is what it's all about.  A corporation cannot remain competitive by keeping all its operations, markets and support in one country.

        So is the anti-outsourcing crowd guilty of hypocrisy?  If outsourcing is so bad, then, by their own logic, should they not also be opposed to outsourcing from foreign countries to the U.S.?  According to the Council of American States in China, over thirty U.S. states have officers or representatives in China, trying to persuade Chinese companies to set up operations in the United States.  And indeed, many Chinese entrepreneurs have set up operations in the U.S. and have hired Americans.  So have Indians.  Steel magnate Sunil Bharti Mittal told Hillary Clinton last year, when he led a delegation of the Confederation of Indian Industries CEO, about the new trend  of “reverse-outsourcing.”  Recently, we at SDD Global Solutions in India have seen this first-hand when we helped a large Indian company set up its operations in the United States.  So it isn't all bad, is it?  If you look at the big picture.

        Just like the U.S. economy – and a hat-tip to the name of this blog – law is without borders these days.  A high-quality lawyer in almost any country in the world can handle legal work in almost any other country – given sufficient time and resources.  Let's focus on the trend of sending legal work from the U.S., the U.K. and Canada to India, sometimes called "legal process outsourcing."  Lawyers and paralegals in the U.S. and U.K. who feel that offshoring legal work only benefits BigLaw and corporate legal departments are mistaken.  Large law firms and corporates definitely see lower costs, higher efficiency and improved productivity.  Some large law firms also continue to charge their clients the exorbitant fees that offshoring is supposed to reduce, and corporations, as always, need to keep their eye on the bottom line.  But small law firms and solo practitioners can benefit too.  As noted by the ABA in its Opinion on legal outsourcing, specifically with regard to small firms and solo lawyers “who do not otherwise maintain the needed human resources on an ongoing basis,” outsourcing can allow them “to handle a large, discovery-intensive litigation” and otherwise “represent a client in such a matter effectively and efficiently.” 

        When the idea that legal work must always be expensive and time-consuming falls by the wayside, thanks to offshoring, more and more legal work will come in.  In the news last month was the fact that the UK-based law firm, Eversheds, signed an outsourcing deal with an Indian legal service provider, which will handle the drafting of commercial contracts for deals that normally would be too expensive, legal-wise, to pursue. The Eversheds spokesman pointedly noted, referring to the outsourcing of these matters to India, that “[i]t’s not taking work away from anyone.  It’s actually creating work out of contracts that would ­otherwise sit in a metaphorical drawer.”  And it’s work that will be supervised by Western lawyers, adding to their revenue.

        At SDD Global we've seen, and in fact we’ve been one of the causes of, this creation-of-work phenomenon.   A Fortune 100 client of our managing law firm, SmithDehn LLP, specifically requested that the legal research and analysis needed for a series of multi-million-dollar deals in the U.S. be done by Indian attorneys at SDD Global.  This is yet another situation where, if not for a Western law firm’s outsourcing capabilities, no lawyers would have been hired, because typical Western legal fees would have made it prohibitive.  The work would have been done either in-house, or not at all.  As noted in other posts on this blog, a similar thing has happened in litigation, where corporate clients have chosen to defend themselves against meritless lawsuits, using U.S. and Indian lawyers.  Without legal outsourcing, there would be no lawyers hired for any significant work at all, because the cases simply would have been settled at the outset, just to avoid the usual U.S. litigation costs.  

        Indeed, when it comes to litigation, it would seem that offshoring of legal work will create a kind of automatic tort reform.  Defendants facing bogus or inflated tort claims can choose to litigate instead of settle. This will discourage frivolous lawsuits, while maintaining the ability of legitimate plaintiffs to pursue their claims.  After all, no sensible corporate defendant would refuse a reasonable settlement of a meritorious claim.  Even if the costs of litigation are reduced, outsourcing still does not allow defendants to win cases when the plaintiffs are right.  To the contrary, legal outsourcing can be used by lawyers for legitimate plaintiffs to pursue cases that have merit, without worrying as much about the cost, or about a lack of resources to support the litigation.  As for the frivolous or weak plaintiff’s cases, all the money that otherwise would be spent by defendants on nuisance payouts can be plowed by corporations right back into the economy.  And yes, some of that money will flow through the pockets of Western lawyers who are smart enough to use legal outsourcing to get work that otherwise would not exist.

        Politics and the economy, the economy and business, business and cost-cutting, cost-cutting and lay-offs, lay-offs and politics.  And somewhere in the middle of all that, the creation of new work and new jobs through outsourcing.  One of the world's many circles – not vicious; not benign; just there.  Come January 20, 2009, the campaign rhetoric will end, and the job will begin.  We'll know whether Obama or McCain will be hired by the electorate to deal with the big picture, and we in India will hope for the best for our 'Murkin friends.  In the meantime, and after, we’ll continue to work for our U.S., U.K. and Canadian clients.  Because they will continue to outsource.

Jagshemash! Last of the Borat Suits Bounced

And now, an update on what the "Above the Law" blog refers to as "the rapidly growing practice area of Boratlaw."  As production counsel for "Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan," it is my distinct pleasure to report that the last three of the lawsuits by people in the film have been dismissed.  In a decision by United States District Judge Loretta Preska, which you can read by clicking here, the federal court in Manhattan threw out the claims of the two Alabama etiquette coaches, the Alabama dinner guests, and the Maryland driving instructor.  This follows other victories, in courts across the country, against claims by the South Carolina frat boys, the fleeing New York hedge fund manager, the two Romanian villagers, and the South Carolina toilet man.  In Sacha Baron Cohen's hysterical acceptance speech upon receiving Golden Globe Award for Best Comedy, he said, among other things, "I want to thank everyone in America who hasn't sued us yet."

Last year, I had the strange experience of flying to Los Angeles from India to attend a packed forum of several hundred media and entertainment lawyers organized by the Beverly Hills Bar Association.  The event was amusingly titled, "This Release Is Binding....Nottt!"  At the forum, the general counsels of the ABC and CBS television networks debated the lawyer for the frat boy plaintiffs, regarding the validity of the Borat consent agreement that I drafted for the Borat participants to sign. The BHBA will need to change the title for the next forum.  How about "These Lawsuits Have Legs....Nottt!"

In throwing out the last of the claims, Judge Preska upheld the validity of the consent agreement, just like all of the other judges have done.  The Court went on to note as follows:

"At its core..., Borat attempts an ironic commentary on 'modern' American culture, contrasting the backwardness of its protagonist with the social ills that afflict supposedly sophisticated society.  The movie challenges its viewers to confront not only the bizarre and offensive Borat character himself, but the equally offensive and bizarre reactions he elicits from 'average' Americans."

Hmmm.  In any event, it seems that another backward, offensive, and bizarre protagonist, President Bush, might be a closet Borat fan.  The day after Judge Preska's decision, he nominated her for a position on the United States Court of Appeals for the Second Circuit.

Finally, on the subject of "legal process outsourcing," as always, I want to put in a plug for the team of Indian lawyers at SDD Global Solutions in Mysore, who put in hundreds of hours in the multi-faceted field of Boratlaw.  Congrats also to Hogan Hartson, which expertly handled the New York litigation.

Hennessey Now Cooking Up a Class Action

Below is a comment just posted by Joseph Hennessey on this blog.  He's the lead lawyer in the case against legal process outsourcing in Washington D.C. federal court, Newman McIntosh & Hennessey vs. Bush, which was withdrawn only a few days after the filing of a motion to dismiss.  Hennessey now says he's busy hunting for "those who have been victimized by the use of foreign legal process outsourcers," so he can file "an action for damages on a class wide basis."  But judging from the first "example" he's found, where Indian doctors allegedly were used to assist in a surgery that "went horribly wrong," it looks like he still has more plaintiff-searching to do.   If anybody can see a connection between this allegedly botched surgery and legal outsourcing, please let us know!  

Meanwhile, Hennessey also is threatening to file an ethics complaint, due to the fact that four Indian legal professionals at SDD Global Solutions are credited by name in the motion to dismiss Hennessey's first lawsuit.  The motion was signed and filed not by SDD Global, but by an attorney admitted to the bar of the D.C. federal court.  Yet Hennessey claims that the legal research and drafting done by the Indian team amounts to "the unauthorized practice of law."  What an odd position to take, given that summer associates, paralegals, new-hires, and others not admitted to the bar perform legal research and drafting at every major law firm in the U.S., and often are credited at the end of legal papers in an "on the brief" section.  I'm getting the feeling that Hennessey really does not like the outsourcing of legal services to India! 

Here's his comment about the new lawsuit he's concocting:

Joseph Hennessey has joined John J. Beins and Seth D. Goldberg who have significant expertise in litigating consumer class action lawsuits -- as well as other business litigation. John Beins, Seth Goldman, Anthony Newman, Ernie McIntosh and I will be combining our various areas of expertise to identify those who have been victimized by the use of foreign legal process outsourcers. Collectively, we decided that rather than litigate an academic declaratory judgment action, we would bring an action for damages on a class wide basis. We have, for example, already heard a person who believes their HIPAA rights were violated when Indian doctors were video-conferenced to consult and make recommendations about a surgical procedure -- a procedure that went horribly wrong. Not only did this person not consent to consultation, but all of this persons private medical records were transferred to these Indian-based doctors -- a transfer that violated her HIPAA rights. So, stay tuned -- we are not at the end of this issue, we are at the beginning.

"Thought Leaders": Lose the Newspeak and Doublespeak

I don't know where it's coming from.  Could be business schools, BPOs, corporate self-improvement books, or IT drones lacking in basic communication skills, for all I know.  In any case, it seems to be spreading over some parts of the legal outsourcing industry like margarine on toast.  Unlike butter substitutes, however, it's not healthy.  I'm talking about the kind of corporate, Orwellian, newspeak or doublespeak that allows spokespersons and their companies to sound vaguely like they are saying something intelligent, while either saying nothing, or saying multiple things, each contradictory to the other, and usually accompanied by useless powerpoint graphics to distract attention from the fact that nothing of any actual value is being communicated.  Here's an example, from my admittedly shaky memory of a speech at a conference, by an exemplar of "thought leadership" (another of those unnecessary and mystifying terms that I really wish would disappear):

The drivers in our space, regardless of their verticals, are seeking end-to-end delivery capability, and in particular, what [blah-blah-blah company] provides, namely, seamless integration of LPO domain deliverables in real time.  Through a combination of experiential interoperability on all platforms, multi-tiered process architecture, requirements traceability, process-mandated artifacts, context-dependent repositories, robust process-orientation, issue escalation, and clear project ownership, we are able to deliver best-of-breed, seamless knowledge management across geographical, time and project boundaries, and throughout the document lifecycle, to help our clients derive value from internal knowledge assets previously encapsulated in unstructured data trapped in islands unreachable by process execution.  Our domain expertise and skill sets satisfy not only the need for convergence of quadrant quality across processes, interfaces, and outputs, but also the increasing market fragmentation, in which clients otherwise seek to leverage application and legal process lifecycle activities through identification, prioritization and execution by multiple vendors, each using their own indigenous tools and benchmarked process performance.

I have just one question.  At what point in a "document lifecycle" does life begin?  Or in other words, is there some point where if you delete a document or toss it in the trash, you are having an abortion, or is it murder?  Just wondering.

Lawsuit Against Legal Process Outsourcing, Newman McIntosh & Hennessey vs. Bush, Is Withdrawn

13 days after Acumen Legal Services filed its motion to dismiss the lawsuit against legal process outsourcing to India, filed by a Maryland law firm in the Washington D.C. federal court, the plaintiff law firm, rather than respond to Acumen's motion, has withdrawn its case.  Confronted with the motion to dismiss, which was drafted by a team of Indian lawyers at SDD Global Solutions in Mysore (with further assistance from the team at Acumen Legal Services), the plaintiff U.S. law firm requested consent to further amend its complaint and expand the case into a class action on behalf of multiple U.S. law firms.  The day after that consent was refused, the plaintiff withdrew the lawsuit, asserting that the plaintiff firm was being dissolved. 

UPDATE:

Joseph Hennessey, the lead lawyer in the case, has posted a comment on this blog, announcing the preparation of a new lawsuit.  Hennessey now says he's busy hunting for "those who have been victimized by the use of foreign legal process outsourcers," so he can file "an action for damages on a class wide basis."  But judging from the first "example" he says he's found, where Indian doctors allegedly were used to assist in a surgery that "went horribly wrong," it looks like he still has more plaintiff-searching to do.   If anybody can see a connection between this allegedly botched surgery and legal outsourcing, please let us know! 

 

American Bar Association "Salutes" Outsourcing of Legal Services

No one seriously expected the American Bar Association to come out against the legal services outsourcing to India, or as many call it, "legal process outsourcing" or "LPO."  After all, the ABA historically has been a finger-in-the-wind organization.  Today the wind blows against exorbitant legal fees and law firm inefficiencies that for too long have been a burden on the economies and even ordinary citizens of the West.  It blows in the direction of globalization -- of legal services without borders.  Ethics panels from New York City, Los Angeles County, San Diego, Florida, and North Carolina already have stated what should be obvious, which is that there is nothing necessarily unethical about having legal work done by lawyers or non-lawyers at off-shore providers, so long as the work is carefully supervised and edited by attorneys admitted to the bar in the U.S. jurisdiction where the work is being delivered.

So what is surprising about the recent ABA Formal Ethics Opinion 08-451 is not that the ABA Standing Committee on Ethics and Professional Responsibility fell in line with the other panels.  The surprise is that the ABA Committee came right out and "saluted" the outsourcing of legal services: "The outsourcing trend is a salutary one for our globalized economy."  In the Opinion, the ABA Committee went on to mention that "outsourcing affords lawyers the ability to reduce their costs and often the costs to the client," allowing law firms to better represent clients "effectively and efficiently."  In the words of the Committee, which apply to in-house counsel as well as law firms: "There is nothing unethical about a lawyer outsourcing legal and non-legal services, provided the outsourcing lawyer renders legal services to the client with the 'legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.'"  (Quoting Model Rule 1.1.)  

Regarding the ethical requirements imposed on in-house or outside counsel sending legal work overseas, the ABA Committee offers the following guideline: "At a minimum, a lawyer outsourcing services... should consider conducting reference checks and investigating the background of the lawyer or nonlawyer providing the services, as well as any non-lawyer intermediary involved."  I already can hear the cries of the anti-outsourcing Luddites, who will point out that the ABA is not even requiring background checks -- only that outsourcers "consider" conducting them.  It is true that there are hardly any outright prohibitions or mandatory proscriptions in Opinion 8-451, and certainly no new ones (and the ABA does not have authority to issue binding rules anyway, since that is left to the various state bar panels), but there is plenty of advice.

For example, the ABA Committee suggests that "in some instances, it may be prudent to pay a personal visit to the intermediary's facility, regardless of its location or the difficulty of travel, to get a first-hand sense of its operation...." (emphasis added).  I agree.  By all means come to India, and especially Mysore!  The people and culture are wonderful; the weather and natural beauty are amazing; and there are few things more exciting than taking a front-row seat to watch, or better yet, to participate in, a world in transition.  First-rate legal outsourcing companies can only benefit from on-site visits by prospective clients.  Law firms and corporations interested in legal outsourcing can learn first-hand that the professionalism, enthusiasm, and efficiency of Indian lawyers at such providers compare favorably with any law firm in the West.  Prospective clients also can learn that at the best Indian legal off-shoring companies, the work is carefully supervised by Western-licensed attorneys, who also train the Indian lawyers in the applicable law and practice.

The ABA Committee further recommends that "when engaging lawyers trained in a foreign country, the outsourcing lawyer should first assess whether the system of legal education... is comparable to that of the United States." In a previous article for LexisNexis, I commented on how U.S. law schools, just like Indian ones, do not teach students how to practice law.  I discussed how the legal training provided by at least one Indian legal outsourcing company (mine!) is superior in many ways to the training provided in the West.  But even if the foreign training falls short, the ABA does not prohibit outsourcing.  The Committee states that "the lack of rigorous training or effective lawyer discipline does not mean that individuals from that nation cannot be engaged to work on a particular project.  What it does mean... is that it will be more important than ever for the outsourcing lawyer to scrutinize the work of the foreign lawyers...."

In the Opinion, the panel further states that in some circumstances, it "may" be necessary (a) to advise the client that an outsourcing provider is being employed, and (b) "perhaps to obtain the client's informed consent...."  In these times, when virtually all major corporations are already present in India, and when many forward-looking corporations are insisting that their outside law firms send legal work offshore, this advice should not be hard to follow.  I was speaking not long ago with a partner at one of the largest U.S. law firms, who told me that before being allowed to pitch for business at some of America's biggest companies, his firm was required to fill out a questionnaire.  The form included the question:  "What are your capabilities in the area of outsourcing legal work to India?"  Modern clients are not afraid to hear about legal services off-shoring -- they are demanding it.

Regarding data security and confidentiality, the ABA Committee recommends non-disclosure agreements and conflict checks. This is a no-brainer, and it should be implemented with U.S. law firms as well, even where no legal outsourcing abroad is involved.  Interestingly, despite the loudly publicized, anti-outsourcing lawsuit by a Maryland law firm, alleging all kinds of dangers to confidentiality, based on speculation that U.S. government spies are seizing and poring over all of the zillions of pages of mostly boring data being sent to legal services vendors in India, (see the motion to dismiss), the ABA Opinion contains no mention of this allegedly grave threat.  Instead, the Committee urges outsourcers to "consider" whether documents "may be susceptible to seizure in judicial or administrative proceedings" in a foreign country.  I have not thoroughly researched this, but none of the many lawyers I know in India are aware of anything the democratic government in that country is doing, or is allowed to do, that is more intrusive or violative of privacy than what the Bush administration already is doing in the United States.

On the subject of fees, the panel repeats the usual requirement that the charges to the client must be "reasonable," and it notes that if the outsourced work is billed to the client as an out-of-pocket expense of the law firm, "no mark-up is permitted," beyond "a reasonable allocation of associated overhead" or "the cost of supervising those services," unless there is "an agreement with the client authorizing a greater charge."  According to the ABA Committee, none of this requires the outsourcing law firm to bill for the work in India as a separate disbursement, or "to inform the client how much the firm is paying," so long as the legal fees charged by the law firm are not "unreasonable."  In other words, the loopholes are large enough for even the largest of law firms to drive through with an eighteen-wheel truck loaded with legal fees.

Lastly, the Opinion includes the obligatory warning against "the unauthorized practice of law," while making sure to point out that "this Committee lacks the authority to express an opinion" as to what that is.  This topic is of course a minefield, given that thousands of U.S. law firms, big and small, use paralegals, summer associates, interns, newly-minted associates, and others not admitted to any bar, to perform all sorts of legal services, ranging from legal research, to legal drafting, to document review and coding.  If utilizing excellent, U.S.-law trained, Indian lawyers to do this work were held to be "the unauthorized practice of law," then by analogy, nearly the entire U.S. legal world would be in trouble.

In short, the ABA panel, far from standing in the way of legal off-shoring, has embraced it, with mostly common sense caveats that are no impediment to this growing trend.

To see a copy of the ABA press release and summary of the Opinion, as well as a link to the full Opinion itself, click here.

Shock, Horror, Stop the Presses – Western Legal Work Being Done in India!

A DAY IN THE LAW

I read the news today oh, boy
About a law firm gone to India.

And though the news was rather blah,
Well, I just had to laugh;
I knew the world was flat.

People blew their minds out with the shock;
They didn't notice that the times had changed.
A crowd of others stood and sighed;
They'd seen this thing before;
Nobody was really sure why everybody wasn’t bored.

 

(apologies to Lennon and McCartney)

 

It’s amusing to watch all the hullabaloo about mega-law-firm Eversheds announcing that at some point, it will outsource some of its “small commercial contracts” work to India.  It shows how even after several major media and trade articles on the subject of legal off-shoring, much of the law world remains remarkably unaware of what's going on. 

 

It reminds me of a moment in October, 2006, when The New York Times reported, as if it were shocking, that mega-law-firm Clifford Chance was sending secretarial and bookkeeping work to a center near Delhi.   I had to laugh.  By 2006, nearly every major company in the world had been using routine business process outsourcing (BPO) in India for years.  More funny was the fact that the article (“Law Firms Start to Adopt Outsourcing,” October 27, 2006) made no mention of the outsourcing of legal services.  This was despite the fact that other law firms and companies already had been sending not only secretarial work, but legal work, to India for so long that an Indian legal outsourcing industry had emerged.  By the date of the article, Pangea3 had been growing for two years, and Atlas Legal Research had been around for about five, not to mention 20 or more other legal outsourcing companies in India at the time.

 

Since then, Clifford Chance reportedly has created a team of seven Indian paralegals and six Indian law graduates to add to the ranks of its India personnel at Integreon.  A couple of thousand or more Indian attorneys (7500 if you believe the research analysts) are performing Western "legal process outsourcing " (LPO) and other legal services at a host of other vendors.  Exactly a year ago, the giant U.S. law firms Jones Day and Kirkland & Ellis went public with the fact that they were handling the outsourcing of legal work to India at the insistence of their clients.

 

And now, some in the legal media world, especially its blogosphere, are all aflutter, because of a report that Eversheds “has signed a contract with a third-party [Indian] provider to outsource small commercial contracts that are too expensive to carry out in the U.K. or in-house.”  Well, please excuse me if I’m underwhelmed.

 

But putting unwarranted feelings of "industry insider" superiority aside, I’m happy to see this happen, and I wholeheartedly agree with much of what Eversheds is saying to the press.  For example, its commercial group head, Jonathan Guest, is quoted as saying: “Clients like the concept [of outsourcing work] but want someone to establish the process and provide verification.  From our perspective we are bringing a solution to a perceived client need - we will hopefully be introduced to new clients through this and it will lead the way for the firm to act for them on larger scale work.”

 

We’ve seen this happen over and over again at SDD Global Solutions, where corporate and law firm clients alike, who otherwise never would have plunged into legal outsourcing, are doing so because our managing U.S. law firm, SmithDehn LLP, is supervising the operation.  What’s more, this is leading to further work, for both the law firm and the outsourcing company. 

After one of the major Hollywood studios entrusted both firms with legal research and drafting on a film project last year, the studio's parent company recently came to SmithDehn with a request to increase the scope of the work. In-house counsel wanted help with a series of multi-million-dollar deals involving the online licensing of a vast portfolio of film and television content to all of the major internet providers.  When we performed our ethical obligation by telling him that we envisioned some of the work being handled by outstanding, U.S. law-trained Indian attorneys, he said the following: "Not only do we approve the involvement of SDD Global, we're insisting on it!"  He said it was precisely because the project was so "important" that the company wanted to involve our India legal outsourcing affiliate. The company wanted "no stone unturned" on this assignment, and it knew from experience that “big firm” outside attorneys would charge exorbitant fees and would not deliver a superior result.  (An interesting rebuttal to those who say legal outsourcing is okay for relatively inconsequential projects, but never for "bet-the-company" or other major matters.)

The above was one of several situations where our law firm has gotten business that it would not otherwise have received, thanks to legal outsourcing to India. In fact, we’ve seen legal work that would not even exist at all, for any law firm, if not for legal services off-shoring. 

For example, SDD Global in India is handling nearly all of the litigation work for the defense in a high-profile media libel case in California, with supervision by SmithDehn and local counsel.  Without legal outsourcing to India, battling this lawsuit would not have made economic sense.  As so often happens, the defendants would have simply paid the plaintiff to go away. This would have been just to avoid usual U.S. legal fees, even though the case has no merit.  But with an Indian team doing most of the work, it is less expensive for our client to fight the suit, than to settle it. 

The implications of this case may be significant. If and when it is dismissed on summary judgment, the lesson heard far and wide will be that frivolous lawsuits can be defeated on the merits, instead of settled simply out of fear of legal fees. And as a result, more work will be created for U.S. lawyers, not less.

As the Eversheds partner reportedly said, regarding the contract work it plans to send to India: “the outsourcing scheme will actually ­create work that would otherwise not be done…. It’s not taking work away from anyone…. It’s actually creating work out of contracts that would ­otherwise sit in a metaphorical drawer.”

 

So much for the tired myth that legal off-shoring is necessarily bad for Western lawyers.  For Western law firms that appreciate its benefits, outsourcing to India can be a ticket to survival and growth.

Acumen Fights Back

INDIAN LEGAL SERVICES COMPANY
COMPANY MOVES AGAINST U.S.
ANTI-OUTSOURCING LAWSUIT IN
WASHINGTON D.C. FEDERAL COURT

Acumen Legal Files Motion to Dismiss
in Newman McIntosh & Hennessey vs. Bush

In a legal case apparently designed by a U.S. law firm to place roadblocks in the way of the fast-growing legal services outsourcing industry in India, the Indian lawyers are fighting back.

Newman McIntosh & Hennessy (“NMH”), a U.S. law firm worried about off-shoring of legal work, sued India-based Acumen Legal Services, along with U.S. President George Bush, in the Washington D.C. federal court.  NMH is suing on the basis of speculation, unsupported by even a single example, that the government is intercepting all or most of the data sent by U.S. lawyers to foreign legal outsourcing providers, as part of an anti-terrorism campaign.  Seizing on that speculation as an excuse, NMH seeks a court order against “all United States-based attorneys” who outsource legal work to India and "all foreign legal outsourcing providers."

Thanks to a motion to dismiss and supporting legal brief drafted entirely in Mysore, India, the NMH law firm is getting an unexpected taste of the kind of high-quality legal work that Indian lawyers can provide, even in the Washington D.C. federal court.  In their brief on the motion to dismiss, the legal team for Acumen points out the following:

NMH’s requested declaratory and injunctive relief, in addition to having no legal or factual justification, would reach far beyond NMH’s obviously intended target, namely, low-cost foreign legal outsourcing companies, which NMH apparently perceives as competition. The requested relief could have a substantial adverse effect on the operations of all law firms that have foreign offices, and all U.S. corporations that need to use foreign counsel to transact business abroad.  NMH’s requested ruling that any foreign electronic transmission of data between clients and attorneys, or between attorneys, constitutes a waiver of constitutional rights and discovery privileges, would amount to an untenable and unwarranted interference with global commerce.

 

Moreover, NMH’s request for an order requiring all attorneys in the United States, including in-house counsel, (a) to search for every instance in which they ever transmitted any kind of data to any foreign national, and (b) to send a notification regarding the same in every case, presumably to the owner of the data, would amount to one of the most onerous and unjustified burdens ever imposed by any court in a civil proceeding.

 

In addition, by requesting the Court to issue declarations answering seven hypothetical legal questions, purportedly because the NMH law firm “need[s] guidance,” wants “to gain certainty,” and “must understand” various points of law to help the firm “in an increasingly globalized legal services environment,” NMH seeks relief that is impermissible under well-established principles governing declaratory judgments.  The NMH lawyers, in essence, are seeking to outsource their legal research tasks to this Court, and secondarily to Acumen, President Bush and their respective counsel.

 

NMH’s Complaint is extraordinary, not only for what it contains, but even more so for what it does not.  Nowhere in the Complaint does NMH allege:

• any example of an actual or impending injury to itself or to anyone;
  
• any actual or impending violation of Fourth Amendment rights; 
  
• any instance of an actual or impending waiver of Fourth Amendment rights;
  
• any basis for finding a waiver of Fourth Amendment rights, given that NMH does not allege that any Fourth Amendment rights are being violated by the supposed government interception of data;
• any instance of an actual or impending breach or waiver of attorney-client privilege or confidentiality;
  
• any actual or impending example of government interception of data;
  
• any actual or impending instance of transmission of data to any foreign nationals by anyone;
  
• any basis for NMH’s speculation that electronic transmissions to foreign nationals are more likely to fall  into the hands of the government than are domestic transmissions, which are subject to possible domestic surveillance by law enforcement agencies;
  
• any examples of actual or impending conduct within  the  District of Columbia by  any of the parties;
  
• any relationship or interaction of any kind among any identified persons or entities in the District of Columbia or anywhere else;
  
• any monetary dispute or requested monetary relief that could support the “amount in controversy” requirement for NMH’s assertion of diversity jurisdiction;
  
• any legal or factual basis upon which this court could grant the sweeping declaratory and injunctive relief sought against millions of non-parties, such as every lawyer in the United States, and every foreign legal outsourcing company;
  
• any reason why NMH cannot avoid the speculative dangers it alleges by simply (a) continuing to refrain from using foreign legal outsourcing providers, and (b) seeking a protective order in any litigation where NMH believes that its clients’ data may be sent by adversaries to such providers;
• any legal or factual basis upon which the court could require the Executive Branch to “prevent the waiver of Fourth Amendment rights” or “safeguard the attorney-client privilege and client communications and client confidences and secrets;” or
• any reason why protection is needed beyond the statutory protection already provided by Congress, under which “[n]o otherwise privileged wire, oral, or electronic communication intercepted in accordance with, or in violation of, the [applicable government surveillance provisions] shall lose its privileged character.”  See e.g. 18 U.S.C. § 2517(4); 50 U.S.C. § 1806(a).

In short, as further discussed in the remainder of this brief, NMH has not even come close to meeting the most basic requirements for standing or personal jurisdiction.

A full copy of Acumen’s motion is available at http://www.sddglobal.com/Acumen_SDDGlobal.pdf

SDD Global was hired to work on the defense, and I'm very impressed with the team of Indian lawyers and paralegals who researched and drafted the motion.  In fact, the product was so good that the local D.C. attorney, a former partner at Bingham and veteran of Morgan Lewis & Bockius and Skadden Arps, and a Harlan Fiske Stone Scholar at Columbia Law School (which means he is smarter than me, since I did not win that award when I was at Columbia, maybe because I was too busy wasting time in New York nightclubs) did not see a need to make any significant changes before filing.

Stay tuned for further developments in the case.

Lows and Highs

In part to show how fast things are moving in the small but growing world of legal outsourcing, copied at the bottom of this post is a cover story I wrote 10 months ago for the new Indian legal magazine from LexisNexis.  The article is already seriously out of date.

For one thing, the number of “legal process outsourcing” providers has doubled again, to around 200 or so. For another, it seems my cheerleading statement that one of the key features of our industry will be the “movement of legal offshoring work from back office functions for Western law firms, into high-end, knowledge and judgment-based legal services for corporate clients” was not quite accurate, or at least was premature.  Yes, there is much more work being sent by corporate clients, but “back office functions” are alive and well, and spreading!  The key driver of our industry right now is not higher-end, intellectually challenging work.  That kind of work continues to be overwhelmed by document coding, form-filling, transcript-digesting, e-discovery processing, and other low-hanging fruit.  As the popular expression goes, but this time without irony, “hey, somebody’s gotta do it!” 

With the help of some brilliant young Indian lawyers in the industry who have shared their (non-confidential) experiences with me, I’ve recently been able to take a vicarious inside tour of the current “LPO” landscape.  Below are a few postcards from the trip:  (My previous article was too relentlessly upbeat, so now I'll try to make amends.)   

• Several companies have large investor funding and big, shiny offices, full of people doing soporific tasks that most law associates in the U.S. don’t want to perform. 

• Many companies are managed not by lawyers, Western or otherwise, but by former BPO executives not very familiar with law firms or legal work.  In some of those companies, legal training is nearly non-existent.  Which is fine, since not much in the way of legal services is being provided.

• A pioneer company, which once focused with pride upon high-end legal research and drafting, is now doing mostly document-coding.  Another leading company, one of only a few performing work that requires legal skill, is moving in the same direction. 

• Some providers are promoting their large employee “strength” (an interesting term, when so many Western companies see large numbers of employees as a weakness), but most of the people occupying the seats are either non-lawyers, or worse, in the hard words of one of my sources, “the lawyers with zillions of years of experience, but who cannot write a single sentence in correct English.”  But as Seinfeld would say, "not that there's anything wrong with that!"  Paralegal work is as much an honorable profession as any other, and there are countless tasks in the law world that don't require good English writing skills.

• One of the “Top Ten” legal outsourcing vendors, from the 2008 “Black Book of Outsourcing” list, provides mainly clerical and secretarial services.  Again, clerks, secretaries and word processors are valued parts of many legal operations, but I have to admit that I don't usually think of them as legal services providers.

• I'm less thrilled with reports that in the name of “data security” and “confidentiality,” employees at a number of companies are treated more like prison inmates than lawyers.  Would-be professionals are frisked as they enter and leave, CCTV cameras are trained on their every move, internet-usage is banned, and permission must be obtained to go to the toilet. (Call me crazy, but I always figured that if you treat someone like a criminal, this will increase, not decrease, the chances of him becoming one. And what’s with the frisking?  Unless you’re doing a full body cavity search, how can frisking stop someone from walking in and out with a pen drive or an iPhone camera?  With the recent attacks in Bangalore and Ahmedabad, I guess terrorism-prevention may now become the watchword, but if legal companies are hiring bombers as lawyers, then we may be in worse trouble than anyone imagined.) 

• Rather than moving into lower-cost, so-called “Tier-2” cities, most companies continue to locate themselves in Indian metro areas, some of which now have higher office and residential rents than New York, London, or Los Angeles, along with much heavier pollution and congestion.  One Indian LPO employee describes the process of her getting to and from work as a “twice-daily nightmare.”  Another, who commutes two hours each way, told me his only social life is in his car pool. 

• With very few exceptions, informed rumors have it that the focus on low-end, back-office work, while generating heavy volume in many cases, is not generating any profit.  I hope the investors don't pull out (which is something I’ve encountered on an “up close and personal” basis, on the higher-end side), because the aftermath may not be pleasant. 

Having said all that, the current prevalence of so-called "low-end" work is really no mystery, since (1) this is the kind of work that law firms and some corporate clients are most comfortable in sending to India on a high-volume basis at present, (2) higher-end work for the most part requires extensive training and supervision by Western lawyers, to whom most Indian legal outsourcing companies have little or no access, (3) nearly all of these companies lack a strong connection, much less an affiliation, with a Western law firm that can help provide credibility and accountability to clients and get higher-end work from them, and (4) if it were not for "low-end" work, some of these providers would have no work at all. 

As for our company, we’re nowhere near the point of giving up on the dream of helping to develop the functional equivalent of a global law firm in India.  In fact, the steps toward that goal are being implemented every day.  I see smart, enthusiastic Indian law graduates eagerly soaking up the kind of high-quality training that Western law firms and law schools don’t adequately provide.  I see them working on challenging assignments, using their brains to provide legal research, analysis, drafting, and problem-solving for Western and Indian clients alike, and all at a fraction of the cost of traditional law firms.  This may not be the norm right now, but it is happening.

By contrast, the system currently imposed on clients in the U.S. and U.K. by the Western legal establishment, with its increasingly exorbitant fees and inefficiencies, remains untenable.  It reminds me of the old Soviet Union, which seemed strong on the surface, but which collapsed like a house of cards.  (Another analogy, provided by Mike Dillon, General Counsel of Sun Microsystems, is that of dinosaurs.  Mark Chandler, General Counsel of Cisco Systems, provided yet another, referring to the traditional law firm model as "one of the last vestiges of the medieval guild system.")  As Western clients start to revolt on a mass scale, one of the alternatives to the current system will be legal outsourcing.  Even large law firms will need to get on the bandwagon to survive.  Forward-thinking law firms will embrace it, and profit from it.

So I continue to believe the now still-nascent legal offshoring industry will help bring about a paradigm shift in the way legal services are delivered in the West.  I still think it will be a monumental, history-making development -- one that will help Western economies as well as India’s.  Call me a dreamer, even the only one if you want, but I still believe this change will contribute to a better, more equitable world, in which artificial barriers across countries and continents do not hold back the most efficient and enthusiastic people from performing the work they can do best.   

Now, here’s that “old” article, from the October 2007 debut issue of Halsbury’s Law Monthly, the magazine for the Indian legal industry, published by LexisNexis and Cyber Media.
 

BEYOND THE BACK OFFICE:

How Legal Outsourcing Companies in India Are Moving Up the Value Chain

Lawyer jokes are as popular in India as they are in the West. “How many lawyers does it take to change a light bulb?” Answer: “How many can you afford?” Here’s a better one: “How many U.S. lawyers does it take to draft a successful legal brief in a complex case before the United States Supreme Court?” The answer is, “none!” Indian lawyers at legal services offshoring companies have already been there, done that.

If the Indian legal outsourcing business were a rocket or a space shuttle, we would have to say that the days of conceptualizing, of building and experimenting with launch prototypes, are over. This rocket ship is also past the ignition stage. It is taking off.

Four years ago, you could count the number of Indian legal outsourcing providers on one hand. Now there are over 100, with many more reportedly in the works. Revenues recently have more than doubled, to $146 million in 2006.[1]  The number of employees has tripled since 2005, to approximately 7,500.[2] Research analysts predict that LPO revenues and employee numbers will reach $640 million and 32,000, respectively, by 2010.[3]

Those predictions are conservative. The actual potential is much greater. Speaking from experience, I can tell you that the majority of legal services in the West can and should be sent offshore. Bradford W. Hildebrandt, chairman of the prominent legal consulting firm, Hildebrandt International Inc., has stated that "ultimately, there may be little limit to what can go offshore." [4] And we are talking about services that now fetch a price tag of $250 billion per year and growing. [5]

One of the key drivers of this phenomenon has been, and will continue to be, the movement of legal offshoring work from back office functions for Western law firms, into high-end, knowledge and judgment-based legal services for corporate clients who are sick and tired of the traditional Western law firm delivery model. We are witnessing the start of a positive, paradigm shift in the way that legal services will be delivered in the West.

A Few Words About Terminology

The term, “LPO,” for “legal process outsourcing” (which also stands for the London Philharmonic Orchestra and the Libertarian Party of Ohio), is apparently a media invention, first appearing in 2005.  It derives from BPO, or business process outsourcing. But to the extent that the word, "process," suggests standardized, commoditized, easy-to-replicate tasks that can be performed without a lot of education, much less any professional training, it is a misnomer for the legal services offshoring industry.  Typing a medical transcription, or answering calls based on a script, is a "process."  On the other hand, legal research, legal analysis, or drafting complaints, contracts, patent applications, or legal briefs, is not a BPO-like, commoditized "process."  Those are legal services, even if they do not amount to "practicing law," which can only be done by the supervising, licensed attorney (often in-house corporate counsel) who reviews the services that so-called LPO companies provide.

That is why many in this industry do not refer to themselves as “LPOs.”  One company uses the phrase, a "provider of global legal and patent outsourced services."  Another refers to itself as a "premium legal services company."  Others refer to their "Legal Knowledge Services" or "Offshore Legal Services."  Still another has adopted the label of "legal services organization."

Yet another potential misnomer is “outsourcing.”  There is nothing new or controversial about the outsourcing of legal services.  Every law firm in the U.S. and the U.K. is an outsourcing company.  Their corporate clients have routinely “outsourced” legal services work to outside counsel for hundreds of years.  If there were no outsourcing, there would be no law firms. What is new is not outsourcing, but offshoring.  What is new is the creation of a worldwide legal landscape, where offices and employees will be located in places determined by the actual needs of clients, rather than the habits of law firms that do not wish to change.

Moving from the Conceptual to the Real

If it does not involve walking into court, holding a client’s hand, signing an opinion letter, or signing a court filing, most likely it can be done in India.  Western legal services available in India include legal research, drafting of commercial contracts and litigation papers, applications for U.S. and U.K. immigration visas, patent applications and analytics, and a whole host of other high-value work.

Indian lawyers at the legal services offshoring company, Lexadigm, already have drafted a brief filed in the U.S. Supreme Court, involving the application to a tax dispute of the due process clause of the Fifth Amendment to the U.S. Constitution. [6]  For another example, in an article entitled, “Fortune 500 Firms Driving LPO Industry,” one of India’s leading financial newspapers, The Business Standard, reported on one of SDD Global’s accomplishments as follows:

[One of the major Hollywood film studios] had to [obtain] an ‘opinion letter’ (outlining the activity and the risks involved) for insurance firms in order to secure cover for shooting a movie, and the movie’s fate hinged on the letter and the cover.  Preparing the letter was a 400-man hour job which would have cost $250,000 to get done in the U.S., and [the client] gave it a second thought. Eventually, the job was done in  India for $43,000. [7] 

SDD Global’s draft of this 45-page opinion letter, complete with 242 footnotes, each citing pertinent legal authorities, led to the greenlighting of a major motion picture, which might otherwise have not been released.

To cite another example, Atlas Legal Research in Bangalore, together with Atlas’s U.S.-licensed, supervisory attorneys in Dallas, were hired to draft a 50-state legal survey for a U.S. medical services company.  Here is a portion of a “thank you” letter written by the CEO of a grateful client:

You may not be aware, but we had a small portion of that research complete when we hired Atlas. As a test, we had your team reproduce some of the same work done by our nationally recognized law firm. The legal research and opinions that your team produced were essentially identical, except for the price tag. 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. [8]

For one last example, out of countless others, SDD Global was retained by a Fortune 100 client facing a multi-million-dollar out-of-state lawsuit, brought by a plaintiff who had agreed in writing that any such dispute would be litigated only in New York.  A major U.S. law firm in the state where the claim had been filed had advised our client that a motion to dismiss would not succeed, citing two authorities.  In-house counsel for the client asked SDD Global to prepare a memorandum on the subject.  Overnight, Indian attorneys did the research and provided the memo, which allowed the client to conclude that the local law firm was wrong, and that the lawsuit could be dismissed.  This led to the following unsolicited email from the client’s Senior Vice President for litigation:

"[The memo] lifted my spirits and gave me reason for hope.  It's really well written and clear, by the way.  Let your Indian team know that I applaud and thank them.  Thank you!!!"

Why are Indians so good at handling high-end, offshored legal work?  In addition to the fact that India churns out 80,000 English-speaking law graduates per year and shares the same “common law” system with the U.S. and Britain, here is another factor, reported by ABC News:

It's a three thousand year old reverence for knowledge. In fact every college we went into had the goddess of knowledge. They consider study a form of worship, and parents see education as the only way out of those slums so they will skip meals to send their kids to private schools. [9]

The Urgent Need for Legal Services Offshoring

The Western legal services industry is in trouble. According to a survey of in-house legal department heads at hundreds of leading companies in the United States, which represents 77% of the global legal services market, [10] only 30% of those companies would recommend their primary outside law firm to others.[11]  Moreover, fully 53% of them recently fired their primary outside law firm.[12]  According to Business Week magazine, “[f]ew industries seem more ripe for radical restructuring than legal services.” [13]

The reasons are easy to understand.  The traditional model propagated by large Western law firms, which Clay Christensen of Harvard Business School refers to as “just about the most profitable businesses in the world,” [14] is not serving the interests of their clients.  The model is based on a pyramid structure, with most of the services provided by over-worked, under-trained young lawyers beholden to a billable-hour system. The system rewards the partners at the top for the junior lawyers’ inefficiency and padding of time sheets, at the expense of clients who pay increasingly unaffordable hourly rates.  At the same time, the pyramid system causes the young lawyers to quit, almost faster than the law firms can fire them to make way for younger recruits -- yet another pillar of the system. Indeed, 40% of associates quit even before they finish their third year. [15]

In a recent speech, Mark Chandler, the General Counsel of Cisco Systems, tackled these issues head on. Describing the traditional law firm model as “the last vestige of the medieval guild system,” Chandler mentioned offshoring to India as one of the solutions, and delivered the following shot across the bow, referring both to the young law associates and the large law firm system in general:

Upending one’s life to support inefficient means of communication, driven by a billable hour system, to maintain a relatively slim chance of making partner, just doesn’t cut it. And when the next generation heads for the exits, it’s a sign of a business model under stress…. But if the economic system of the [large Western law] firm is frustrating to associates and even some partners, I can tell you that from the standpoint of a metric driven general counsel, it is more than incomprehensible. It looks like the last vestige of the medieval guild system to survive into the 21st century. [16]

These conclusions were echoed even more recently by Mike Dillon, the General Counsel of Sun Microsystems, who compared inefficient Western law firms to dinosaurs:

[T]he epoch of the current law firm model - which derives its profitability from growing scale and raising hourly rates - will soon be over. The firms that will survive and thrive are those that recognize this change and focus on how to maintain margins by focusing on efficiency…. Hopefully, more firms will embrace this change. If they don't, I fear they will go the way of the Mastodon. [17]

Instead of embracing change, many Western law firms are continuing their old ways, some to even greater extremes. Hourly billing rates have increased over 30 per cent in the last few years. [18]  Starting salaries for untrained lawyers, straight out of law school, have climbed to $160,000 per year. [19] In  London,rates for big firm lawyers have reached the unprecedented level of £1000 (nearly $2000) per hour. [20] At the same time, the mega law firms Jones Day and Kirkland & Ellis recently admitted publicly that they are now offshoring legal work, in response to client demands.   All of this bodes very well for the legal services offshoring industry in India

Like the U.S. auto industry, which mostly ignored warnings and continued to focus on the manufacture of over-sized, over-priced, fuel-inefficient cars, the Western legal industry will be dragged into either change or extinction by its customers, helped by foreign competition.  However, just as the “Buy American” bumper stickers were too late and too little to stop Toyota from becoming the world’s largest automaker, it is unlikely that anything will stop the legal services offshoring industry in  India from stepping into the breach, to ultimately provide most of the legal work that is urgently needed by the West.

Three Myths About Legal Services Offshoring

Expert business research analysts have concluded that “law firms and corporates are fast moving toward offshoring more complex tasks to vendors, as their comfort levels improve.” [21] Nevertheless, despite (or maybe because of) the amazing success stories in the field of high-end offshoring, there remain some naysayers.   For example, Gregg Kirchhoefer, a partner at Kirkland & Ellis, one of the biggest and most profitable law firms in the  U.S., estimates it could be 50 years before lawyers in  India do more than "routine, prosaic" American legal work. [22]  The pessimists often rely on one or more of three myths about legal services offshoring, each of them discussed below. 

MYTH NUMBER ONE: Indian Lawyers Lack the Skills and Aptitude to Handle High-End Legal Work for the West

Attacks on the competence of Indian lawyers and law graduates are about as valid as saying that Indian software engineers are incapable of handling sophisticated IT work.  To the contrary, the Indian IT industry is a world leader, and the same will be the case with offshored legal services.

A. Indian Legal Training vs. Western Legal Training

Legal education in both India and the English-speaking West serves essentially the same purpose – to train its graduates to “think like lawyers” and to teach them how to conduct research in the British-based, common law system.  Western law schools, however, do not train students to practice law.[23]  A recent study conducted by Harvard Law School and LexisNexis reveals that 75% of U.S. law graduates admit they do not have the necessary skills to practice law. [24]  Interestingly, when young lawyers were asked what is the one thing that they wish they had learned, the most frequent answer was “how to draft a motion.” [25] Yet, motion practice is at the heart of litigation services provided to clients by law firms.

Since Western law schools are mostly litigation-oriented, their failure to train students in the most basic of litigation skills is especially disappointing.  However, clients who pay high hourly fees for corporate and transactional work by U.S. law graduates are short-changed even further.  It is typical for Western law students to graduate from law school without ever having learned how to draft a contract.

So you would expect that these deficiencies would be met by rigorous training programs undertaken by Western law firms. Guess again! The Harvard / LexisNexis study reveals that 64% of young lawyers receive no organized, on-the-job training. [26]  They learn as they go along, by trial and error, with their firms’ corporate clients footing the bill.

By contrast, reputable legal services offshoring companies in India provide rigorous training for their lawyers, and the hours spent on training do not appear on invoices to clients.  At SDD Global Solutions, for example, all of our Indian attorneys are trained by veteran Western practitioners who are at the top of their fields. Our training program accomplishes what Western law schools and law firms have failed to achieve, namely, the systematic preparation of young lawyers to provide quality legal services.

B. English Communication Skills in and the West

George Bernard Shaw, and later, Winston Churchill, famously referred to Britain and the United States as two countries “separated by a common language.”  Because Indian legal education is conducted in English, and because India generates 80,000 English-speaking law graduates per year, [27] similar statements have been made about the difference between English communication skills in India and the West.  What these accusations miss is the fact that, at least in the U.S., many law graduates are incapable of writing effectively in plain English.  That is why some large U.S. law firms now assign a writing coach to each incoming associate, to help eradicate the stilted, circuitous, jargon-filled style that often plagues Indian legal writing as well. [28] However, most lawyers in the West never receive this kind of training. By contrast, reputable legal services offshoring companies in India provide training in English writing for all of their attorneys.

C. The U.S.  Bar Exam vs. Indian Leaving Exams

In India there are no bar exams.  Instead, Indian law students, unlike U.S. law students, must pass a comprehensive final or “leaving” exam in order to graduate.  But in part because India has no bar exam, some commentators have suggested that Indian lawyers working for legal offshoring companies should be required to pass a certification test, to demonstrate their ability to provide Western legal services.  This is an admirable effort.  But who will develop a certification system for Western lawyers, many of whom lack skills needed to properly practice law?  Regarding bar exams in the U.S., they sometimes seem to serve mostly as a public relations device for the legal profession.   New York University Law Professor Harold I. Subin goes so far as to say that they test “nothing relevant to the practice of law”:

The bar exam…. is good public relations for the legal profession. Most people are unaware that the exam tests nothing relevant to the practice of law and therefore feel that the organized bar is protecting clients against unqualified lawyers.

 

The bar exam is the final degradation ceremony through which one must pass to join what is sometimes called the legal fraternity…. The term is apt, with the bar exam serving the same socializing purpose as hazing [known in India as “ragging”]: drinking in useless legal data is the profession's equivalent of swallowing goldfish or great quantities of beer, and leads on exam day to a similar regurgitative result. [29]

 

MYTH NUMBER TWO: “You Get What You Pay For,” or in Other Words, Low Cost Equals Low Quality

The tremendous cost savings available from legal services offshoring are sometimes met with disbelief. Partners at large law firms in particular are prone to making comments such as “you get what you pay for.” First, let’s examine what a client pays for when it hires the typical large Western law firms (although there are exceptions):

(a) staggering real estate costs, due to the location of office space in some of the most expensive locations in the world, most of which are at least 43 times more expensive per square foot than SDD Global’s office building in Mysore, India; [30]

(b) having most of the work done by newly minted (and sometimes even unlicensed) associates who admittedly lack many of the skills needed to practice law, but yet are paid a starting salary of $160,000 per year, and who are learning as they go along, at the expense of clients, who in turn are charged as much as $360 or more per hour for the privilege; [31]

(c) padding of time sheets and/or an unnecessary stretching out of work assignments, encouraged by an hourly billing system that rewards fraud and inefficiency, as young associates struggle to meet ever-increasing demands to increase their billable hours, with yearly quotas that have risen from 1600 hours in the 1960’s, to 2100-2500 hours at many large firms today;[32] and

(d) generally a high-quality level of service, due to editing and supervision by talented senior lawyers, but at a cost that clients are no longer willing to tolerate, especially when offshore providers offer flat rates and hourly rates that average from $25 to $90 per hour for high-end work, and $10-25 per hour for lower-end work, as compared to $300-2000 per hour for Western lawyers. [33]

When a client hires a reputable legal offshoring company in India, whether directly or through a forward-thinking law firm that passes along the savings, the client pays for high-quality, efficient, and timely legal services, performed by enthusiastic and qualified lawyers at locations that serve the best interests of the client.  So yes, “you get what you pay for!”

MYTH NUMBER THREE: The Higher the Level of Work, the More Risk of Ethical Violations or Breaches of Confidentiality

An issue sometimes has arisen as to whether the high-end legal research and drafting services provided to Western clients from India amounts to an unauthorized practice of law. Fortunately, this is becoming a non-issue.  Ethics panels in New York, Los Angeles, San Diego, North Carolina, and Florida all have concluded that that the offshoring of legal work to unlicensed attorneys is permissible, so long as the work is supervised by a licensed attorney. [34] The New York Times has quoted Stephen Gillers, a professor at NYU School of Law and legal ethics expert, as stating that “‘[t]here is no problem with off-shoring…because even though the lawyer in India is not authorized by an American state to practice law, the review by American lawyers sanitizes the process.’ ” [35]

In fact, virtually all major law firms in the U.S. routinely use non-licensed attorneys to perform legal work, and they bill their clients for it.  The hours of summer associates, who have neither graduated from law school nor passed a bar exam, are billed out to clients at rates as high as $260 per hour or more.[36] Moreover, the work of first-year associates, who start work at law firms before their bar exam results are in (and who often fail on their first attempt), is billed out to clients for as much as $360 per hour or more. [37] This is all permissible, because the work is supervised by licensed attorneys.

The same is permitted in the case of legal offshoring firms in India. At SDD Global Solutions, for example, we are an India offshoring company managed by a U.S. law firm, such that all of the work by Indian attorneys is supervised, reviewed, and edited (if needed) by licensed U.S. attorneys.  Several other high-end legal offshoring companies also have licensed U.S. attorneys on their payroll, or at least affiliated with the offshoring unit. Even where the offshoring companies themselves do not employ licensed attorneys, the work can be supervised by in-house counsel for corporate clients, or by Western law firms who act as intermediaries, hiring the offshore unit on behalf of their clients.

On the subject of confidentiality, this is a legitimate concern of clients, regardless of whether the legal service provider is a Western law firm or an offshoring company in India.  Based on my experience both with U.S. law firms and the provision of legal services in India, I believe that quality offshore providers generally are doing a better job than U.S. law firms in addressing this issue.

For example, at SDD Global, we use secure, hack-resistant IBM servers, and the latest Cisco ASA firewall to protect data and systems from internet vulnerabilities.  Even more protection is provided by a Linux environment throughout our 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 using a custom-made electronic access card.  Our offices are virtually paperless, and passwords are required for all data access.  Most importantly, we take great care in selecting employees.  We hire only one out of every 900 applicants, and only after a lengthy battery of evaluations and tests, as well as a thorough background check.  SDD Global is not alone in this attention to security. As research analysts have reported regarding our industry, “vendors have invested significantly in systems and processes to ensure data security – often to a greater degree than their overseas clients.” [38] 

Compare this with many U.S. law firms, where Microsoft-based networks are vulnerable to hacking, where paper trails abound, where employees are able to roam the offices at will, and where in one famous case, a person posing as an attorney was entrusted with the management of important client files, even though this felon had never attended law school or passed the bar exam. [39]

The Future of the Legal Services Offshoring Industry 

Given the factors discussed in this article, the future of the legal services offshoring industry in India appears bright. Below are a few predictions:

• Corporations, not Western law firms, will drive the market in the years ahead.  Law firms currently provide 45% of the business for the industry,[40] and more and more of them will hire offshore providers, but this will be driven mainly by the dictates of corporate clients.   For example, a major Detroit auto manufacturer approached SDD Global for offshore litigation support.  When we asked what the reaction of their usual outside law firms would be to most of the legal work being done in India, the answer was unambiguous: “Our outside law firms will operate the way we tell them to.” 

• Another way that corporations will drive the market, indirectly, is by obtaining flat (or fixed) rate billing from their outside counsel, instead of hourly billing.  For example, the mega law firm, Morgan Lewis & Bockius, now handles all of the litigation for Cisco Systems for a fixed annual fee. [41]  This kind of billing can radically alter the dynamics of Western law practice, as law firms working for flat rates will have a compelling incentive to reduce hours and costs, instead of increasing them as before. Flat   rate billing will cause many law firms to realize that offshore providers can be important allies in improving their bottom line, rather than competitive enemies. 

• Every sector of the legal offshoring industry will grow dramatically, including lower end services, such as document coding and legal transcription. Ultimately, however, the biggest impact, the long-term mother lode, will be higher-value services such as legal research and drafting – services that constitute the bulk of the legal work now done in the West. 

• One of the keys to the growth in higher-value services will be the ability of providers in India to affiliate with, or hire, licensed attorneys in the West, to supervise the work, train the Indian lawyers, and market the services.  Offshoring companies that can do this will have an edge. 

• Legal outsourcing companies who locate or re-locate in so-called “Tier 2” cities like Mysore, where the quality of life is high, and the costs of living and operating are low, will also have an edge.  On the subject of Mysore, a major consulting company delivered a comprehensive report to a Fortune 500 client, concluding that this city of one million people has half the cost of living, and less than half the employee attrition rates, as compared with "Tier 1" cities. 

• The continued boom in the industry will lead to continued and increased competition among offshoring providers for legal talent in India.  At the same time, as the public profile of the industry grows and improves, an increasing number of law graduates and young lawyers will gravitate to the industry, and more of the best and brightest among 12th-graders will decide on law as a career.  However, during the lag between the current pool of talent and the increase in that pool in the future, the competition for the best law graduates and lawyers will be won mostly by the high-end providers.  This is because higher-value work tends to be more interesting and challenging, and because the higher profit margins allow for higher salaries. 

• Training will be central to the industry’s success. Training will be especially critical as providers move up the value chain in relation to their services, and as they recruit more deeply into the pool of available talent, most of whom will be fresh law graduates  with no experience in working for Western clients. Outside companies, such as Rainmaker Training & Recruitment, [42] which help offshore providers by locating and training excellent job candidates, will thrive as they address this increased demand.  

• Long-term, India’s enormous, mostly untapped population of over one billion citizens will continue to make India competitive in relation to other offshore destinations.  The shift from unsustainable agricultural jobs to employment in the knowledge industry will be slow and circuitous, as impoverished young people from farms move into low-level service sector positions, and as lower-level service workers, in turn, upgrade their education and move into knowledge-oriented work.  But it will happen, and ultimately it will help not only decrease poverty, but increase the number of law graduates. 

• On the most positive note, the growth and development of the legal offshoring industry in India will help bring about a paradigm shift in the way legal services are delivered in the West. This will be a monumental, history-making development.  It will help economies around the world as well as India’s. It will contribute to a better, more equitable world, in which artificial barriers across countries and continents do not hold back the most efficient and enthusiastic people from performing the work that they do best.

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[1]  ValueNotes, An Update, 2, July 2007: Offshoring Legal Services to India.

[2]  Id.

[3]  Id.

[4]  Business Week, Let's Offshore The Lawyers (Sept. 18, 2006), available at http://www.businessweek.com/magazine/content/06_38/b4001061.htm

[5] Business Standard, Fortune 500 firms driving LPO industry (Aug. 8, 2007), available at http://www.businessstandard.com/common/storypage_c.php?leftnm=10&autono=293702

[6]  Keith Woffinden, Surfing the Next Wave of Outsourcing: The Ethics of Sending Domestic Legal Work to Foreign Countries Under New York City Opinion, Brigham Young University Law Review 2007, available at http://lawreview.byu.edu/archives/2007/2/5WOFFINDEN.FIN.pdf

[7] Business Standard, Fortune 500 firms driving LPO industry (Aug. 8, 2007), available at http://www.businessstandard.com/common/storypage_c.php?leftnm=10&autono=293702

[8]  Letter from Michael Gorton, J.D., TelaDoc CEO, to Mr. Rocky Dhir, Atlas Legal Research, LP (July 2005).

[9]  See ABC News Report On Outsourcing To India, available at http://youtube.com/watch?v=FwwgXCOEYks

[10]  ValueNotes, 8, December 2005.  Offshoring Legal Services to  India.

[11]  BTI Consulting Group’s Fifth Annual Survey of Corporate Counsel, Client Satisfaction with Law Firms Plummets (Mar. 3, 2006), available at http://www.bticonsulting.com/bti_news.htm

[12]  Id.

[13]  Business Week, Let's Offshore The Lawyers (Sept. 18, 2006), available at http://www.businessweek.com/magazine/content/06_38/b4001061.htm

[14]  The Official Cisco Blog, Cisco General Counsel on State of Technology in the Law, http://blogs.cisco.com/news/2007/01/cisco_general_counsel_on_state.html (Jan. 25, 2007, 14:13).

[15]  Elizabeth Goldberg, Is This Any Way to Recruit Associates? (Aug. 6, 2007), http://www.law.com/servlet/ContentServer?pagename=OpenMarket/Xcelerate/View&c=LawArticle&cid=1185820712334&t=LawArticle

[16]  The Official Cisco Blog, Cisco General Counsel on State of Technology in the Law, http://blogs.cisco.com/news/2007/01/cisco_general_counsel_on_state.html (Jan. 25, 2007, 14:13).

[17]  Posting of Mike Dillon to The Legal Thing, The Way of the Mastodon, http://blogs.sun.com/dillon/entry/the_way_of_the_mastodon (May 22, 2007).

[18]  Douglas McCollam, The Billable Hour: Are Its Days Numbered? The American Lawyer, November 28, 2005, available at http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1132653918886

[19]  Posting of Amir Efrati to The Wall Street Journal Blog, Associate Survey: Want to Leave? Big Law’s OK With That, http://blogs.wsj.com/law/2007/08/01/amlaws-associate-survey-want-to-leave-big-laws-ok-with-that/ (Aug. 1, 2007, 11:17).

[20]  Frances Gibb, Cost of a top lawyer in the City soars to £1,000 an hour (July 2, 2007), Timesonline, http://business.timesonline.co.uk/tol/business/law/article2013519.ece

[21]  ValueNotes, Offshoring Legal Services to India:  

An Update, 8, July 2007.

[22]  Eric Bellman and Nathan Koppel, More U.S. Legal Work Moves to India’s Low-Cost Lawyers (Sept. 28, 2005), available at http://www.bickelbrewer.com/377.html

[23]  Earl Cherniak, Lawyers must fight 'disturbing trends', Vol. 16, The Lawyers Weekly, Nov. 29, 1996 at 28, quoting Andrew J. Siegel, Broadcast Counsel for CBS Inc. (“Hundreds of young lawyers are either dissatisfied with their positions or out of work. With the economy in such bad shape, firms are just cutting lawyers. Unfortunately, law school teaches you how to think like a lawyer, but it doesn't teach you how to practice law.").

[24]  Koo, Gene, New Skills, New Learning: Legal Education and the Promise of New Technology, Berkman Center Research Publication No. 2007-4, 1 (March 26, 2007), available at http://cyber.law.harvard.edu/~gkoo/NewSkills,NewLearning-Published.pdf

[25]  Business Week, Let's Offshore The Lawyers (Sept. 18, 2006), available at http://www.businessweek.com/magazine/content/06_38/b4001061.htm

[26]  See Koo, Gene, New Skills, New Learning: Legal Education and the Promise of New Technology, Berkman Center Research Publication No. 2007-4, 17 (March 26, 2007), available at http://cyber.law.harvard.edu/~gkoo/NewSkills,NewLearning-Published.pdf

[27]  ValueNotes, Offshoring Legal Services to

India: An Update, 33, July 2007.

[28]  Jeremy Harrell, Growing Number of Law Firms are Coaching Their First-Year Associates (May 26, 2006), available at http://findarticles.com/p/articles/mi_qn4189/is_20060526/ai_n16436703

[29]  Harry I. Subin, Why the Bar Exam Is Absolutely Crucial, N.Y. Times, Aug. 3, 1990, at A26.

[30]  In Mysore, SDD Global pays approximately $2.85 per square foot per year in rent for modern office space in an upscale area of the city. In midtown Manhattan, SDD, the law firm, pays 43 times that rate, or $65 per square foot.

[31]  Anna Schneider-Mayerson and Jesse Wegman, My Very Special Summer (June 19, 2007),

New York Observer, available at http://www.observer.com/2007/my-very-special-summer?page=0%2C3

[32]  Posted by Douglas Litowitz on associates and his book, Destruction of Young Lawyers' of Legal Ethics Forum blog, http://legalethicsforum.typepad.com/blog/2007/02/douglas_litowit.html (Feb. 09, 2007).

[33]  ValueNotes, Offshoring Legal Services to India: An Update, 2, July 2007; See also Charlotte Libov, Small Law Firm Established to Outsource Service to India, Jan. 4, 2007, available at http://www.idiligence.net/files/Miami%20Today%20article.pdf ; Frances Gibb, Cost of a top lawyer in the City soars to £1,000 an hour (July 2, 2007), Timesonline, http://business.timesonline.co.uk/tol/business/law/article2013519.ece

[34]  N.Y.C. Bar Assoc. Formal Op. 2006-03 (2006); LA County Bar Assoc. Op. 518 (2006); SDCBA Formal Legal Ethics Op. 2007-1; See http://www.floridatrend.com/law_article.asp?cName=Law%2520and%2520Government&rName=Of%2520Counsel&whatID=4&aID=2761734.7445642.614042.6194988.7119191.720&aID2=47225 (“Two committees of the Florida Bar have taken notice of the practice and have decided, so far, that legal outsourcing is acceptable under certain conditions”).

[35]  Ellen L. Rosen, Corporate America Sending More Legal Work to

Bombay, N.Y. Times, Mar. 14, 2004, at 1.

[36]  Anna Schneider-Mayerson and Jesse Wegman, My Very Special Summer (June 19, 2007),

New York Observer, available at http://www.observer.com/2007/my-very-special-summer?page=0%2C3

[37] Id.

[38]  ValueNotes, Offshoring Legal Services to

India : An Update, 37, July 2007.

[39]  Posted by Peter Lattman, Anderson Kill Lawyer, Er, Paralegal Arrested, to law BLOG, http://blogs.wsj.com/law/2007/01/11/anderson-kill-lawyer-er-paralegal-arrested/ (Jan 11, 2007, 9:15am).

[40]  ValueNotes, Offshoring Legal Services to

India: An Update, 44, July 2007.

[41]  The Official Cisco Blog, Cisco General Counsel on State of

Technology in the Law, http://blogs.cisco.com/news/2007/01/cisco_general_counsel_on_state.html (Jan. 25, 2007, 14:13).

[42]  For more information on Rainmaker, see the company’s web site at http://www.rainmaker.co.in 

Legal Process Outsourcing: Efficient and Ethical?

The following is a newly revised version of a paper (updated and corrected after it was first posted on other legal blogs) published here with the permission of the author, Maya Karwande.  Maya is a senior at Tufts University, majoring in Political Science with a certificate in Peace and Justice Studies.  She originally wrote this paper for a seminar, Judicial Solutions, taught by Daniel Winslow.  Maya can be contacted with comments or questions at mayakarwande@gmail.com  The paper is copyrighted by, and reproduced with permission from ILW.COM

Legal Process Outsourcing: Can Offshoring of Legal Services to India Be Both Efficient and Ethical?

            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 will ultimately be 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 is 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.[1]

            Lexadigm’s work on a Supreme Court case is an example of the latest 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.[2] 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.[3]  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.[4]   Driven by the increasing cost of legal services and demand for efficiency and cost savings, LPO conceptualizes the legal services industry using business terms.

            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. My goal in this paper is to identify the ethical dilemmas of LPO, the current situation regarding guidelines and regulation, and discuss solutions to ensure LPO is not only efficient, but ethical as well.

            Part I will provide a brief history and background of LPO, including a summary of the types of processes being outsourced, structural models of the industry, and potential benefits and drawbacks. Part II will outline the challenges of LPO in regard to quality assurance, supervision and the specific legal ethical considerations of conflict of interest, confidentiality, disclosure and client consent, and billing. Part III will discuss current mechanisms in place to address the concerns surrounding LPO.  This part will be divided into two sections, the first addressing initiatives of self-regulation within the LPO industry and the second addressing regulations from the American legal community.   Part IV will identify the weaknesses and potential of the mechanisms in place and propose an integrative solution that suggests brining together formal guidelines from the American Bar Association and standards for self-regulated accreditation within the LPO industry.  Part V concludes with a brief discussion of the potential normative implications offshoring may have for the legal industry.

I. HISTORICAL CONTEXT AND BACKGROUND 

            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.”[5]  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.[6]

            Within Business Process Outsourcing is the specialized subset of Knowledge Process Outsourcing (KPO).  KPO broadly refers to “legal and financially complex business process outsourcing.”[7]  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.[8] 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 recent 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 they predict will increase to 32,000 by the end of 2010.[9]

            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 $300 million in 2010, and $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.[10]

            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[11]           

            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.[12]  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.”[13] 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.[14]  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.[15] 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.”[16] 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.[17]

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. [18]  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. [19]

            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 Gurgaon, India.  Now there are almost 30 lawyers at the center responsible for supporting the majority of legal work of the company.[20] 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, are teaming up with Patent Metrix, an Irvine-California based law firm.[21] 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.[22] 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.[23] 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[24]

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.”[25]

      Currently, Indian lawyers will generally charge $40-$60 an hour for work their American counterparts would normally bill at $120-$300.[26] This produces an average savings of 30-70%, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM).[27] 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.”[28]  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.[29]  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.[30]  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.[31]  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.[32]

      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.[33]  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.[34]  Finally, the overwhelming reasons cited for resistance to offshoring are ethical considerations and liability concerns.

II. ETHICAL CONSIDERATIONS AND CHALLENGES

“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[35]

            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.”[36] Section 5.5 (b) further elaborates that a lawyer that is not admitted to practice in this jurisdiction shall not:

                (1)  Establish an office or other systematic and continuous presence in this jurisdiction for the practice of law.

          (2)   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.” [37]  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.[38] 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.[39]

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.[40]           

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.”[41] 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.[42]  In taking these two opinions together, it would be logical to extrapolate that a U.S. attorney assumes supervisory responsibilities.[43]  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.”[44]

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.[45]

Confidentiality

“At SDD Global, secured, hack-resistant 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[46]

            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.[47]  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.[48]  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.[49] 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.[50] 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”[51] 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.[52]

            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."[53]  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.[54] This requirement is further colored by the nature of the work being offshored and the level of supervision between the lawyer and offshoring company.[55]  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.[56] 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.”[57] 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.[58]  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.[59]  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.”[60] 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.[61]  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.[62]

            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.[63]  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.[64]  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?”[65]           

            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.[66]

            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?[67]

            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.[68]

  III. CURRENT MECHANISMS

            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.

Legal Regulations

“We have not either endorsed it or opposed it”

-   Nancy Slonim, American Bar Association Deputy Director for Policy Communications[69]           

            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.”[70] 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.”[71]  This makes the Rules extremely ambiguous, as there is extreme diversity between states. Arizona, for example, has no UPL code.[72]  

            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.[73] 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.”[74] 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 in the last two years.  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.[75]  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.[76] The first GLP was administered on September 16^th, 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.”[77] 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.[78] 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.[79]  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[80]           

            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 applicants.[81] 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.’”[82] 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.[83]

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.[84]

            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.[85]

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.[86] 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:

                    1) Define of “the practice of law,” and thus unauthorized practice.

                    2) Specify criteria necessary for adequate “supervision,” in acknowledgement of the                      special situation of foreign lawyers.

                    3) 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.[87]

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.[88]

V. CONCLUSION

            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 commoditization 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. has recently passed the Legal Service Bill, which allows the creation of Alternative Business Structures. 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 commoditization of the British legal industry.[89]

            The United States is likely to follow the United Kingdom ’s lead in regard to the commoditization 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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[1] Daniel Brook, "Made in India: Are Your Lawyers in New York or New Delhi?" LegalAffairs (May-June 2005), http://www.legalaffairs.org/issues/May-June-2005/scene_brook_mayjun05.msp.

[2] Mark Tuft, “Offshoring of Legal Services: An Ethical Perspective on Outsourcing Abroad” 717 Practicing Law Institute (PIT)/LIT 97 (Dec.2004-Jan.2005), Westlaw: 1-9.

[3]Eric Bellman, and Nathan Koppel. "Legal Services Enter Outsourcing Domain." The Wall Street Journal Online (September 28^th, 2005): 1-4 http://pangea3.com/images/WSJ_29Sep2005.pdf.

[4] Offshoring Legal Services to India: An Update. 2007.ValueNotes: ValueNotes Database Pvt. Ltd: 1-5.

[5] Mark B. Baker. "The Technology Dog Ate My Job: the Dog-Eat-Dog World of Offshore Labor Outsourcing." Florida Journal of International Law, 16 no. 807 (2004).

[6] Ibid.

[7] Russell Smith, "Beyond the Back Office: How Legal Outsourcing Companies in India are Moving Up the Value Chain." Halsbury’s Law Monthly (October 2007) LexisNexis.

[8] Smith, “Beyond the Back Office.”

[9] ValueNotes, Offshoring Legal Services to India..

[10] Legal Process Outsourcing (LPO) - Hype vs. Reality. Evalueserve (January 2006): 1-8.

[11] Bellman and Koppel, “ Legal Services Enter Outsourcing Domain.”:1.

[12] Joe Leahy. "True Extending of the Law's Long Arm Outsourcing" Financial Times

Asia Edition, November 1^st, 2006, LexisNexis.

[13] "The Emerging Indian Legal Offshoring Opportunity." FinancialWire, April 1^st, 2006. LexisNexis.

[14] Evalueserve, LPO- Hype vs. Reality.

[15] "The Extent of Legal Outsourcing Rises, as Intellevate Adds Patent Adjustment (PTA) Calculation Confirmation to Its Service Offerings." PR Newswire US, August 3^rd 2006. LexisNexis.

[16] "Integreon Ranked #1 Outsourcing Provider Globally." Business Wire, June 29^th, 2007. LexisNexis.

[17] Leahy,“ True Extending of the Law’s Long Arm Outsourcing.”

[18] "New Test to Push India's Legal Process Outsourcing Industry." Indo-Asian News Service, April 27^th 2007, LexisNexis.

[19]Bhaskar Kanare, “Why Indian Attorneys Opt for LPOs,” Law-Scribe Legal Process Outsourcing Blog,
December 28^th, 2007, http://blog.law-scribe.com/2007/12/why-indian-attorneys-opt-for-lpos.html.

[20] Leahy,“ True Extending of the Law’s Long Arm Outsourcing.”

[21] Evalueserve, LPO- Hype vs. Reality.

[22] Leahy,“ True Extending of the Law’s Long Arm Outsourcing.”

[23] Scott Wilson and Doug Brown, “ 2008 Top Ten Legal Process Outsourcing (LPO),” The Black Book of Outsourcing, http://theblackbookofoutsourcing.com/vendors-lpo-2008.htm.

[24] Bellman and Koppel, “ Legal Services Enter Outsourcing Domain.”: 3.

[25] Brook, “Made in India.”

[26] Evalueserve, LPO- Hype vs. Reality; Brook,“ Made in India.”

[27] "India's LPO Business to Grow by 6-7%: ASSOCHAM." Hindustan Times, May 15^th, 2006, LexisNexis.

[28] Smith, “Beyond the Back Office.”

[29] Evalueserve, LPO- Hype vs. Reality.

[30] Ibid.

[31] Bellman and Koppel, “Legal Services Enter Outsourcing Domain.”: 2.

[32] Evalueserve, LPO- Hype vs. Reality.

[33] Keith Woffinden. "Surfing the Next Wave of Outsourcing: the Ethics of Sending Domestic Legal Work to Foreign Countries Under New York City Opinion 2006-3." Brigham Young University Law Review
11:16:55 (April 2007): 483-530.

[34] Brook, “Made in India.”

[35] Damien Carrick "Outsourcing Legal Services." Transcript: The Law Report Radio Program. ABC Radio National W-D. February 1^st 2006

http://www.abc.net.au/rn/talks/8.30/lawrpt/stories/s1573652.htm.

[36] American Bar Association Model Rules of Professional Conduct, 5.5. [Hereinafter, MRPC]

[37] Darya Pollack, "I'm Calling My Lawyer...in India!: Ethical Issues in International Legal Outsourcing." UCLA Journal of International Law and Foreign Affairs 11 no. 99 (2006).

[38] San Diego County Bar Association Ethics Opinion 2007-1, http://www.sdcba.org/ethics/ethicsopinion07-1.htm.

[39] Tuft, “Offshoring of Legal Services: Ethical Perspective on Outsourcing Abroad.”

[40] LawScribe, Inc, “Outsourcing Legal Work Abroad Handout: Legal Outsourcing: the Ethical Implications,”(2007).

[41] New York City Car Association Committee on Professional and Judicial Ethics, Formal Opinion 2006-3 (August 2006), http://www.nycbar.org/Publications/reports/print_report.php?rid=503&searchterm=2006.

[42] MRPC 5.3(a).

[43] Tuft, “Offshoring of Legal Services: Ethical Perspective on Outsourcing Abroad.”

[44] Ibid.,4.

[45] New York State Bar Association Ethics Opinion 2006-3.

[46] Smith, “Beyond the Back Office,”: 26.

[47] Tuft, “Offshoring of Legal Services: Ethical Perspective on Outsourcing Abroad.”

[48] Alison Kadzik, "The Current Trend to Outsource Legal Work Abroad and the Ethical Issues Related to Such Practices." Georgetown Journal of Legal Ethics 19 no.731 (2006).

[49] Ann Sherman," Should Small Firms Get on Board with Outsourcing?" Law.Com- Small Firm Business September 12, 2005, <http://www.law.com/jsp/law/sfb/lawArticleSFB.jsp?id=1126256712489>.

[50] Ibid.

[51]Kadzick, “ Current Trend to Outsource Legal Work and Ethical Issues,”: 4.

[52] San Diego County Bar Association Ethics Opinion 2007-1.

[53] Ibid.

[54] Tuft, “Offshoring of Legal Services: Ethical Perspective on Outsourcing Abroad.”

[55] Ibid.

[56] Tuft, “Offshoring of Legal Services: Ethical Perspective on Outsourcing Abroad.”: 4.

[57] MRPC, 1.5.

[58] Tuft, “Offshoring of Legal Services: Ethical Perspective on Outsourcing Abroad.”: 4.

[59] Los Angeles County Bar Association Professional Responsibility and Ethics Committee No. 518 (June 19, 2006), http://www.lacba.org/Files/Main%20Folder/Documents/%20Ethics%20%20%20Opinions/Files/Ethics_Opinion_518.pdf

[60]Smith, “Beyond the Back Office,”: 20.

[61] MRPC 1.7.

[62] Kadzick, “ Current Trend to Outsource Legal Work and Ethical Issues.”

[63] Pollack, “ I’m Calling my Lawyer in India,”:15-17.

[64] Ibid.

[65] Ibid., 22.

[66] Ibid.,24.

[67] Ibid.,28.

[68] Ibid.,29.

[69] Tom Ramstack, "Law Firms Send Case Work Overseas to Boost Efficiency." The Washington Times September 26^th, 2005, http://www.lawschool.com/outsourcing.htm.

[70] Pollack, “ I’m Calling my Lawyer in India.”

[71] MRPC 5.5

[72] Pollack, “ I’m Calling my Lawyer in India.”

[73] Ibid.

[74] New York City Bar Association Ethics Formal Opinion 2006-3.

[75] Mark Ross, "Accreditation Standards for LPO?" Corporate Risk Advisors, LLC: LPO Network, Vol. I, No. 2 (June 1^st, 2007): 2-4, http://www.mynewsletterbuilder.com/tools/view_newsletter.php?newsletter_id=1409601504.

[76] "New Test to Push India's Legal Process Outsourcing Industry." Indo-Asian News Service

April 17th 2007, LexisNexis.

[77] Global Legal Professional, “How the GLP Benefits You” http://www.glptest.com/acceptingglp.htm-

[78] Ibid.

[79] Mark Ross. Telephone Interview. December 21, 2008.

[80] Rupali Shah,” Training LPO Attorneys,” (© 2007 Corporate Risk Advisors, LLC: LPO Network, Vol. I, No. 2, p. 6; reprinted with permission). <http://www.mynewsletterbuilder.com/tools/view_newsletter.php?newsletter_id=1409601504>.

[81]Smith, “Beyond the Back Office,”: 25.

[82] Pangea3, “Company Information,” http://www.pangea3.com/company_work.html.

[83] Mark Ross, “Legal Process Outsourcing (LPO): 2007 and Beyond” LawScribe Legal Process Outsourcing Blog, January 14^th, 2008, available at, http://blog.law-scribe.com/2008/01/legal-process-outsourcing-lpo-2007-and.html.

[84] Ross "Accreditation Standards for LPO?"

[85] Tariq Hafeez, “ Guest Post: Offshoring of Legal Research and Writing” Rahul, Jindal (Editor) Legal Process Outsourcing Blog (Rahul Jindal (Editor) January 1^st, 2008, http://legallyours.blogspot.com/2008/01/guest-post-offshoring-of-legal-research.html.

[86] Marcia Proctor. "Considerations in Outsourcing Legal Work."
Michigan

Bar Journal (September 2005), http://www.michbar.org/journal/article.cfm?articleID=904&volumeID=69.

[87] “LawScribe, Inc. Announced Its Seminar, LPO: Ethical Considerations Had Been Approved for MCLE Ethics Credit by the State Bar of CA." Business Wire, October 18^th, 2007. LexisNexis.

[88] Ross, "Accreditation Standards for LPO?"

[88] Mark Ross, “ The Legal Services Bill and its Impact on the Legal Process Outsourcing Industry,” LawScribe Outsourcing Blog, November 7^th, 2007, http://blog.law-scribe.com/2007/11/legal-services-bill-and-its-impact-on.html.