Law Without Borders

"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.