December 2011 - Outsourcing to Temporary Attorneys
by Erin Giglia and Laurie Rowen
It can be a good problem to have. Clients are pouring in, and your firm is so busy that you’re not sure how you and your team will finish everything and maintain the quality and level of customer service that attracted your clients. Your firm is delivering outstanding results to your clients, and is successful. But you and the attorneys at your firm are overwhelmed, and you need additional attorney help. Or maybe your clients are balking at high fees, even cutting bills and refusing to pay associate rates. You hesitate to hire new attorneys because of uncertain work-flow and collections, but you need to maintain high quality, your clients, and your firm’s reputation. You need help, but what are your options?
You may decide to seek help from temporary “contract attorneys” or “freelance attorneys” for short-term or continuous part-time assistance. A “freelance attorney” is a contract lawyer (here, one admitted in California) who provides attorney work by the hour, but typically on a higher level than the traditional contract attorney who primarily focuses on appearances and document review. Firms often rely on freelance attorneys to assist during periods of increased work such as trial preparation, to offer lower fees to firm clients, and to cover for vacation and maternity leave. All written work is approved and signed by an attorney employed by the law firm, rather than the freelance attorney.
Freelance attorneys and legal outsourcing can be an attractive model, but there are risks involved with outsourcing tasks to contract attorneys who may not be as experienced or supervised as closely as firm associates. Your clients’ interests and your firm’s reputation are at stake. A recent case filed in Los Angeles Superior Court highlights some of these risks. In J-M Manufacturing v. McDermott, Will & Emery, J-M Manfacturing alleges that McDermott improperly produced privileged and other documents—all because the firm did not thoroughly supervise and review the work of the contract attorneys who conducted a privilege review.
McDermott denies J-M Manufacturing’s allegations and is defending the lawsuit. This case is currently active, so the facts have not played out. But the lawsuit itself provides several significant take-away lessons. First, whether or not J-M Manufacturing’s allegations are accurate, the lawsuit serves as a reminder that it is always crucial to properly direct and supervise junior attorneys, whether associate, contract, or otherwise. The appropriate level of supervision will vary depending on the task and the attorneys involved.
The State Bar of California’s Committee on Professional Responsibility and Conduct (COPRAC) articulates in Formal Opinion 1992–126 that the hiring attorney is ultimately responsible for, and adopts the contract attorney’s work product as his or her own. The hiring attorney is responsible for the junior attorney’s work product, and must take all steps necessary to ensure that he or she performs work up to the firm’s standards.
Second, all attorneys, regardless of designation, must perform legal services competently. California Rule of Professional Conduct 3–110 (A) states, “A member shall not intentionally, recklessly, or repeatedly fail to perform legal services with competence.” Rule 3–110 (B) defines “competence” as the “diligence, learning and skill, and mental, emotional, and physical ability reasonably necessary for the performance of such service.” Because the hiring attorney or firm ultimately is responsible for a contract attorney’s work product, law firms must be aware of their contract attorneys’ backgrounds, experience, education, and training in order to meet the firm’s ethical duty to perform all legal services competently, including work performed by contract attorneys. The ABA has commented on the importance of using only skilled contract attorneys in Formal Ethics Opinion 08–451, “There is nothing unethical about outsourcing legal . . . services, provided the outsourcing lawyer renders legal services to the client with the ‘legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation,’ as required by Model Rule 1.1.”
Outsourcing raises additional ethical issues pertinent to both the firm and the contract attorneys. These duties are addressed in detail in a variety of ethics opinions. Specifically, firms and contract lawyers should address conflicts of interest (including imputed conflicts) (ABA Formal Opinion No. 88–356 and COPRAC Formal Opinion 1992–126), the duty to preserve client confidences (COPRAC Formal Opinion Nos. 1992–1266 and 1993–133; LACBA Formal Opinion 518), the duty to disclose the contract or freelance relationship to your client in certain situations (COPRAC Formal Opinion 2004–165), appropriate billing including fees and surcharges to your client (California Business and Profession Code §§6147–48; 6068(m) and California Rule of Professional Responsibility 4–200), and notifying your firm’s professional liability carrier.
Where does this leave busy law firms and attorneys that need short-term help with substantive legal work? Both California and the American Bar Association have opined that utilizing contract attorneys is ethical within certain parameters designed to minimize risks to both the law firm and the client. While the authorities do not specifically say it, one approach is to hire only experienced freelance attorneys, and to properly direct and supervise those attorneys.
Experienced attorneys will generally know the right questions to ask, when to flag an issue, and when they need to seek assistance on a judgment call, much more readily than an inexperienced attorney. Law firms and their clients are often tempted by inexpensive hourly rates, but should use extreme caution when outsourcing what may seem like mundane legal tasks. An experienced freelance attorney is a worthwhile investment, especially since your intent is probably to make life easier for you, your firm, and your clients.
When used properly, legal outsourcing, contract, or freelance attorneys can be an excellent resource for law firms and their clients to get the assistance they need during peak times and to provide cost-saving options to clients. The recent McDermott lawsuit teaches us to exercise caution, to hire experienced freelance attorneys whenever possible, and to always properly direct and supervise attorneys.
Erin Giglia and Laurie Rowen are co-owners of Montage Legal Group. Erin and Laurie previously practiced at Snell & Wilmer, LLP. Erin is also Of Counsel with Hewitt Wolensky, LLP, Newport Beach.