How outsourcing legal research can enhance efficiency for law firms. Learn practical strategies to optimize your practice.
Key Takeaways
- Time and Cost Savings: Outsourcing legal research and writing to freelance lawyers and alternative legal service providers allows you to manage your time more effectively and reduce overhead costs during peak periods.
- Ethics: Firms must follow ethical guidelines when outsourcing, including transparent billing and client consent.
- Access to Expertise: By outsourcing legal tasks, firms can tap into expertise and improve quality control so they can focus on high value work and client satisfaction.
Small firms and solo practitioners frequently choose to outsource legal research and brief writing to contract attorneys for a simple reason: time. Court deadlines are unyielding, and caseloads fluctuate wildly. Delegating these tasks allows you to scale your practice seamlessly during peak periods without the overhead of permanent hires.
Before you delegate your next brief, review these five core ethical and operational principles, followed by the emerging trends shaping the future of Legal Process Outsourcing (LPO).
5 Essential Rules for Legal Outsourcing
1. Turn a Profit on Freelance Work
With one exception,* all of the bar associations that have addressed the issue (including, most notably, the American Bar Association) have determined that a lawyer may add a surcharge to a freelance lawyer’s fees—in other words, make a profit on work performed by a freelance lawyer — as long as the total charges to the client are reasonable. See:
- ABA Formal Opinion 08-451 (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services)
- ABA Formal Opinion 00-420 (Surcharge to Client for Use of a Contract Lawyer)
- ABA Formal Opinion 88-356 (Temporary Lawyers)
* The exception is the Professional Ethics Committee for the State Bar of Texas. However, the committee’s reasoning in Opinion 577 (March 2007) is questionable.
2. Bill Services as a Fee, Not an Expense
If you are making a profit on work performed by a freelance lawyer, to comply with ethics requirements, you must bill the freelance lawyer’s services as a fee (i.e., in the same manner as you would bill for your own time), rather than as a disbursement (i.e., in the section of the bill detailing expenses incurred for such items as court reporters).
As long as payment of the freelance lawyer’s fee isn’t contingent on the outcome of the litigation, you’re not required to disclose how much you’re paying the freelance lawyer; in other words, you don’t have to reveal the amount of your profit. This position makes sense: After all, if an associate (i.e., your employee) was working on a client’s matter, you wouldn’t be obliged to reveal the associate’s salary to your client.
3. Maintain Ultimate Competency Responsibility
The defining characteristic of the relationship between a hiring firm and a freelance attorney is the hiring firm’s continued responsibility for rendering competent legal services to the client.
The hiring firm must ensure that it delegates work to freelance lawyers who are competent to perform the work and oversee the performance of the work adequately and appropriately. As with an attorney employed by your firm, the degree of supervision required depends on the freelance lawyer’s skills and experience. If you prefer not to maintain supervisory responsibility, you may want to consider a referral or co-counsel relationship instead of an outsourcing relationship.
4. Utilize Out-of-State Freelancers Legally
A freelance lawyer who is performing legal writing services or research need not be admitted in your state. This is because the freelance lawyer is not a counsel of record, and is considered to be working under the hiring attorney’s supervision.
5. Obtain Client Informed Consent Upfront
You should obtain your client’s informed consent before hiring a freelance lawyer. Comment 6 to ABA Model Rule 1.1 (Competence) instructs that a hiring attorney should ordinarily obtain the client’s informed consent before hiring a freelance lawyer. Many state and local bar associations have issued ethics opinions requiring disclosure under some circumstances, and others mandate disclosure under all circumstances. The safest route (particularly if you practice in a state that hasn’t yet issued a governing ethics opinion) is to disclose and obtain the client’s consent to, your use of a freelance lawyer. If you’ll be billing an experienced freelance lawyer’s services to your client at a rate lower than your own, this process can actually be an opportunity to demonstrate your commitment to achieving the best possible result for the client at the lowest cost.
You may want to add the following paragraph to your retainer agreement:
You are hiring the firm for representation and not any particular individual. The firm may assemble the team of professionals best suited to serve your needs at each stage of your matter. The firm may share with these professionals information about your case as necessary for them to carry out their responsibilities. All non-firm personnel are subject to the firm’s ongoing supervision and applicable ethics regulations. You expressly consent to the firm’s use of these professionals and to the disclosure of information as necessary for them to serve your needs.
The Future of LPO is Looking Good
The future of LPO is looking good with law firms and corporate legal departments looking to reduce costs, increase efficiency and improve quality. Here are some of the things that will shape the future of LPO:
- More AI and Automation: AI tools will become more common in LPO, law firms will be able to automate routine work and focus on higher value work. More efficiency and accuracy in legal processes.
- More Focus on Quality Control: Law firms will focus more on quality control to ensure outsourced legal services meet their standards and requirements. This will involve robust review processes and close collaboration with service providers.
- More Demand for Specialized Expertise: Law firms will be looking for specialization in IP, data privacy, and cybersecurity. LPO providers with expertise in these areas will see more demand. This will be driven by the increasing complexity of legal issues and need for specialization.
- More Focus on Cybersecurity: Law firms will focus more on cyber security to protect client data and prevent cyber threats. This will involve advanced security protocols and working with LPO providers that put data protection first.
The Bonus: Outsourcing Legal Services Can Lead to Happy Clients
A law firm can benefit significantly when they choose to outsource legal research and writing to a freelance lawyer who specializes in these tasks. A specialized contract attorney can often complete the work in less time than a busy practitioner, who may not be as familiar with the available resources or as experienced in searching large databases for sometimes elusive answers. Ultimately, outsourcing legal research and writing allows you to leverage specialized expertise, maximize your billable hours, and deliver better, more cost-effective results to your clients.
Photo by Christina @ wocintechchat.com #wocintech on Unsplash.
