(Note: This post was initially published on LinkedIn, and the following iteration is a syndicated version of the same.)
First, we must share the value we provide, including return on investment, cost savings, innovation, and predictability.
Second, we need to demonstrate our professionalism, including our training, experience, and knowledge of the substantive and procedural law, as well as the applicable technology.
Finally, we must provide customers with peace of mind, so they understand how our services comply with the law, ethics, and professional responsibility.
In our experience, the first two principles – value and professionalism – are handily explained to customers through things like case studies and biographies.
However, the third principle – peace of mind – is more difficult, since it involves an amalgam of laws, opinions, rules, regulations, and recommendations. We can see your eyes glazing over.
So, allow us to take a few minutes to describe what forces are at play for customers to be comfortable outsourcing their contract management.
ABA’s Opinion 08-451
The American Bar Association’s (ABA) Opinion 08-451 states in relevant part:
“The outsourcing trend is a salutary one for our globalized economy. Labor costs vary greatly across the United States and throughout the rest of the world.
Outsourcing affords lawyers the ability to reduce their costs and often the cost to the client to the extent that the individuals or entities providing the outsourced services can do so at lower rates than the lawyer’s own staff.”
“There is nothing unethical about a lawyer outsourcing legal and nonlegal services, provided the outsourcing attorney renders legal services to the client [in compliance with ethical obligations].”
Ethical Rules & Considerations
Ethical rules implicated by legal outsourcing include Competence (Rule 1.1), Unauthorized Practice of Law (Rule 5.5), Duty to Supervise (Rules 5.1 & 5.3), Attorney-Client Privilege & Confidentiality (Rule 1.6), Client Conflicts of Interest (Rules 1.7, 1.9 & 1.10), as well as considerations of Data Privacy and Export Controls.
The ABA has further clarified Rule 5.5 to provide that lawyers cannot engage in outsourcing when doing so would facilitate the unauthorized practice of law.
ABA Guidance on Model Rules 1.1, 5.1 & 5.3
ABA guidance on Model Rule 1.1 provides that the outsourcing lawyer must ensure delegated tasks are being performed by individuals competent to perform them by, among other things, determining whether potential conflicts are investigated, checking references, reviewing resumes, examining facility security, and ensuring data is protected.
ABA guidance on Model Rules 5.1 & 5.3 provides that the outsourcing lawyer must ensure the vendor’s conduct is compatible with the lawyer’s ethical obligations, including competence.
Outsourcing need not reduce supervision and control so long as the vendor and customer maintain frequent communication, the engagement is documented with defensible processes and procedures, and the engagement’s work product is kept confidential.
Those U.S. state and local bar associations, as well as courts, that have weighed in on legal outsourcing have done so favorably, including Los Angeles, New York, Washington, D.C., San Diego, Florida, Virginia, North Carolina, and Ohio.
Long-standing ABA Approval
We find customers really do gain peace of mind when they realize the ABA’s approval of legal outsourcing, including contract management, goes back more than a decade. But let’s add one more recent opinion to the supporting authorities:
In the midst of the Coronavirus epidemic, the ABA released Formal Opinion 498, which recognized that technology like video conferencing and enterprise software had accelerated the concept of the virtual office.
In many ways, legal outsourcing tasks like contract management are simply professional, efficient, and convenient extensions of the virtual office.
Expect nothing less than value, professionalism, and peace of mind from your contract management vendor.