Ethical Aspects of LPO: The Question of Attorney-Client Privileges and Confidentiality

Outsourcing legal work is not a new concept. Rather, the law firms have been outsourcing their legal work to domestic contractors for years. The only major distinction between using a contract attorney in U.S and that of LPO is that in LPO work is done by the attorneys and paralegals stationed offshore. The whole process of legal outsourcing is to the extent of providing third party or a captive supports and solutions to United States Attorneys and Law Firms in their work. It does not entail any direct legal practice and representing the clients before the courts. In other words the process of LPO is a caterer to the United States legal practitioner work.

The American Bar Association ("ABA") has already addressed the issue of outsourcing in the context of domestic outsourcing and contract attorneys. The recommendations of ABA provide the most significant source of information for understanding the ethical implication of LPO. Even then LPO raises separate ethical issues that attorneys need to be careful of while structuring this unique business relationship.

Unlike with BPO and KPO, LPO is capable of attracting business from U.S law firms and corporate for many reasons. The first and foremost is that LPO can make save substantial amount of money and bring down the administrative costs for its clients. And above all Indian lawyers are paid just a fraction of the remuneration earned by U.S. lawyers. In addition to the cost benefits, the LPO can deliver high quality work, in reduced turn-around-time and can also reduce churn for associate attorney.

Some of the LPO providers initially did not consider confidentiality and data security to be that important for the LPO business. But these are something more than just a simple desire to protect trade secrets. By downplaying these concerns the LPO providers failed to understand the role of ethics and attorney-client privilege that plays a very important role in U.S. legal profession and in its own business interest.

The concern for confidentiality and ethics has made the existing LPO players raise their levels of security and at the same time they need to be more aware of the ethical offshoots associated with legal outsourcing work. The growth of LPO depends to a large extent on its ability to perform and sensitize workers to that layer of responsibility. LPO raises some interesting issues as well and also regarding the ethical responsibility of an US Attorney to the extent of offshoring their work and hiring of LPO service.

In August 2006, the New York City Bar Association ("NYC Bar") directly addressed the issues involved and hot for LPO. The opinion provides an ideal blueprint for LPO best practices. It describes the major ethical considerations applicable to LPO and requires the service buyer attorneys to supervise the work flowing in from offshore legal outsourcing. The "Attorney Type Work" doctrine would, for all purposes, apply to LPO and to the extent of an extension of Attorney’s legal personality.

Other Bar Associations in the US have also expressed their opinion in favor of offshoring work to LPO. On June 19, 2006, the Los Angeles County Bar Association published its opinion and expressed its concerns on the ethical considerations in outsourcing of legal services. Following this, the opinion of San Diego County Bar Association also shows its support for LPO. On January 18, 2008, Florida Bar expressed their position and concern for the ethical considerations of legal outsourcing business.

Indian LPOs are in the nascent stage and slated to grow. The industry is yet to mature. But ethics and the question of attorney-client confidentiality remain an important concern for the industry, if it has to attract that large chunk of work flowing out of U.S. Ethical implications carry an overt meaning when it comes to noble professions, like legal services. The LPO providers have to keep this in mind before deciding on anything.