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Former chief CT ethics regulator is gravely misinformed about legal outsourcing – UPDATED

legal outsourcing ConnecticutIn an article in the July 27 Connecticut Law Tribune, Mark Dubois, Connecticut’s former chief disciplinary counsel, reveals a troubling misunderstanding of the national consensus concerning the ethics of legal outsourcing. Dubois—who, according to his firm’s website, “is recognized as an authority on lawyer discipline matters and the unauthorized practice of law”—was Connecticut’s chief disciplinary counsel until some time this spring. (This article describes him as the chief disciplinary counsel; this one describes him as the former chief; and his firm’s website doesn’t specify exactly when he joined the firm.)

If the title of Dubois’ article (Outsourcing Trend Gains Momentum, Raises Questions) wasn’t enough of a tip-off, the very first sentence—in which Dubois describes outsourcing and offshoring as “nefarious processes”—reveals Dubois’ deep-seated animosity towards outsourcing. If this animus was presented as personal opinion, I would have no problem with it. Unfortunately, it’s communicated in a more insidious manner: through misinformation disguised as fact.

Dubois inaccurately claims that the issue of whether hiring attorneys can make a profit on work performed by freelance attorneys or LPO companies is unsettled

Most egregious is Dubois’ claim that he has “seen informal opinions both ways from [his] former colleagues in bar regulation as to whether outsourced work can be ‘upcharged’ or must be passed along on a dollar-for-dollar basis.” Unless Mr. Dubois is privy to a trove of unreleased ethics opinions, this is simply inaccurate.

As I’ve previously explained, in ABA Op. 08-451, Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services, the ABA’s Standing Committee on Ethics and Professional Responsibility explained that

…the fees charged by the outsourcing lawyer must be reasonable and otherwise comply with the requirements of Rule 1.5. In Formal Opinion No. 00-420, we concluded that a law firm that engaged a contract lawyer could add a surcharge to the cost paid by the billing lawyer provided the total charge represented a reasonable fee for the services provided to the client. This is not substantively different from the manner in which a conventional firm bills for the services of its lawyers. The firm pays a lawyer a salary, provides him with employment benefits, incurs office space and other overhead costs to support him, and also earns a profit from his services; the client generally is not informed of the details of the financial relationship between the law firm and the lawyer. Likewise, the lawyer is not obligated to inform the client how much the firm is paying a contract lawyer; the restraint is the overarching requirement that the fee charged for the services not be unreasonable.

In its November 2010 Draft Report on outsourcing, the ABA 20/20 Commission did not recommend any changes to either the Model Rules or their comments with respect to the issue of billing for outsourced services. Indeed, the Draft Report explicitly stated that the “extensive commentary” accompanying “Model Rule 1.5 (“Fees”) and the wealth of ethics opinions available treating myriad specific questions relating to the reasonableness of fees for both legal and non-legal services” “reveals that no special language needs to be added to [Model Rule 1.5] to remind lawyers . . . that [the Rule is] applicable to outsourcing practices.” Thus, the discussion of fees in Op. 08-451 remains applicable.

Additionally, my extensive research reveals that Op. 08-451 is consistent on this issue with all other ethics opinions that have addressed the question, save Texas. Thus, contrary to Mr. Dubois’ contention, it is well-settled that it’s perfectly ethical for outsourcing attorneys to earn a profit on services provided by freelance lawyers or LPO companies.

Dubois inaccurately contends that other issues implicated by outsourcing remain unsettled

Dubois’ contention that “[t]he ABA Ethics 2020 Committee is wrestling with” issues such as protecting client confidences, avoiding conflicts of interest and disclosing the use of outsourcing to clients is also (albeit slightly) inaccurate. Last month, after more than a year of work, the Ethics 20/20 Commission released its initial proposal concerning changes to the Model Rules of Professional Conduct (or, more accurately, the comments to the Model Rules) as they relate to domestic and international outsourcing. Although the Commission seeks comments in response to its initial proposal before submitting a final version of its proposal to the House of Delegates in May 2012, it’s noteworthy that the initial proposal differed very little from the “draft proposal” that the Commission released in November 2010. Moreover, both proposals are consistent with ABA Op. 08-451.

Of further note, Dubois’ prose veritably drips with disdain. He refers to Pangea3, a leader in overseas outsourcing that Thomson Reuters purchased late last year for $35-$40 million as “something called Pangea3,” and describes it as “a domestic portal where U.S. firms can manage legal process outsourcing to India,” despite the widely-reported opening of a Pangea3 office in Dallas that (among other things) handles work that cannot be sent abroad. His assertion that “[a]nywhere that you can find English-speaking folks with access to electricity, you can set up a back office and practice law” paints countries like India as barely-civilized backwaters.

I’ve written to Mr. Dubois and invited him to share with me any ethics opinions that support his position that the issue of whether hiring attorneys can make a profit on work performed by freelance attorneys or LPO companies is unsettled. I also provided him with a complete list of the ethics opinions I uncovered in the research mentioned above. I’ll post an update if he provides me with any additional information.

I’m not surprised to see this coming out of Connecticut: after all, it’s the same state in which, earlier this year, a state legislator introduced a bill designed to prevent companies from offshoring the drafting, reviewing or analyzing of legal documents to unlicensed workers overseas.

UPDATE

Here is Mr. Dubois’ response to my inquiry concerning the basis for his position that the issue of whether hiring attorneys can make a profit on work performed by freelance attorneys or LPO companies is unsettled:

This was from an exchange on the National Organization of Bar Counsel list serv some time ago wherein opinions both ways were offered.

I followed up, asking:

Can you share that exchange with me (or with the public in general)? If not, as compared to the many opinions I’ve listed, the exchange is far from precedential.

His response:

I have left my prosecurtorial job so I do not have access to the threads archived on the list serv. As to whether the informal opinions of my former colleagues are “precedential”, nothing you sent me is precedent. At best, it is persuasive, but certainly not binding unless adopted by a court.

I’m troubled by Dubois’ response, for two reasons. First, it reveals that the statements in his article are based, not on publicly-available ethics opinions, but on an informal exchange between bar regulators. Second, he doesn’t specify when the exchange occurred, other than to describe it as “some time ago.” Hardly a reasonable basis for an article intended to provide ethics guidance to Connecticut attorneys.

I’ve brought the inaccuracy of Mr. Dubois’ article to the Connecticut Law Tribune’s attention. We’ll see whether they have the cajones to contradict Mr. Dubois in print and correct the record for the benefit of Connecticut lawyers.

Update 7/2/16: The article that is the subject of this post is no longer available on the Connecticut Law Tribune website.

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