Summaries courtesy of FreelanceLaw member Carol Mutz, J.D., Lincoln, Nebraska

The Association of The Bar Of The City Of New York Committee on Professional And Judicial Ethics, Formal Opinion 2006-3, August 2006

A lawyer may outsource legal support services overseas to a non-lawyer if the hiring lawyer rigorously supervises the non-lawyer to avoid aiding in the unauthorized practice of law and ensures the competent representation of the client.  Specifically, the lawyer must (1) preserve the client's confidences and secrets; (2) avoid conflicts of interest; (3) bill appropriately; and (4) obtain advance client consent to outsourcing when necessary.

A lawyer may use a research service staffed by non-lawyers if the lawyer exercises proper supervision.  Without proper supervision, the legal research firm would be engaging in the unauthorized practice of law.  The physical separation between a New York lawyer and an overseas non-lawyer requires vigilance and creativity in discharging the duty to supervise. The New York lawyer should consider obtaining background on the intermediary employing the non-lawyer; obtaining the résumé of the non-lawyer; conducting reference checks; interviewing the non-lawyer to ascertain his or her suitability for the particular assignment; and communicating with the non-lawyer during the assignment to ensure that he or she is discharging the assignment according expectations.

If the assignment requires disclosure of client confidences the hiring lawyer should secure the client's informed consent in advance.  The lawyer should also consider that different laws regarding the confidentiality of client information exist overseas.  The employing lawyer should ask an intermediary employment service about its conflict-checking procedures and also ask both the intermediary and the non-lawyer about past or present services provided for any parties adverse to the lawyer's client.

A lawyer is not required to inform the client when outsourcing legal support services overseas to a non-lawyer unless the non-lawyers will play a significant role in the matter, client confidences must be shared with the non-lawyer, the client expects that only personnel employed by the law firm will handle the matter, or non-lawyers are to be billed to the client on a basis other than cost.  In these cases the client's informed advance consent is needed.

Unless the client agrees, the lawyer should charge the client no more than the direct cost associated with outsourcing, plus a reasonable allocation of overhead expenses directly associated with providing that service.

New York Lawyers' Association Committee on Professional Ethics, Opinion 715

An indemnity and hold harmless agreement which provides for a division of fees between a lawyer who refers a matter to another attorney but who agrees to retain joint responsibility for the representation does not violate the prohibition against division of fees.  However, the agreement may not be used to limit the referring lawyer's responsibility to the client.  The referring lawyer may also receive a portion of the fees if he assumes joint responsibility.  This responsibility is financial and does not require the referring attorney to supervise the attorney to whom the matter is referred.  Rather, the referring attorney assumes vicarious liability to the client for the other attorney's performance.