ABA Outsourcing Opinion

What it means to You as a Litigation Support Professional

Law firms have long relied on vendors, especially in litigation matters, to help them scale beyond their in-house capacities.  Outside companies have offered document photocopying and digital imaging services for decades, and law firms routinely outsource projects like bibliographic coding, audiotape transcription, and trial exhibit creation.  Not least of all, law firms have long hired contract attorneys to help with time-sensitive projects and large document reviews.  None of this is novel or controversial.

Over the past few years, however, a number of vendors have moved beyond the idea of contract attorneys to offer entire outsourced document review teams.  Arguing that first-level and even sophisticated subject-matter analysis can be handled much less expensively when farmed out to specialized service providers, outsourced review vendors have set up review centers both in the United States and internationally.  Though clients have been attracted to the cost savings of outsourced review, attorneys had initially raised questions about whether these document review services cross over into the gray zone of unauthorized practice of law.  Many of these concerns were laid to rest on August 5, 2008, when the American Bar Association (“ABA”) released its formal opinion 08-451 (“Opinion”) regarding outsourcing legal and ancillary services. 

Though the ABA’s opinion was driven by the need to clarify the role of third party document review services, the language of the opinion is much broader, serving as a yardstick to measure any outsourced service provided to a legal team.  Joining a number of state and local bar associations that have also issued guidance on this topic, the ABA generally approved the use of outsourced services to support a core legal team (“The outsourcing trend is a salutary one for our globalized economy,” Opinion 08-451 at 2.).  However, the Opinion also makes it clear that a legal team that elects to outsource work still retains full responsibility for the quality of the work, just as if the work had been performed directly by members of the legal team. 

If ABA Opinion 08-451 covers lawyer ethical obligations, what impact, if any, does the Opinion have on litigation support professionals?  More than you might think.

  1. No More “Vendor Ate My Project” Excuses

One of the big advantages to outsourcing certain projects is that the vendor or consultant who takes on the job essentially guarantees that the work will get performed correctly—or at least to a higher standard than the client might be able to perform.  That’s one reason why some outsourced work, particularly harvesting electronically stored information (“ESI”) in a forensically sound manner, can actually be more expensive than performing the work in-house; the vendor can face significant legal and financial liability if the work isn’t performed to specifications.

In the past, legal teams have used the argument that work was outsourced to defend themselves against allegations that the results contain material errors or were otherwise unacceptable.  After all, as long as the legal team used some due diligence in selecting a vendor, they acted reasonably and should not be penalized for the errors of a third party that had held itself out as expert in the field.  And indeed, this argument has worked many times in the past. 

Under ABA Opinion 08-451, blaming errors and other mistakes on vendors may be a much less effective strategy.  The Opinion explicitly states that the attorney of record bears responsibility for the results of the legal team, including the work product of outsourcing partners.  Thus, if an outsourced document review or bibliographic coding project results in inadvertent disclosure of privileged communications to an opponent, it’s the lead attorney, not the third party vendor, who faces the wrath of the court.  It may still be possible to shift some liability, as the Opinion suggests that a legal team’s due diligence during the vendor selection process may be sufficient to demonstrate that it acted responsibly.  And, of course, the Opinion doesn’t speak to possible breach of contract claims a law firm or its client may have against a vendor.  However, the Opinion makes it clear that blaming performance issues entirely on a vendor is no longer a winning defense inside a litigation matter.

  2. Increased Need To Keep Project Management Records

ABA Opinion 08-451 imposes an explicit obligation for lawyers to “oversee the execution of the [outsourced] project adequately and appropriately.” Opinion 08-451 at 3.  Typically, though, it’s the litigation support professionals, not attorneys, who serve as the primary interface between a legal team and outside vendors.  That’s not inconsistent with the ABA Opinion, as lit support folks work under the implicit (if not explicit) supervision of the attorneys in a law firm.  However, because of the Opinion’s emphasis on supervision as a mandatory attorney duty, the daily vendor liaison is likely to be the focus of particular attention.

Given the frequency with which litigation support and document review projects encounter problems along the road to completion, litigation support professionals serving as vendor liaisons have always tried to keep records regarding a project’s status.  This has always been a good project management practice, but in light of Opinion 08-451, it’s now become an essential task for legal defensibility, too.  Following the logic of the Opinion, the burden on law firms has shifted from demonstrating that they outsourced a project (and its liability) to demonstrating the reasonableness of their oversight of an outsourced project.  E-mail messages, status reports, and other communications between the vendor and law firm, which have always been retained in case of contract performance issues, now may serve a second purpose as evidence of a law firm’s competence in managing an outsourced project.

For litigation support professionals, the Opinion increases the need to keep detailed records about outsourced work—something that tends to slide to the bottom of the priority pile in the face of a typically-overbooked schedule.  Now, however, the time required to log e-mail and prepare updates for the legal team must be built into the overall project time estimate.  In addition, a vendor liaison should also get into the habit of jotting down a quick summary after each vendor phone call, as no other record of the topic of conversation will likely exist.  Formal memoranda to the case file are probably unnecessarily time-consuming in most situations; a quick e-mail message to a supervising attorney (or even to other paraprofessionals assisting with front-line project management) will generally suffice.

  3. Increased Attention From Lawyers And Vendors

Because of the wide publicity that the Opinion has received in the legal community, outsourcing has become a much more popular topic of conversation for both lawyers and their clients.  The potential for significant cost savings over traditional methods has prompted clients to ask lead counsel whether outsourced discovery document review may be appropriate for their cases.  Litigation support professionals should be prepared to offer both a financial and logistical analysis of the costs and benefits of outsourcing work. 

Many clients (and attorneys) might ask to hear the financial analysis presented in terms of the review (or other processing) cost per document, but this analysis is not as simple as it sounds.  “Average” or “historical” document review rates may or may not reflect the actual speed with which documents can be reviewed for a given project.  In addition, for document review projects, initial review is only the first step of the overall process.  Quality control procedures are a crucial part of any litigation support project, whether it’s been outsourced or performed in-house, and there’s often a direct relationship between the speed of the initial analysis and the number of errors that must be corrected in QC. 

A logistical analysis must include a suggested process and time estimate for managing the project, including time spent documenting progress and resolving exceptions.  For outsourced coding, review, or other analytical projects, the logistical analysis should also specify legal team members who would hold responsibility for answering substantive analytical questions, as well as the hours when they might need to be available.  In addition, for projects being sent offshore, the analysis should answer whether the legal team should consider sending a member of the team to the remote location.  Immediate feedback at the start of a remote project can greatly reduce the length of a vendor’s learning curve and can fix analytical mistakes before they taint a large portion of the review.

Vendors, too, are increasingly reaching out to market outsourced services, especially large-scale document review.  Many vendors have begun trying to contact attorneys directly because they believe lawyers are more likely than litigation support professionals to have the power to make binding outsourcing decisions.  Law firm litigation support professionals will need to keep in close contact with the legal teams they support to ensure that they have an active role in any vendor selection process. 

It shouldn’t be hard to make a strong argument for inclusion.  Because of their extensive experience requesting pricing from a broad range of vendors and outsourced services, litigation support professionals are well-equipped to take the lead in requesting vendor information about their quality control, quality assurance, scalability, and other important work flow procedures.  Many (but not all) attorneys lack the hands-on technical experience to differentiate between salesman puffery and actual operational details, and it is exactly this type of due diligence that Opinion 08-451 expects legal teams to conduct. Finally, to the extent that a vendor has been in contact with both attorneys and the litigation support group, litigation support professionals may be in a better position to check that the vendor is being consistent and that one group is not being played against the other.

Conclusion

ABA Opinion 08-451’s endorsement of outsourcing paraprofessional and even selected legal services places additional pressure on law firms to become familiar with these types of vendor services and how they can be integrated into a firm’s own work.  Litigation support professionals should be prepared to work closely with legal teams to help them understand the true costs of performing work.  Working together, representatives of these two disciplines will be well-equipped to build a sensible, defensible approach that satisfies clients and judges alike.

About the Author:

Conrad Jacoby is the founder of efficientEDD, a consultancy specializing in electronic discovery and litigation information management issues.  A seasoned litigator as well as a technology consultant, Mr. Jacoby writes and lectures extensively on electronic discovery issues.  He is a long-standing member of the Sedona Conference Working Group on Electronic Document Retention and Production and also Co-Chairs the District of Columbia Bar’s Law Practice Management Section. Mr. Jacoby received his undergraduate degree, magna cum laude, from Yale University and received his law degree, cum laude, from the Georgetown University Law Center.