Preventive Measures When Outsourcing Legal Services

October 1, 2021

In a competitive world where clients are increasingly demanding, some law firms see outsourcing as a way to provide clients with legal services at a lower cost. It also allows lawyers to lighten their workload and focus on value-added tasks for clients. But beware: outsourcing is not without its risks!

Many lawyers do not realize that they may be held professionally liable for mistakes made by the outside law firm or legal services company in the performance of their mandate. Delegating something does not mean no longer thinking about it. Entrusting a mandate to an outside law firm or legal services company does not relieve you of your obligation to act competently and diligently towards your clients.

This article presents some preventive measures related to the outsourcing of legal services.

What is Legal Services Outsourcing?

First, it is important to define outsourcing.

In essence, it entails transferring the performance of a specific task or function, previously performed internally, to an external service provider, for reasons of efficiency and cost.[1]

Outsourcing falls into two categories: outsourcing of administrative tasks and outsourcing of legal services.

There are many examples of outsourcing of administrative tasks, such as: outsourcing payroll and accounting, using courier or photocopying services, and hiring an IT firm to maintain and repair your computer system.

With respect to the outsourcing of legal services, this can occur in several situations: retaining the services of a contract lawyer to help you with an overload of work, hiring a foreign lawyer to help you with part of a mandate abroad, obtaining paralegal services when there is no full-time paralegal in your firm.

As mentioned above, however, we will limit ourselves to discussing preventive measures related to the outsourcing of legal services.

Preventive Measures

• To the extent possible, let the client retain the outside lawyer or legal services company: All lawyers want to offer a quality turnkey service to their clients. For example, it may be tempting to offer to find the foreign lawyer who will handle the portion of the file outside Québec and even confirm the management of the entire file, including the foreign portion.

However, in doing so, you remain liable to your client for the actions of the outside lawyer. Therefore, resist the temptation and let the client retain that lawyer. By doing so, you will reduce the risk of being sued if the latter commits a fault.

If, however, you do not follow this preventive measure:

• Obtain your client’s written consent before delegating any part of the mandate to an outside party;

• Confirm in writing the scope of the mandate given to the outside law firm or legal services company;

• Also confirm in writing the scope and limits of your own mandate. For example, in a case involving the interpretation of the law of a foreign country, specify in the engagement letter that your advice and opinions are limited to Québec law only;

• Visit the offices of the outside law firm or legal services company before you give them any mandates;

• Similarly, investigate the law firm or legal services company. Get recommendations from lawyers who have already worked with this firm or company;

• Develop a relationship of trust by trying to establish a recurring working relationship with the same legal assistant, paralegal or lawyer. This will allow you to more accurately determine the strengths and weaknesses of those you are working with. Moreover, they will have a better understanding of your expectations in terms of the quality of the work done;

• Verify that the lawyer or support staff responsible for performing the mandate has:

- the competence,

- the skills, and

- the time needed

       to complete the mandate;

• Verify that there are no conflicts of interest that would prevent the outside law firm or legal services company from performing the mandate;

• Verify that the procedures, processes and software of the outside law firm or legal services company are adequate to ensure the confidentiality of the information transmitted and the respect of professional secrecy;

• Lastly, obtain proof of adequate professional liability insurance when retaining a lawyer from another jurisdiction.

Outsourcing legal services has mutual benefits for lawyers and their clients. That said, despite the growing popularity of outsourcing, it is important to remain vigilant and to put into place preventive measures to limit the risk of malpractice claims resulting from shortcomings in the delegation process. Remember that in your client’s eyes, you are the one and only person responsible for the file!

References: 

Arthur Greene, Outsourcing: Is it Right for Your Small Firm?, in CBA PracticeLink, June 24, 2014, online: https://www.cba.org/Publications-Resources/CBA-Practice-Link/solo/2014/Outsourcing-Is-it-Right-for-Your-Small-Firm?lang=en-ca.

Jeremy Hainsworth, “Legal process outsourcing requires precautions” in The Lawyers Weekly, September 28, 2012, online: Legal process outsourcing requires precautions.pdf

William E. Gericke and Thomas G Wilkinson, “Ethical Implications When Outsourcing Legal Work” in Law Practice Today, November 13, 2020, online: https://www.lawpracticetoday.org/article/ethical-implications-when-outsourcing-legal-work/.

[1] William E. Gericke and Thomas G. Wilkinson, “Ethical Implications When Outsourcing Legal Work” in Law Practice Today, November 13, 2020, online: https://www.lawpracticetoday.org/article/ethical-implications-when-outsourcing-legal-work/?utm_source=Nov20&utm_medium=email&utm_campaign=Nov20LPTemail.