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Those who doubt the emerging trend toward moving United States legal work offshore need look no farther than Zachary Bossenbroek, co-founder of Lexadigm Solutions, a start-up company that outsources legal research to India. Bossenbroek, who graduated from law school in 2002, joined forces with a 2003 American law school graduate and native of India, Puneet Mohey, to launch Grandville, Mich.-based Lexadigm, which opened for business in February. Already, Bossenbroek said he has had to raise billing rates�from $45 an hour to $60 an hour�in an effort to control growth in the face of rapidly escalating demand from both small law practices and businesses. He said he now has 20 paying clients. The fundamentals fueling the anticipated growth of the “off-shoring” of legal work are clear. While entry-level American law school graduates often command salaries of more than $100,000 a year, the going rate for experienced, well-educated lawyers in India is $12,000 to $18,000 a year, including benefits, according to attorneys in the United States who have hired such lawyers for U.S. law projects. As for the geographical distance, Internet and telecommunications technologies render voice and written communications costs between the United States and India negligible. A ‘professional threat’ Offshoring of legal work is only beginning in this country, according to Rees Morrison, senior director at Hildebrandt International. “At this point, a few adventurous law departments,” including General Electric Co. and Cisco Systems Inc., “have their toes in the water,” he said. However, given the sheer economics, he added, “This strikes me as the biggest wave in the last five years in its ability to rework both sides-law firms and law departments” of the legal services industry. The categories of legal work that have been performed offshore by non-U.S. lawyers include legal research; assistance in the drafting of legal memos and briefs; discovery work; assembling facts in support of litigation claims; and patent, trademark and ERISA work. Morrison estimates that some 20% to 25% of U.S. legal work could be moved abroad. He sees the offshoring of legal services as a “professional threat” to both law firm and law department attorneys, particularly at the entry level. “You still want to be paid U.S. rates, but if somebody in India can do what you can do, why should somebody hire you?” Morrison said. But despite widely publicized reports of an impending mass migration of American legal work overseas, “There is no panic in the legal profession,” said Dennis W. Archer, president of the American Bar Association (ABA) and chairman of Detroit-based Dickinson Wright. “I’ve not received as president any letters, any cause for concern,” he said. While the legal profession was in an uproar when it was under threat of losing market share to the accounting industry, when it comes to the threat of losing legal work to India and other low-wage, English-speaking countries, so far there has been barely a whimper. One reason: The legal services at issue, whether being provided by lawyers in the United States or non-U.S. lawyers overseas, remain in the hands of the American legal profession through corporate law departments and lawyers admitted to practice in American jurisdictions. “They’re still under the supervision and control of lawyers,” Archer said. Law firms, he said, have traditionally supported corporate clients in their effort to reduce legal costs. “We enjoy a working relationship with our clients,” he said. “When our clients are hurting, we want to be supportive.” Archer said that sending abroad some legal services is just one way to cut costs. However, Jerome Shestack, a former ABA president and head of the litigation department at Wolf, Block, Schorr and Solis-Cohen of Philadelphia and a former ABA president said, “I’m very wary of the practice in terms of meeting our ethical standards, meeting our qualifications and exploitation.” He pointed to bar admission rules and standards, saying, “To circumvent the rules in that way seems to me to be unprofessional for a lawyer or a law firm. You endanger quality and you evoke possibilities of malpractice.” And hiring overseas personnel to perform legal work at cut rates, he said, raised “ethical questions of whether you’re exploiting people.” Gerard E. Harper, a litigation partner at Paul, Weiss, Rifkind, Wharton & Harrison in New York and chairman of his firm’s committee on professional representation, which deals with ethics issues, said that from a law firm perspective, sending legal work offshore through third-party providers was problematic. He said he had confidentiality concerns about the practice of sending client documents outside his firm without the consent of the client. He also would be leery of possible conflicts in representation, he said, and supervision is an issue as well. Harper said he would consider it unethical to send work to low-cost, third-party providers and then mark up that cost in client billing to generate profits for a law firm without client consent. As for corporate clients outsourcing some of their more mundane, time-consuming legal work that related to a matter on which he was involved, Harper said he would want some clear definition of the scope of his responsibility so that he would only be vouching for the quality of work under his supervision and control. Harper also raised the issue of fee-splitting as a matter of concern with respect to the outsourcing of legal work. He said the legal profession “should be thinking about” some of these issues. But Susan J. Hackett, senior vice president and general counsel of the Association of Corporate Counsel, said, “it’s cheaper to hire lawyers in India than it is here and that’s just pure economics. That has nothing to do with competence and professionalism,” she said, and those who argue otherwise “could be concerned about the protection of their own turf.” Thomas D. Morgan, professor of professional responsibility at George Washington University Law School, said that the lawyers admitted to American jurisdictions and supervising the work�whether it is performed by overseas lawyers or nonlawyers�were ultimately responsible for upholding professional standards, including those relating to confidentiality and client conflicts. “The U.S. lawyers are the ones that are on the hook for the quality of the work done,” Morgan said. As for specific professional guidelines for supervision, he said, “There are no formal standards.” However, “you can imagine an extreme situation in which these folks are kind of randomly assigning work to Indian lawyers” that could theoretically give rise to a disciplinary problem for the American lawyer. While Hackett said there is no professional obligation for lawyers to disclose to clients that some of their legal work was being sent abroad, she said there is a “relationship obligation” to bring such arrangements to the attention of clients. Morgan agreed and noted that failure to disclose could give rise to a rather uncomfortable situation: “Maybe the client will throw in an observation that he wasn’t informed when he files a lawsuit for malpractice.” Malpractice concerns As for any nexus between offshore legal work and malpractice, Morgan was skeptical. “My guess is that these are people who have been trained in a common law system and are going to be asked to do things that are fairly routine, or, if it is sufficiently focused, that they’ll become pretty good at it.” However, Lish Whitson, of Stokes Lawrence in Seattle and chair of a recent ABA task force on a model definition of the practice of law, sees a risk for the lawyer in the United States who is ultimately responsible for legal work performed overseas. “If, for example, they came up with some cockamamie lease scheme that an Indian lawyer said should work in the state of Maine, there might be some potential liability for the United States lawyer signing off on that work.” One restriction that could become relevant, Morgan said, is the limitation on multidisciplinary practice and restrictions on fee splitting between lawyers and nonlawyers. That could be an obstacle for U.S. lawyers wishing to establish partnerships with offshore providers of legal services. Yet the application of unauthorized practice of law or multijurisdictional practice prohibitions to those providing off-shore legal work is a stretch in the view of some legal experts. First, despite efforts by the ABA and state and local bar organizations, the definition of the practice of law has proven extremely elusive. Short of appearing in legal proceedings or representing oneself to be a lawyer, much of the everyday work of attorneys can be performed by consultants, paralegals, law students or interns without violation of the restrictions on the unauthorized practice of law. Because the offshore legal work is at the behest of lawyers admitted in U.S. jurisdictions, who are in turn providing the work to clients, there appears to be no unauthorized practice of law. As for the multijurisdictional question, according to Morgan, when it comes to those providing legal services outside of the United States, “It seems to me that the way they’re going to characterize this as these are essentially paralegals. To the extent that you’re treating them as non-lawyers, it isn’t a multijurisdictional practice issue because their story is that they’re not practicing law.” Companies that are providing legal services offshore to law firms and law departments are careful to avoid any appearance that their overseas lawyers are practicing U.S. law. For example, Ganesh Natarajan, CEO of Chicago-based Mindcrest Inc., said that while the lawyers he employs in Bombay, India, perform many tasks ordinarily performed by lawyers in the United States, including legal research, helping to draft motions and briefs, and filling out forms relating to compliance issues and administrative processes, “We will not give any legal advice.” Natarajan, who was a partner in the Chicago office of Richmond, Va.-based McGuireWoods before launching his business, said his company, whose clients include seven Fortune 500 companies, provides an alternative to “using a law firm for low-value work.” Echoing a concern of many law firms, Natarajan said that finding strong writing ability is the biggest challenge in hiring legal staff for his Bombay office. “Everyone we hire, we give a copy of The Old Man and the Sea,” he said, which provides an example of “short sentences” and “good narrative.” At Lexadigm, Bossenbroek said he and his partner have had no problem finding talented lawyers to work in their 1,000-square-foot, Westlaw-equipped office near New Delhi. The company’s lawyers are admitted to practice in India and include one with an LL.M. from the University of Pennsylvania and two others who trained for a year with an American lawyer in India. Bossenbroek said his employees are bound by confidentiality agreements and they check for conflicts before taking on work. The company also has a disclaimer stating it is not involved in the practice of law, not forming attorney-client relationships and its work is solely for review by the lawyers using Lexadigm.

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