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The Ethics of Outsourcing

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The Ethics of Outsourcing

This presentation will cover what you need to know about outsourcing, how to use it, and how to avoid malpractice traps.We also cover other services regularly outsourced by firms, as well as the financial benefits of outsourcing, so that attorneys can stay focused on their cases. By attending this presentation, you'll learn how the ABAand State Bar Associations have applied ethical rules in the context of outsourcing legal services and support.

Presenters

Melissa Khalil
Director
Nora.legal/ Law Company
Patrice Asimakis
Director of Legal Services
LegalEase Solutions and Law Company

Transcript

- Hi everybody, thank you for joining us today. My name's Melissa Khalil and I'm a licensed attorney in Michigan. I have been working with Nora.Legal for a couple years, I mainly work with our solo and small firm attorney clients and manage outsourcing their legal research and writing projects. Today, I'm joined by Patrice Asimakis, who also works with Nora.Legal and with our sister company, LegalEase Solutions. Patrice, would you like to say hello and introduce yourself?

- Hi Melissa, yes, thank you. My name is Patrice Asimakis, I am the director of legal services for LegalEase Solutions. I am also a licensed attorney and I serve corporate legal departments and law firms by crafting innovative solutions involving legal research, legal operations, contract management, compliance, litigation services, and legal analytics. And I support my clients with a virtual team consisting of best-of-breed technology partners and custom hybrid solutions, which involve leveraging technology and people to increase efficiency and reduce costs.

- Thanks, Patrice, what we are going to talk about today, are the practicalities and the ethics of law firms outsourcing their legal work. We are going to focus, in particular, in the beginning, on the regularity with which outsourcing is happening. Kind of a who's doing it and why? Then we will jump into the malpractice issues, which everyone should be aware of. They really don't pose much of a problem, they're more of a set of things to know and a set of things to do. The main issues, cover consent, confidentiality, conflicts, review and billing. Finally, we will talk about how to decide between the different outsourcing options that you have and we'll give you some resources to help guide you along the way. Our two primary sources today are first for the practical information, Thomson Reuters did a really fantastic study last year on what they call alternative legal service providers. Thanks to "Forbes", these alternative legal service providers are now being known as law companies. I will be referring to them as law companies for the duration of this CLE, as that's certainly a lot shorter and easier to say. For the ethics and malpractice concerns, we will be focusing a lot on the American Bar Association, it has issued a couple different rulings and many state bar associations have also issued rulings on the subject. They are very similar, it's mostly a lot of overlap, but we'll call out a couple differences. A little background here, what are law companies? To put it simply, they are companies who law firms and attorneys are outsourcing to. Law companies are not your traditional legal service provider, they, typically, are not a law firm or an in-house legal department. Instead, they provide legal services and legal-related services on an outsourced basis. Law firms and attorneys are able to be more efficient and lower costs by leveraging a law company to take on time consuming tasks. We will talk through the data and that should give you a very good idea of when you might want to use the law company, how to use one, and what's involved. So, what is outsourcing? In general, outsourcing is done anytime you contract outwork to a professional. We all do it in some way in our business, or personal lives, from hiring cleaning assistance to hiring a web developer, even a babysitter is considered an outsourced professional. We find people who are professionals in areas we are unfamiliar with or when we lack the time to dedicate it to the job. In the legal arena, this is no different. We have all, at some point, referred cases out or brought on co-counsel. So when might you outsource your legal project? Think about that family vacation that's been planned forever to celebrate your son's graduation, but you have a huge trial coming up. You might choose to ruin the family vacation and bring the work with you or even scramble to hire a new associate, neither option sounds great, this is the perfect opportunity to outsource to a professional. When you don't have the network, the staff, or the funds to bring on outside council, or even the ability to hire another associate in a pinch, then outsourcing can be done with a law company. So, when you're contracting out legal work, you get access to specific areas of expertise. It's time saving, it's cost effective, and it's easy to use and flexible. Let's start talking about what is actually outsourced by law firms to law companies. And Patrice, do you want to step in here?

- Sure, Melissa, thank you. The easy answer is anything and everything. If you have legal work that is an overflow and it's something that you either can't handle or don't want to, you can outsource it. Any type of legal research and writing is ripe for outsourcing by law firms. And a very popular service is brief and memo drafting. For corporate legal departments, we see legal research and writing as well, but we also see contract lifecycle management, contract review, compliance, and case management services are quite popular. Any kind of litigation support is perfect for outsourcing, transactional is also popular. Drafting agreements and due diligence on deals can be outsourced. Something that is very often sought after is high volume work like bulk discovery, something that is repetitive and takes a great deal of time, but can be done by a junior associate, that's perfect for outsourcing. We also see work like summarizing depositions and medical records, preparing pleadings, and interestingly, in the technology sphere, law companies are often more tuned into tech tools than lawyers are, so they can be both a consultant and also use the technology on your behalf. The technology out there is, of course, the discovery and contract lifecycle management, but also document automation and deal rooms. So, law companies can both consult, as I mentioned, and also use the technology on your behalf, and they often have relationships with technology partners across the globe.

- Thanks, Patrice, with our company, what would you say are the most popular projects that we see outsourced?

- Yeah, sure, definitely. On the law firm side of things, research memos and briefs are by far outsourced more often than anything else. Of course, doc review, appellate briefs, contract extraction and analysis, eDiscovery support. And then also, on the corporate law department side of things, compliance is very popular and case management as well.

- Okay, so then who is outsourcing? You'll see here that the 2016 numbers are showing the use of legal outsourcing by law firms and US corporations. Prior to that, back in the early 2000s, it was very, very low, a large reason for that was the uncertainty in ethics and malpractice. By 2016, it was half of law firms and more than half of corporate law departments. You can see this chart shows that larger firms have a higher use of outsourcing, it's kind of like any other industry where the largest businesses figure out those efficiencies first and now smaller firms are kind of joining in the mix. Outsourcing has grown and you'll see that as of 2020, it's about 80% of law firms and in just over 70% for in-house corporations. What is the reason why most firms are outsourcing? So, the number one reason you can see for both law firms and in-house council is access to specialized expertise. It's a different way of reaching out to co-counsel, rather than bringing on a law firm or hiring another associate, one of the great things about going to a law company is that because they're so large, they have so many people in their network, you can get access to all sorts of areas of law. So, for example, you're a business lawyer, and now all of a sudden you need to get into estate planning or you're in litigation, but you've never litigated a whistleblower claim or employment claim, you can go to a law company and outsource to that specialization. Of course, you could go to Am.Jur. and start finding legal articles on the subjects, you might even find five or six, there might be a bunch of overlap, together they'll give you the information you need, but none of them really give you everything and they certainly don't speak to your specific issue. It would be much more efficient to go to a law company and ask them to write you a research memo on the specific subject to the advice you will be providing to your client. They can even ghost write the information that you'll be sending to your client, you will review the work, which is directly relevant to your specific issue, and then you can send it off. It's a great way for you to slowly expand these areas of expertise. The next reason given for outsourcing is offering clients options to control costs, which is much more expected. And the same with increasing profits and increasing competitiveness. Meeting peak demands without hiring is another big driver. The idea here is, all of a sudden you have more clients than you normally do, it's not going to last forever, but it's going to last a little while, you can't really hire because it wouldn't make sense to hire a bunch of new staff. But this is where outsourcing to a law company makes a lot of sense, because you're able to grow your bandwidth very, very quickly by expanding the size of your team and it doesn't mean you have to stay there, but you certainly can stay at that level or you can shrink back down when needed. So, those are kind of the primary reasons that have been reported. Anyhow, we're going to focus more on the obvious reasons, efficiencies and profits, a little more in detail next. But first, Patrice's going to talk a little bit about the pros of outsourcing.

- Thanks, Melissa, sure. So, probably the first pro in outsourcing is its cost effectiveness, there's no need for hiring additional staff and you don't have to worry about the overhead that comes with it, you pay for what you need as you need it, you can get great prices on bulk work. Regarding expertise, as you mentioned previously, Melissa, there are a large pool of attorneys with varying areas of expertise existing in the world of law companies, so you can tap into that. Next, it's a time saver, you can spend your time and focus on your core operations when you are outsourcing those more time-consuming, repetitive tasks. Next, you have access to the newest technology, as mentioned. Law companies deal with many attorneys and are exposed to many different technologies, so they tend to know what works. And last, you will find a better work life balance because you can focus on the things that you need to and outsource the things that you don't really need to.

- And the cons of outsourcing, if we have any cons.

- Sure, yeah, it depends on how you look at it, of course. You know, some lawyers feel like they have less control with any remote working situation, there is a lesser degree of control and oversight, but there are amazing tools out there to keep you in the loop. So, some people might consider the control a con of outsourcing. Security and confidentiality, we can go into more detail about this later, but basically, there are some questions you should ask a law company to be sure you do your due diligence on this topic. Upfront instructions and planning, this helps the overall process and as your team gets to know you, then this step is much easier, and oftentimes, it's actually eliminated, it's not a con any longer. But sometimes, in the beginning, this could be considered a con. And then hidden costs, again, it's going to depend on the company and depend on their pricing structure. So, it's important for you to, you know, vet your company, but there can be sign up fees and fees to upgrade to more features, so be sure to find a law company that is upfront and transparent with its pricing.

- Thanks, Patrice, increasing profits with legal outsourcing. This is a great visual for you, legal outsourcing is just like outsourcing in any other industry, but law firms came into it a lot later because everyone was concerned about the ethical issues, which as you will see are not that much of an issue now. Here, we give an example of a project that isn't outsourced, you do it the way you would normally bill it. Let's say you have a $2,500 fee project that takes you 10 hours. Now, you're going to use eight of those hours to have your paralegal work on it and the internal cost to you might be $75 an hour, then you're going to work on it for a couple hours, so maybe the internal cost to you is a few hundred dollars in order to get that project completed. Now, I understand some of you may be thinking, "I'm on contingency, so I'm not billing a flat fee," but the model still holds true. At the end of the day, there's a certain cost to you of paying your staff and covering your time, and the remainder will be profit. Now, in this example, it's about a $1,300 profit. This second example shows how you can benefit from using outsourcing. Rather than paying your paralegals $75 an hour, and by that I don't just mean their salary, but also their benefits, employment tax and so forth. You can go to one of the many different law companies like Nora.Legal, and they may be able to offer you a low price subscription model for as low as around $20 an hour. During which a licensed lawyer, probably not in your jurisdiction and often in a foreign country like India or Malaysia, but a licensed lawyer, nonetheless, who has studied US law, will work on your project. Like I said, law companies may be able to provide that service for as low as $20 an hour, if you're assigning that work to a lawyer, who is able to work for $20 an hour, you can get 10 hours of time for $200. You still then have plenty of money left to work with, to have your paralegal spend four to five hours of time, if you wanted, and for you, even, to have another hour of time for review. So, by that time, you should have a very good, published deliverable ready to go, and your internal costs have been substantially reduced. So, that cost savings to you might be 30% and you're increasing your profit margin substantially. We'll talk a little bit more about the ways that you can bill later. There's a lot of flexibility, but the short version of it is that just like outsourcing in any other industry, you are identifying ways to reduce your costs while you're still maintaining quality by outsourcing to the right people. And then because the cost is lower, you still will have time for your staff and yourself to review the work. This is why the number of law firms using outsourcing has increased so substantially. So now you can see what other attorneys have started outsourcing and how it has grown a lot in the last few years. Moving on here, Patrice, do you want to talk a little bit about the future for outsourcing, before we get into the malpractice issues?

- Sure, Melissa, thanks. I think we are all seeing that clients are expecting more for less, and so cost is becoming a driver. The future is including automation and artificial intelligence, I attend several trade shows throughout the year and we interact with tech vendors, corporate legal departments, law firms, and we are plugged into the latest buzz. And AI is here, it's being used, it's here to stay, it's not going to replace lawyers, but the artificial intelligence plus human intelligence equals legal intelligence. And so, that hybrid service is becoming it. Law companies that can outsource your legal support staff and your work are growing by leaps and bounds, eDiscovery and also contract lifecycle management. It seems that eDiscovery is here to stay, it's been around for a long time, it's ubiquitous. There are, you know, over 200 eDiscovery companies right now. And contract lifecycle management seems to be more popular in the corporate realm and eDiscovery more in the law firm area. But change management is also something that lawyers are struggling with and outsourcing can help you to provide a roadmap for your change management goals. And then legal tech partnerships are part of that roadmap and strategy for the future. So, the future of outsourcing involves many different aspects. Technology is definitely one of them, but just like when outsourcing was born, efficiency and cost reduction, that's what's driving this.

- Thanks Patrice, so the thing we're here to talk about today, for the most part, is how to make, if you haven't outsourced yet, how you can and how you can protect yourself. The topics we are going to hit today are consent, confidentiality, conflicts, review and billing. So, starting with consent, Patrice, if you want to jump in from here?

- Sure, thanks, okay. Ethics, we all learned ethics in law school, we were tested on it and we know what our responsibilities are every day with respect to protecting our relationship with our clients. So, Rule 1.6.a. says, "A lawyer shown that reveal information unless the client gives informed consent and the disclosure is impliedly authorized." And Rule 1.4.a.2. says, "A lawyer shall reasonably consult with a client about the means by which the client's objectives are to be accomplished." Let's get into the Model Rules now, all states have adopted the ABA Model Rules in most respects. I would advise you to always check your local jurisdiction because there are a handful of state and local bar associations with issued opinions on topic. Some that are published are Ohio, New York, the district of Columbia, North Carolina, Florida, San Diego, and LA. So, it's important to check because we are giving an overview here, but there may be specific opinions that you need to check in your local jurisdiction. So, we know that you cannot disclose your client's information without consent. Most clients will understand the financial benefit of what we're about to talk about as we've seen a few slides ago, in the profit chart. So when you pitch this idea to your client, the easiest time to do it is in your engagement letter. Include an authorization there, make sure it's broad enough in scope to cover any law company services, and the simple way to do this is to indicate in your engagement letter that you may assign or allocate work among paralegals, legal assistants, or paraprofessionals, that's the word that you want to use is paraprofessionals, to gain efficiencies. This consulting arrangement usually is a very positive conversation, your clients will understand the value proposition here. In fact, in most cases, I have found that a sophisticated client will actually expect outsourcing at some point, you know, they know that you're trying to cut their costs or you should be, so it should be a comfortable conversation. So, just to recap, the ABA opinions says that in a typical outsourcing relationship, "No information protected by Rule 1.6 may be revealed without the client's informed consent," and informed consent can be easily established in the engagement letter.

- Great, so now we'll move on to confidentiality.

- Yeah, this is actually the most fun for me to talk about because at Nora.Legal and LegalEase Solutions, we've experimented with a number of bespoke solutions for our clients, so I have some great examples to share. Okay, Rule 1.6.a, that comment says, "A lawyer must act competently to safeguard information against inadvertent or unauthorized disclosure." So, we understand confidentiality is one of the most important things that a lawyer needs to be mindful of. What do you do to protect your client's confidential information when outsourcing? Well, clearly a confidentiality agreement, that's the easiest way to do it, right? Most law companies will include confidentiality terms, right in their terms and conditions, on their website. Others might have a formal agreement, either way is fine. Just make sure it's one way or the other. For our services, we have two models, we have something that we call project-based work and something that is called subscription-based work. For our project-based work, we'll rely on our terms and conditions on our website and for the subscription clients, we have the terms in both places. So again, it will vary from company to company, but in any event, make sure it's there. So, the ABA actually did a study on law companies to see what was common and found that it was standard to employ, of course, confidentiality agreements, data security, and also biometric and other physical security measures. We actually do this at Nora all the time. A couple of recent examples. A couple years ago, we had a high profile LA case in the entertainment industry, where films investors needed to be protected, they needed a little bit of extra protection because the titles of the films and the actors was highly confidential. So, our clients sought and obtained a protective order and even though we had a confidentiality agreement in place with the client, we executed separate individual confidentiality agreements for every employee who touched the file. So, that was an extra step, above and beyond what was required. Another example was a little bit more tech forward and it was impressive because it happened years ago, but it included biometric and physical security measures. We had a client working for a telecommunications company that needed document and contract tagging, but all of the documents contained personally identifying information. And as we all know, with personal data privacy, the privacy laws are ubiquitous, you've got GDPR, and the California laws, and, you know, each state has privacy laws now. So, we had to be very sensitive to that, so we built a facility where all the data remained on site and our lawyers checked in and out on a keypad, you know, with the biometric entry. They had to leave their phones and personal belongings, laptops, in an external area and work only on client-provided laptops in the secured work area. So, that's sort of an extreme example, but it just illustrates how you need to meet your client where they are. So part of this, as takeaways for clients, part of this is definitely due diligence on your part. You know, ask about protecting confidentiality, ask if you have specific confidentiality concerns, your law company should be happy to accommodate you. But another part of this is that you need to be looking for a company that is, you know, forward facing as far as technology goes and willing to employ whatever it takes to make sure that you are complying with your ethical obligations.

- Yeah, I think it's, you know, it's nice to know that what the ABA found is that most of those law companies are ready and able to make the accommodations. The key thing to do when you're selecting, because it's not the same across the board, and I've heard some horror stories, is to make sure because there's a lot of law companies that have a lot of lapses in their ethical standards. You want to know that that law company is taking responsibility for the work and not just pawning you off on another attorney and washing their hands of the project. 'Cause, you know, part of your due diligence is making sure to learn and ask about the company you're working with.

- Yeah, I agree.

- Essentially one of your partners.

- Yep, I agree, Melissa. Half the battle is knowing what questions to ask.

- All right, Patrice, how about conflicts?

- Okay, conflicts, Rule 1.7, "A lawyer shall not represent a client if the representation involves concurrent conflict of interest." "A concurrent conflict of interest exists if the representation of one client will be directly adverse to another client, or there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client, or a third person or by a personal interest of the lawyer." Okay, so that's the Model Rule, the ABA advises that a law company must not work for adversaries of clients on the same or substantially-related matters. Interestingly, the ABA says that a lawyer could choose another provider, this is because some Ethics opinions say that in the case of a law firm hiring a contractor, the firm takes on all of the contractors' former representations. We, at Nora Legal, we believe that we should operate just like a law firm and even we don't represent clients, in the traditional sense, or give legal advice, we support lawyers, we still observe the conflicts rules. So, it's very important that you ask a law company what their procedure is. Verify that the law company does not work for adversaries and as you can see here, in Florida, there was an opinion that stated that a lawyer could be held responsible for a conflict of interest that may be created by the hiring of a company. So, again, it's important to know your local jurisdiction. As you can see, a Florida opinion held that a lawyer could be held responsible for any conflict of interest that may be created by the hiring of a company, which could arise from the relationships that that company develops with others. So, knowing your local rules is very important and the ABA Commission has also noted that conflicts of interest considerations are increasingly given careful attention. When it comes to working with a law company that has clients all over the globe, you would expect that conflicts wouldn't come up that regularly. You know, if you're in your hometown and you go through a conflicts check, you might see conflicts appear regularly. I remember when I was practicing law in my city, hometown city, we had conflicts all the time, but you'd be surprised that conflicts do arise in the arena of law companies. We check for conflicts of interest all the time and we've had to say no to work just like a law firm. So, make sure that you vet your company carefully and make sure that they're checking for conflicts regularly.

- Yeah, really, every law company should have some procedure just like law firms. It's really worth drawing attention to that one note you talked about that said a outsourcing lawyer could choose another provider if there is a conflict. And unfortunately, as we all know, if something is not required explicitly, there's going to be many who choose not to satisfy that threshold and that really exposes you if the lawyer, who's outsourcing to that law company. So, in a way, it's far safer and absolutely makes sense as part of your due diligence to ask and make sure the law company you choose is watching out for you and protecting you from clients. Okay, so now we are onto review.

- Okay, yes, diligent review. Rule 1.1 states that, "A lawyer shall provide competent representation to a client." So, what does competency mean in the realm of outsourcing? What this means in terms of allocating to a law company is that you are ultimately responsible for the work product. Interestingly, the ABA says that your decision to use a law company may be based on its reputation. We regularly put prospective clients in touch with existing clients, so that will form a basis of their due diligence to investigate the company. But the extent of diligent review when it comes to the work product itself actually depends on the circumstances. For example, if you delegate a motion for summary judgment based on a statute of limitations argument, you can't just sign the finished brief and file it. Even if it's been marketed to you as being file-ready, which many law companies will say that their products are file-ready, you've still got to read it. Even though you gave the law company instructions about the grounds for the argument, you have to read it and take ownership of that. Check your local jurisdiction on this because some local bars will give guidance on this, and they say that what diligent review means is that you have to actually investigate it yourself, some bar associations say it's a matter of professional judgment, but at the very least, this probably includes some competency in relevant technology. ABA comment to Rule 1.1 says that "You must keep abreast of changes in law and practice, including the benefits and risks associated with relevant tech." So, this can mean legal practice tools, data security, and litigation practice such as eDiscovery. So, if you're using some kind of tech tool, it means competency in that. If it's just the work product, it means that you've read it and taken some ownership of it. Bottom line is that you need to own it. You can outsource the work, but you can't outsource the responsibility for the work. The second piece of this is the unauthorized practice of law, regarding unauthorized practice of law, Rule 5.5 states that, "A lawyer cannot assist another in the unauthorized practice of law." This is the question I get most from prospective clients, they wonder, "How does this work?" "How can I outsource this to someone who, you know, might not even be in my jurisdiction?" "Isn't this unauthorized practice of law?" So yes, it is a fact that a lawyer to whom you allocate your work may not be licensed in your state and, as Melissa mentioned earlier, may not even be in the United States at all. And, in some cases, that lawyer may not be licensed at all. Don't worry, a red flag should not go up when I say that, because there are plenty of fabulous lawyers out there who had stunning careers and retired, and maybe missed part of it. And so, they are picking up side gigs as brief writers. So, they let their license lapse, but they're excellent researchers and writers. So, you know, you might not have a licensed lawyer in your state, you might not have a licensed lawyer in the United States, or you might not have a licensed lawyer. Rule 5.5 says that you cannot assist another, and the general consensus on that is that as long as you are maintaining an appropriate degree of supervision, it's okay. There's no comprehensive checklist on this, but determining the competency of the law company in performing the desired services is a great start, we talked about that earlier. Many law companies have both US and offshore lawyers. We do at Nora, our offshore team are all Indian lawyers with Indian law degrees, who've been trained in American jurisprudence, that's a pretty common theme in law companies. They will use offshore lawyers in a variety of countries, but it is worth a inquiry before hiring a law company to find out, you know, where they are and what their training is. So, I think a good rule of thumb is, you know, what would you do if you delegated the work to your paralegal or your, maybe, first or second year associate? That level of review is appropriate and you shouldn't have to go beyond that.

- Yeah, and I think the easiest way to think about this is, what would you do if you had a paralegal or a first year associate in your office and you need to ask them to do something? Over time, you'll build enough trust where you know when you're reviewing the work before sending it off to the client, that your review level will be less in depth and less thorough because you know can count on the quality. But, even in that situation, of course, you're still the lawyer, you're still the one giving the advice and you're still responsible. That's really all this rule comes down to, is that you're the one giving the advice. So again, this isn't onerous, it doesn't create issues or problems, but it's something to be aware of. I'm certainly aware that there are firms and lawyers who don't take this very seriously when they ask their paralegal to draft something and they don't look at it before sending it off. Of course, that can result in malpractice and it can result in harms to the client, and this is exactly the same. Now, Patrice, let's move on to billing.

- Sure, okay, Rule 1.5.a. states that, "A lawyer shall not collect an unreasonable fee or an unreasonable amount for expenses." So, the key here is reasonableness. Again, I'll state it again because it bears repeating, an important part here is to know your state and county or city bar association opinions on this, because there are some variances out there. But the baseline is what we're going to talk about today. First of all, what is reasonableness in terms of time, skill, and experience? And what are the costs of what you are paying for? So, we're going to go over a couple different examples. The first example is just straight cost, that's pretty self-explanatory. If you buy a $500 research memo and you pass that $500 cost onto your client, that's very transparent, you're good, there's no problem with billing whatsoever. The second example is cost plus overhead, you buy that $500 memo and you charge your client the $500 plus your review time, that's generally accepted in most jurisdictions. Again, check to see if there are any local variances in your jurisdiction, but that's another widely accepted method. Then there's something the marked-up rate, which is also called cost plus surcharge. It just has to be reasonable, whatever a reasonable surcharge is, and most jurisdictions agree that what is reasonable is whatever is less than your lowest associate rate. So, something that we do, a nice feature that you might want to look for when you are looking to hire a law company, is to make sure that they are accounting for hours, and what I mean by that is not all services are purchased on an hourly basis. We do have hourly packages, so you can purchase hours and then that's easy to apply this item three, the marked-up rate, because you know what the hours are. But we also offer flat-fee projects, so if you want to buy a brief for $750, it's a flat fee, no matter how much time we spend, but you might want to know what those hours are because it might be important. If you are using this surcharge method, it would be important to know how many hours were spent on that. So, we keep track of our hours on our projects so that even the flat fee projects are delivered with a hourly total to the client. So, again, just another question for you to ask. And then, of course, the last one, if you have an agreement with your client on how that's going to be billed, you know, you're all set, whatever the agreement says will be fine. This, of course, is going to vary depending on how you bill, so if you bill on a contingency fee versus an hourly fee versus a flat rate, those are all factors that are going to have to be taken into consideration.

- And I think a lot of it depends on your type of law too, if you're in personal injury and you're going on contingency fee, this just reduces your cost and increases your profit margin. If you're billing on a flat rate, it makes it easy, 'cause you're not really sharing a cost with the client, it's kind of just up to you to deliver the work product. Where gets more tricky, but still entirely workable is when you're billing at that hourly rate. We have a consultant that works with Nora, who also works closely with the ABAs Committee on Ethics and Professional Responsibility, he has found that although that isn't stated in any bar rule, what has become the rule of thumb is that if you're going to bill by the hour for the work of an outside law company, it's best to bill at something less than the associate level rate. So, as long as it's less than your associate level rate, then you're billing fairly because you're saying to the client, I'm not even billing as much as I would bill, if this was my lowest level associate. So, as Patrice said, we are targeting that Rule 1.5.a, and the only standard there is reasonable. So, certainly billing less than your typical associate rate makes it reasonable, workable, and, of course, from a business perspective, just like any other outsourcing, it can make it profitable. Because let's say you bill your associate out at 150 an hour up to 300 an hour. Well, if the law company is billing you $20 an hour or $30 an hour, there's a significant profit margin and, of course, you can bill for your time reviewing the work. So, there's a lot of flexibility to do it based on the way you normally bill. And Patrice, how about how to decide who to use.

- Yeah, so that's a great question, we've been talking a lot about law companies and how to comply with your ethical obligations when choosing one, but there are so many out there. So, the things that you need to be looking for is monitoring for malpractice, training, tech and responsiveness. I'll take these in turn. So, monitoring for malpractice, what is the company doing to help you avoid ethical pitfalls? As we discussed, they are using confidentiality agreements, they are monitoring for conflicts, they are offering transparent billing. Be sure to ask the law company what it's doing to protect you. When it comes to training, as mentioned, typically law companies are using lawyers offshore, India, South Africa, Philippines, Malaysia, those are all companies that are very useful because they're English-speaking and colonized by the British. So, they have a system of common law just as the US does. Many of these law companies are using hybrid methods of both onshore and offshore lawyers. For us at our company, our Indian lawyers all have Indian law degrees and years of practice experience in the Indian system, then are trained in American law. So, some law companies use all US-based lawyers, and if that's what you want, that's fine, those will be more expensive. So, it all depends on, you know, what you're after. In either case, you shouldn't be paying them for on the job training. So, before you use a law company, you should be asking those questions about what their training is. Following technology, this is something that's very dear to me, lawyers are late to tech. If you look at other industries like medical, engineering, financial services, you know, all of them are a little bit more tech savvy and have been earlier to the game than lawyers. So, what you want the most is efficiency, that's one of the reasons that you're looking to a law company, you know, efficiency and reduced cost. So, one way to create efficiencies is to be up to date on technology. If they're efficient, they're going to get your work done faster and at a lower cost. So, keeping in mind, there are two main priorities of efficiency and cost reduction, technology can help with both. The law company should not only be using the technology itself, but it should also be able to help you find the right technology solution. We do a lot of tech consulting, you know, as mentioned, eDiscovery is topping over 200 different vendors currently and contract lifecycle management is not far behind. So, how do you choose which tech vendor to use? Well, you know, your law company should help you, they should be following technology, not just in terms of using it themselves, but to be able to consult with you. And then, finally, guarding responsiveness. This is really important because, as mentioned, it is likely that your law company is using attorneys in other countries, which might mean different time zones and even language barriers. So, you have, you know, a lag in time and communication or a language issue. This is how we handle it, we have a hybrid team where our US team is client-facing, Melissa and I are part of that team, so we ensure immediate responsiveness, our offshore lawyers, some of them are working US hours, some of them are not, some of them are working their own hours. But we are the client-facing team so that we are ultra responsive, that's, you know, one of our client centric goals is to be responsive. So, that's important to ask is "Who's doing my work?" "Who's my point person?" Hybrid teams are popular, we use hybrid teams, they work great. This can have huge advantages because you can submit your project later in the US day and your team is already starting on it when you're going to sleep, because they're in a different time zone. So, you can wake up and have it complete, in some instances. But on the other hand, it can create problems if you don't have a responsive US manager. So, you really want to make sure that you're working with a good manager and just like you have to vet your company on a lot of other issues we've mentioned, one of the things that you want to vet your company on is how fast you're getting a response. So when you're looking at who to decide to use, monitor for malpractice, find out how they train their lawyers, what technology are they using and how can they help you find technology yourself? And are they responsive?

- Patrice, do you want to just go over a few of-

- Sure.

- The law companies?

- Yes, so these are all, they're all known, well, we know each other, is what I want to say, a lot of us are friends. There are partners here that we refer to and they refer to us. You know, as I mentioned, sometimes conflicts arise, sometimes we know of a partner on this screen who has a core service that we don't have, so we work together many times. But it's important to you to do your due diligence and vet them based on what you've learned today. This is probably not even, you know, a fraction of what's out there, there are so many different service providers that you can find, you know, just by Googling. So, this is just an example of some of the ones that are out there, but the important thing to remember is, you know, hopefully, today you've learned what questions to ask.

- Okay, and you know, we are, at Nora.Legal, offering a great way for new clients to try out outsourcing for 10 hours for free, we really stand behind believing that a solid provider will let you try their services, any provider should let you try their services. So, we offer it and if you have a project you'd like done, we'll spend up to 10 hours on that project for free, whether it's a research memo, pleading or a motion, you can submit it to us. If you go beyond that 10-hour period, we apply our standard subscription pricing of $35 an hour, instead of a typical, $100 an hour price. It's a great way to try out a law company, you would come to www.nora.legal and find the project's mission link at the top right of the page. From there, you would fill in all your project details, mention the promo code, 10FREE, in the promo box. We've had a lot of people start out with us this way, they realize they love using the service and they have continued to reach out to us whenever they have legal research or writing projects. So being in the law company business, we get a lot of questions from attorneys outsourcing for the first time, we've compiled some of the most frequently asked questions. Now, keep in mind, these are good questions to ask to whatever law company you choose to outsource to. We're going to answer some of them as if you were using our service. Let's start out with, "How do I submit a project?" Many companies will require that you sign up as a user on their site. Usually, this gives you access to some kind of back office where you can submit projects and possibly view past projects, we have this as an option for our clients. We also take projects via a submission link, if a client submits a project from the submission link, they're not required to sign up for our website, but they will be prompted to give us all the necessary information to prepare the project. Not all companies will have a project submission link or a back office, some companies take phone calls, some companies even take projects over email. So, what is that necessary information required to prepare a project? I think with any law company, you're going to have to have the same kind of necessary information. For us, we need instructions, which could mean something as simple as, "Hey, I would like you to search for this specific case law." or you might have to give us a detailed explanation of the background of your case and then your issues, it totally depends on the projects you're having us work on. We also need to know the type of project, is it a brief? Is it a research memo? Is it appellate brief? A demand letter? We need to include that information. We also need to know the jurisdiction, the due date, and we need to have any supporting documents to help prepare this project. Basically, we need anything that you would give to a first year associate or a paralegal that you're sending this work to, what would he or she need to complete the task? And really, any law company that you engage with should be asking you for this same type of necessary information. So, another question you might be asking is, "What happens after I submit my project to a law company?" Well, at Nora, we always confirm with the client to make sure we understand the details of the project, we assign the project to a drafting attorney, we answer and confirm any questions that the drafting attorney may have with the client, and then we deliver the final draft of the client by the due date. That is the typical lifecycle of a project Nora.Legal. I can't speak for other law companies, but I would ask what their typical lifecycle is, so that you understand the process and you can manage your expectations.

- Okay, so there are a few other frequently asked questions that are specific to the submission process. So, Melissa, how quickly can someone get a project completed?

- How quickly can work get turned around? Well, speaking specifically for our company, I can tell you that most projects take about four business days. Obviously, that depends on if this is a research memo or an appellate brief. Appellate briefs can take up to two weeks depending on if we have the transcripts or not. Most work can be done within four business days, let's give you an example. So, a research memo, a one-issue research memo, our typical turnaround time could be three to four business days, depending on how much work we have. If you add onto it, the more issues you have, the more time it might take. I don't know if that will add an entire day on, sometimes it will, if you add on two or three issues. It just depends on the project and how back-logged we are with work, I think that goes for any law company, the busier they are, and the more you give them, it's going to take a little bit longer. But it's always a good question to ask ahead of time and make sure that if you need this back by a certain filing deadline, that you let the team know that you need it back, so that you have time to review and, hopefully, time to send it back for revisions, should you need any.

- Great, and what if a client is not happy with the end result?

- If our clients are not happy with the draft they receive, they know that we allow for one free revision. This is another thing you want to make sure of when you're scoping out the law companies, try to find out if they do revisions and what their policy is on revisions. What we do is we offer one free revision, we aren't going to rewrite or redo the work. most definitely, if we missed something, we'll make it up to them. If I have a client ask to do revisions, but they're actually reframing their entire question or they're adding in things that they didn't tell us about in the instructions, then in those instances, we would let the client know that that was beyond the scope of the project and we would need to charge for an additional issue or time. I have also had clients who would like to see a draft part way through and we can accommodate that as well.

- Very good, and how about paralegals?

- Do we hire paralegals? No, we don't hire paralegals. A lot of companies will use paralegals, they use law clerks, they use legal assistants, you definitely need to ask when you're working with the company, if you're getting an attorney working on your project, or if it's a paralegal working on your project. At Nora, we only have attorneys who have studied the US law on our team. That attorney may not be in your jurisdiction or even in the US, but the only people working on your projects are actual attorneys. In fact, we have another level of review where we have a quality control attorney, who is managing the project, and that attorney gives your project a thorough review before delivery. So, those managing attorneys work with the teams overseas and they work with the teams in the US, and those are attorneys that will also review your project as a second level of quality control.

- Great, and what if I want to have the same attorney for every project?

- We actually get this question fairly often because we have our attorney clients who are very happy with the work and then they want that same attorney every single time they submit a project to us. And I'll say with our one-off projects, our non-subscription clients, it is hard for us to always guarantee we're going to be able to get the same attorney to be working on your project. Many times our attorneys that work for us are taking advantage of the gig economy and they're doing this as a side hustle or they're doing it part-time, and many times they might not be available at the moment or they're working on another project. And we have so many great attorneys, 100% if you don't like someone or you didn't like the work that was done, we will guarantee you that you won't get that attorney again. For our subscription clients, we have a dedicated team that works with one subscription client. So, that team does work for that subscription client all the time. We do this so that the teams get to know the client, the client gets to know the team, you start to be able to rely on each other, our team understands the way the client works and the client understands how the team works. So, in that instance, yes, they will get the same team of attorneys. Also, it doesn't hurt to ask, we can always try to get you the same attorney and we definitely will try to do that for you, but it just isn't a guarantee.

- And what about samples? What if I want to see some samples?

- We have tons of samples on our website, so you can go there and look around. If you can't find what you're looking for, we will look for it, redact it and get you the samples you need.

- And what about a client who wants to have consistent hours every month?

- Yes, so like Patrice mentioned before, we have project clients who just submit clients at, or projects as they go along and then we have subscription clients. And so, just like any subscription program, we offer this to the client who has a greater need for assistance. We have packages from 45 hours a month up to 105 hours a month, and the hourly rate obviously decreases with the more hours you purchase. We also offer bundle packages of hours at a discounted rate, which are good for one year.

- Thanks, Melissa.

- So thank you very much for joining us, we appreciate having you here to learn about the ethics of outsourcing legal work, and we hope to talk to you again.

- Thank you.


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