Outsourcing for Lawyers: Ethics and Considerations

Let’s face it. The billable hour crunch is real. Most lawyers only get a few hours of billable work each day, and the rest of their time is eaten up with administration, billing, and other tasks.

Why? Because running a law office also means you’re managing a small business. Unfortunately, however, billable hours are what keep the lights on. If you’re writing marketing newsletters, drafting invoices, or entering new client information into your system, you’re not able to use that time for earning.

Enter outsourcing. More and more lawyers are outsourcing everything from administrative tasks and marketing to accounting and legal work. It’s a sensible choice, but there are ethical concerns to be aware of as you proceed.

Administrative assistance/paralegal

For those seeking assistance with administrative tasks or for paralegal work, there are a few options.

The first and most traditional route is to hire a part-time assistant or paralegal to come work in your office. The primary concern here is whether or not they also work part-time for another law firm in your area. It’s generally recommended that you verify there isn’t a conflict of interest before hiring any additional help.

A second route is to hire a freelancer. In our increasingly remote work world, this is becoming more common. However, don’t forget to ask them to sign a Non-Disclosure Agreement (NDA)—and make sure they understand it, too. After all, freelancers are typically juggling multiple clients, and they must maintain your clients’ privacy, as well as refrain from sharing information about cases your firm is working on.

Additionally, if the person you hire isn’t working in your office, you’ll want to make sure you have a clear Bring Your Own Device (BYOD) policy in place.

The third and final option is to beef up your practice management system. This may not replace all your administrative or support needs, but for some firms, it can bridge the gap—and at a far lower cost. For instance, your practice management system should allow for fully integrated client intake forms that don’t require any data entry on your part.

Marketing and communications

Marketing is a key part of any law firm’s budget. It’s also one of the most straightforward areas to outsource because whomever you hire won’t be in contact with sensitive client or firm information.

That said, there are still ethics considerations. American Bar Association Model Rules 7.1 and 7.5 discuss how lawyers may represent their services.

Because of this, we recommend hiring marketing professionals who understand the standards lawyers must adhere to when communicating about or marketing their services.

Accounting and bookkeeping

For accounting and bookkeeping outsourcing, there are a few things to keep in mind.

First, make sure you’re using your practice management system to the fullest extent possible. From drafting invoices in bulk to automatically updating across fully integrated billing and accounting systems to running three-way reconciliation, there’s a lot a good practice management system can do.

However, for most law firms, additional accounting help may still be in order. To that end, take the time to vet anyone you’re considering hiring. The last thing you want is for you—and, by extension, your clients—to fall victim to fraud.

When you bring on an accountant or bookkeeper, providing training on your particular system and ethics considerations is a must. The better documented your workflows and internal processes are, the easier this will be.

Additionally, the responsibility for ethical management of trust accounts ultimately rests with you.^[1] Be extra sure to review and monitor any work done in this area.

Legal work

In many states, outsourcing legal work is allowed. But once again, the responsibility for ethics concerns ultimately lands with you.^[2] So just as you would with an accounting hire, be sure to thoroughly vet anyone you bring on—and document the process.

Whether you’re hiring someone you know or someone you’ve never met, you will also need to consider how you will securely share files, tasks, and communications with this person. The safety of your and your clients’ information depends on the security of your practice management system and other tools.

In addition to protecting your clients’ confidential information, you must also check that there are no conflicts of interest and make the outsourcing arrangement clear to your client.

Likewise, you must avoid unauthorized practice of law by the lawyer you hire and ensure the proper supervision of the legal work they do.

To that end, training will be an important part of the on-boarding process. Every law firm does things a little differently, and it’s essential that you communicate your firm’s processes, as well as ethics and values.

Use modern technology where you can

Outsourcing is a common reality faced by law firms seeking to balance billable hours and the successful management of their law firm as a business.

However, whenever you bring someone on—whether a temporary legal assistant or an accountant you hope to work with for years—ethics considerations should be first and foremost in your mind.

Be sure to:

• Vet all hires, especially those who will encounter or work with client information or any other sensitive information
• Verify there are no conflicts of interest, whether you’re bringing on a part-time paralegal or an overflow lawyer
• Fully train anyone you bring on—even if they’re a legal professional or have worked at a law firm before—and establish a security policy
• Use secure systems for sharing information and communicating requirements for how the new hire will handle cyber and device security when they’re performing work for you.
• Understand that responsibility for everything from trust accounts to work performed by other legal professional lands with you

And finally, make sure you’re using your practice management system to its fullest capacity before you bring someone else onto your team.

A good practice management system will typically offer a legal-specific, single-platform approach that vastly reduces data entry, comes with automated document generation, can run three-way reconciliation for you, and provides safeguards to help ensure the proper and ethical management of trust accounts.

A practice management system can’t cover all your outsourcing needs, but a good one can cover a lot—and save you money in the process.

References

1. Delegate, Don’t Abdicate, Client Trust Accounting
2. Ethical Implications When Outsourcing Legal Work