Will the Law Society Regulatory Review Cover LPO?
I wrote 18 months ago about the necessity for some form of independent regulation of the legal outsourcing industry. See my article, Its Time for Regulation and Accreditation of Legal Process Outsourcing Companies. Readers may recall that I proposed a set of minimum standards, including among others, independent verification of LPO companies’ offshore facilities. My quest for regulation doesn’t spring from any deep rooted desire for outside involvement within the industry. However, the excitement I and my peers, within leading LPOs, have for the industry, is certainly for me tempered at times by the concern I have that a couple of bad apples could one day spoil the entire barrel. Quite rightly, the security of client confidential information continues to be the number one concern of most potential LPO clients. It is also the cause célèbre of those within the legal profession’s anti-outsourcing lobby, who are hungrily waiting to pounce on any slip ups. How many times have you read on message boards from Joe the Attorney, “Just you wait until one of those disgruntled Indian LPO employees…..”, well you know the rest.
Perhaps the first rung on the accreditation ladder might actually be some guidance and external regulation from the U.K. Law Society itself, directed towards those that procure legal outsourcing services. Let me explain. I read with interest today that Lord Hunt of Wirral, MBE, has been charged with the task of conducting an independent review of the future regulation of law firms. Lord Hunt states his task is to,
“Provide comprehensive advice on what is needed to achieve effective, proportionate and modern regulation for all parts of the increasingly diverse legal services market.”
The Review website goes on to say that everyone involved with the provision, procurement or purchasing of legal services will be encouraged to make a formal submission to the Review. Interested stakeholders forming the Corporate Liaison group, for example, and contributing to the review, include magic circle firms Allen & Overy, Clifford Chance and Freshfields. As we are well aware, all three of the aforementioned legal giants have either already dipped their toes into the LPO waters or have signaled their intent to do so.
If Lord Hunt truly intends to provide an all-encompassing, comprehensive advice, that genuinely incorporates everyone involved with the provision, procurement or purchasing of legal services, then the LPO model must be examined. I have emailed Lord Hunt today, with a link to this post, and I eagerly await further updates on the Review website.
The Hunt review will begin taking evidence in December and its website can be found at http://www.legalregulationreview.com/home.html
I’ll keep my readers posted on developments.
Perhaps the first rung on the accreditation ladder might actually be some guidance and external regulation from the U.K. Law Society itself, directed towards those that procure legal outsourcing services. Let me explain. I read with interest today that Lord Hunt of Wirral, MBE, has been charged with the task of conducting an independent review of the future regulation of law firms. Lord Hunt states his task is to,
“Provide comprehensive advice on what is needed to achieve effective, proportionate and modern regulation for all parts of the increasingly diverse legal services market.”
The Review website goes on to say that everyone involved with the provision, procurement or purchasing of legal services will be encouraged to make a formal submission to the Review. Interested stakeholders forming the Corporate Liaison group, for example, and contributing to the review, include magic circle firms Allen & Overy, Clifford Chance and Freshfields. As we are well aware, all three of the aforementioned legal giants have either already dipped their toes into the LPO waters or have signaled their intent to do so.
If Lord Hunt truly intends to provide an all-encompassing, comprehensive advice, that genuinely incorporates everyone involved with the provision, procurement or purchasing of legal services, then the LPO model must be examined. I have emailed Lord Hunt today, with a link to this post, and I eagerly await further updates on the Review website.
The Hunt review will begin taking evidence in December and its website can be found at http://www.legalregulationreview.com/home.html
I’ll keep my readers posted on developments.
posted by Mark Ross at
5:58 PM
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4 Comments:
Hi,
In this context, one of the educational arms of the Government of India, the Indira Gandhi National Open University, will soon be offering courses in "Distance Certificate in Legal Outsourcing Professional". Perhaps this will alleviate some of the doubts that people have. This is a course specifically designed to create the LPO professional, and the GoI has good reason to ensure that it is a good one.
With all due respect, the last thing the LPO market needs is additional regulation with respect to security issues or otherwise. While the LPO industry in its present form is arguably new and there are a number of dubious claims especially with respect to the number of lawyers "retained" by the LPOs, the lawyers retained by these companies are first and foremost professionals. The notion that a lawyer sitting in Mumbai or Manila is any more or less apt to adhere to professional standards as compared to a lawyer sitting in New York or London is simply offensive at best. Rather than calling on a government official to provide guidelines, the public should be educated that professional standards safeguarding client confidences already exist.
I generally prefer not to enter into the debate on my own blog but I'd be interested in the answer to this question:
"Why is regulation the last thing that the LPO market needs?"
The question isn't raised to be in any way argumentative, rather to spark debate.
I agree wholeheartedly that it would be offensive to imply that an Indian lawyer holds himself to a lower ethical standard than his U.S. or U.K. equivalent.
However, there is no way of circumventing the fact that in the LPO model, client sensitive information is being a) sent from within the "physical" confines of the instructed U.S. and U.K law firm or legal department, to an outside third party; and b) that the outside third party is situated in a foreign jurisdiction, where different (not necessarily less stringent) data protection, and ethical rules apply.
Regulation of the LPO industry is the last thing that the industry needs because there is no need for such regulation.
First, the LPO industry is not unique. The magic circle and AM Law 100/200 firms with offices strewn around the globe have been outsourcing legal work across national boarders for the last 10 to 15 years. Large law Firms have routinely shipped worked around the globe to keep their associates busy. The nascent LPO industry has merely served to refine this practice and make it more transparent. Moreover, given the global practices already in place amongst the largest US and UK firms, the recent ABA opinion regarding legal outsourcing should have come as no surprise. The opinion merely recognized the "conditions on the ground" and reiterated the common sense that lawyers routinely adhere to when retaining outside experts such as PwC or KPMG.
Second, the legal profession around the world already is regulated by a rich mosiac of professional codes promulgated by national or state codes and/or private bar associations. There is no need to layer yet another set of strictures on a practice that is not unique.
Third, lawyers notwithstanding the jurisdiction that they call home, by and large, take their existing ethical obligations to heart. Having had the opportunity to work with barristers and solicitors in the UK, lawyers in Manila and throughout India, and lawyers from coast to coast here in the US, I can from experience attest to the fact that counsel in London, Manila, Pune and New York take their respective obligations to act in a professional manner and otherwise safeguard client confidences seriously. Moreover, the half dozen or so LPOs that I have visited in Manila and India likewise take their obligations to their clients very seriously.
Fourth, increased or newly promulgated regulation will not provide greater legitimacy to the LPO providers. Unfortunatley, a number of the LPO providers are "managed" by ex-large firm associates who have little to no real experience concerning document reviews or worse yet by "paraprofessionals" that have worked in other non-legal outsourcing endevours.
Finally, I suggest that we should always view a call to regulate with a healthy degree of skepticism. If nothing else, we should be wary of the law of unintended consequences.
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