How To Handle A Legal Outsourcing Situation

LEGAL PROCESS OUTSOURCING COMMENTS & SUMMARIES TABLE OF CONTENTS CCBE (Conseil des Barreaux Européens/Council of Bars and Law.p. 5-6 Societies of Europe) CCBE provides a copy of the CCBE guidelines on legal outsourcing that were adopted by the CCBE Standing Committee meeting in Paris on June 24, 2010. Cobra Legal Solutions p. 7-13 Cobra Legal Solutions is an offshore operational facility in Chennai, India, with headquarters in New York City. Cobra Legal Solutions provides a summary of its educational programs, security measures, and employment policies. Eric P. Chapman.p. 14 Mr. Chapman perceives overseas outsourcing of legal jobs as potentially dangerous. Linda Evanswood..p. 14 Ms. Evanswood outlines procedural obstacles to international outsourcing. Edwin L. Felter..p. 14 Judge Felter defers to the expertise of former ABA Standing Committee on Ethics and Professional Responsibility Chair, Steven Krane. Darrell C. Ford.p. 14-15 In Mr. Ford s opinion, foreign lawyers and non-attorneys lack the background and skills needed to adequately perform document review and certain types of transactional work. Michael Ford Executive Vice President, UnitedLex Corporation..p. 16-20 Based in Overland Park, Kansas, UnitedLex Corporation provides technology-powered legal and business solutions to Global 500 companies and AmLaw 200 law firms. UnitedLex provides details regarding its training program, in addition to outlining security measures and quality control processes. Jill E. Fox...p. 21-22 Ms. Fox stated that her limited use of outsourcing was positive and stresses the importance of obtaining client consent. Fred Goldman p. 22-24 Mr. Goldman believes that the U.S. should restrict the practice of law within its borders and to its citizens. Richard Granat..p. 25-41 Mr. Granat, Chair of the elawyering Task Force of the LPM Section of the ABA submitted comments which included an article by Stephanie Kimbro; a comment that the

elawyering Task Force submitted to the North Carolina Ethics Committee, and a letter sent to the N.C. Ethics Committee explaining the functions and benefits of cloud computing. Ezra A. Johnson p. 42 Mr. Johnson expresses concern that foreign lawyers receive privileges denied to U.S. lawyers. James Lai.p. 42-43 Mr. Lai is in-house counsel at Cision US, Inc. His company has outsourced both transactional and litigation work. He questions the ability of overseas providers to comply with contractual and legal rules governing privacy and data. John Levin p. 43-44 Mr. Levin, retired in-house counsel, stated that his company used outsourcing judiciously and that the experience was varied. Elliott Malone.p. 45-50 A summary of key considerations in regards to legal process outsourcing is provided. Gabe Miller.p. 51-53 Mr. Miller, in-house counsel, stated that his company used foreign outsourcing for a particular legal transaction "reluctantly," and that he would have preferred to use local counsel if it were more cost effective. Geoffrey Naab..p. 53 Mr. Naab questions the definition of legal process outsourcing" and its relation to process serving. William G. Nickol p. 53-54 Mr. Nickol believes that the ABA outsourcing opinion sanctions the unauthorized practice of law, and this takes jobs away from unemployed U.S. lawyers. Herbert Ogden...p. 55 For cost reasons, Mr. Ogden has outsourced legal work only to professionals in his own country for the purpose of writing appellate briefs and researching land records. Jared Piaggione p. 55 Mr. Piaggione provides his narrative as a basis for prohibiting legal process outsourcing. George Recco..p. 55 Mr. Recco voiced his opposition to legal process outsourcing. Mark Ross (Integreon).p. 56-103

Mr. Ross, Vice President Legal Services, Integreon, provided a comprehensive response with Integreon Submission on Legal Process Outsourcing to ABA Section of International Law and ABA Commission on Ethics 20/20." Sameep Vijayvergiya...p. 104 Mr. Vijayvergiya, who is licensed both in the U.S. and India, states that although he believes Indian lawyers are competent, he has concerns regarding outsourcing entrepreneurs with insufficient knowledge, skills, and training. Sally Scherer...p. 104-105 Citing the difficulty of properly overseeing a contract lawyer, either in the U.S. or overseas, Ms. Scherer is opposed to the practice. Michael Schwartz...p. 106-197 Mr. Schwartz, a New Mexico lawyer, submitted pleadings associated with a disciplinary case he handled before the New Mexico Supreme Court, In re Goodman. Michael P. Simkus..p. 198-200 Mr. Simkus, who cites experience investigating outsourcing and in developing an outsourcing company to review documents, is in favor of outsourcing so long as it is conducted according to rigorous ethical and procedural standards. J. David Smith.p. 201 Mr. Smith, a patent lawyer, is opposed to foreign outsourcing because of the large number of unemployed lawyers in the U.S. Lisa Solomon p. 202-207 Ms. Solomon, a home-based solo practitioner, submitted a formal comment with the National Association of Freelance Legal Professionals that discusses the differences between contract and freelance lawyers, job satisfaction among contract lawyers and freelance lawyers, the ABA outsourcing opinion, and legal outsourcing patterns. Stacy Spann.p. 208 Ms. Spann believes that foreign-educated lawyers in other countries cannot provide the same quality of services to U.S. clients as can lawyers trained in American law in American law schools. Quis Lex Inc.p. 208-209 Quis Lex is an outsourcing firm headquartered in New York. It advocates conducting business in accordance with the standards set forth in the ABA, New York City Bar, Ohio outsourcing ethics opinions, and stringent internationally accepted audit guidelines and rules. Mark S. Walter.p. 210 Mr. Walter opposes legal process outsourcing on the grounds of having to compete with unlicensed Indian lawyers who charge less than U.S. lawyers.

David C. Wells.p. 210-211 Mr. Wells, a solo practitioner, outsources tasks, but only in the early stages of representation and only locally. He is opposed to outsourcing legal process work overseas.

CCBE GUIDELINES ON LEGAL OUTSOURCING C o n s e i l d e s b a r r e a u x e u r o p é e n s C o u n c i l o f B a r s a n d L a w S o c i e t i e s o f E u r o p e association internationale sans but lucratif Avenue de la Joyeuse Entrée 1-5 B 1040 Brussels Belgium Tel.+32 (0)2 234 65 10 Fax.+32 (0)2 234 65 11/12 E-mail ccbe@ccbe.eu www.ccbe.eu

CCBE Guidelines on legal outsourcing Legal outsourcing is a practice in which a regulated legal professional ("outsourcing lawyer") outsources legal work which is usually done by lawyers, trainee lawyers, paralegals e.g. research, due diligence, litigation discovery, etc. ("legal work") to a service provider in another country who is not a regulated legal service provider ("service provider"). This situation poses many challenges to bars and other regulators responsible for regulating lawyers or giving guidance to lawyers on how to deal with legal outsourcing, in order that it is carried out in full conformity with the core values of the legal profession and the ethical-deontological rules applicable to the outsourcing lawyer. When undertaking legal outsourcing, the outsourcing lawyer must comply with all professional/ethicaldeontological rules of his/her home country, as well as with the CCBE Code of Conduct where appropriate. When complying with these professional/ethical-deontological rules, no difference should be made between a lawyer practising in a law firm and a lawyer who relies on an external legal service provider. Each of them is bound by the same professional/ethical-deontological rules and in particular by the rules relating to the absence of conflict of interests and to professional secrecy-confidentiality. These guidelines aim to assist outsourcing lawyers by highlighting some of the issues which should be taken into consideration: a. Legal outsourcing is different to other methods of using the help of regulated or non-regulated professionals, and outsourcing lawyers need not only a definition, but some explanation as well, as to when special outsourcing rules should be applied. b. There is a more inherent risk in legal outsourcing than in the more traditional form of sharing work with other regulated legal professionals, and outsourcing lawyers need guidance to avoid it. c. Regulatory regimes are different, and lawyers should be clear whether legal outsourcing is permitted under the applicable regimes of the outsourcing lawyer and the service provider, and what kind of caution should be applied when choosing the activity to be outsourced. d. Lawyers and their bars have a specific interest in protecting the core values of the legal profession in the case of legal outsourcing, in particular with regard to confidentiality and avoiding conflict of interest. e. The protection of the outsourcing lawyer requires the application of specific measures e.g. before undertaking legal outsourcing, it is advisable that the outsourcing lawyer verifies with the external legal service provider that the core values of the legal profession remain protected; the outsourcing lawyer should be made aware of the importance of such measures; and it would also be useful to provide the outsourcing lawyer with a due diligence template checklist. f. Loyalty towards clients is of paramount importance also in legal outsourcing, and outsourcing lawyers need to be advised how to obtain the consent of the client, and how to keep the client fully informed, and to make the whole outsourcing process fully transparent. g. The use of legal outsourcing does not reduce the responsibility of the outsourcing lawyer, and outsourcing lawyers need guidance in selecting a service provider and supervising the service provider s activities. h. The increased risk profile of legal outsourcing requires more attention from the bars concerned, and outsourcing lawyers should be advised as to what records should be kept to enable the bar to monitor legal outsourcing activities. i. The different risk profile of legal outsourcing requires a review of the professional indemnity insurance requirement for outsourcing lawyers. C o n s e i l d e s b a r r e a u x e u r o p é e n s C o u n c i l o f B a r s a n d L a w S o c i e t i e s o f E u r o p e association internationale sans but lucratif Avenue de la Joyeuse Entrée 1-5 B 1040 Brussels Belgium Tel.+32 (0)2 234 65 10 Fax.+32 (0)2 234 65 11/12 E-mail ccbe@ccbe.eu www.ccbe.eu 24.06.2010 2

Cobra Legal Solutions: Cobra Legal Solutions response to ABA Commission on Ethics 20/20 Legal Process Outsourcing (Domestic and International) Call for Comments: C. For providers of legal process outsourcing services: 1. Where do your workers work? Cobra Legal Solutions offshore operational facility is located in Chennai, India. Chennai (formerly Madras) is the capital city of the Indian state of Tamil Nadu and is the fifth-largest city in India by population. Chennai has a broad-based economy predominated by the automotive, healthcare, hardware manufacturing, software and financial services industries. Chennai is India's second-largest exporter of software, information technology and IT-enabled services. The city has long been a major center for the outsourcing industry, and Cobra capitalizes on the modern, spacious facilities and proven, state-of-the-art technology and connectivity (telecom and transport) infrastructures that are in place. Numerous universities and educational institutions in Chennai graduate global talent and foster a highly skilled labor pool from which Cobra draws. Our employees work in Ascendas IT Park, in a state-of-the-art facility, which boasts a world class Data Center and up to date audio-video conferencing facilities. Our facilities conform to the highest and most stringent security measures, including ISO 27001 standards, biometric access, access card, CCTV monitoring, and round the clock physical security. 2. Are the workers who perform the outsourced tasks educated and licensed as lawyers somewhere? If some are and some are not educated and licensed as lawyers somewhere, what is the proportion of lawyer to non-lawyer? All employees performing outsourced legal work are Indian educated/licensed attorneys. Our Managing Director Litigation, an attorney trained and licensed in the United States, is on-site for the daily oversight, supervision, and management of Cobra s team of lawyers. He works directly with clients and outside counsel to facilitate the smooth running of a project. 3. What proportion of lawyer workers are educated and licensed in the jurisdiction where they sit, educated and licensed in the jurisdiction whose law governs or educated and licensed in the U.S? All of our reviewing attorneys (currently 54) are educated in India and are licensed to practice throughout the country. Our Managing Director Litigation, Kevin Clark, is a U.S. trained and licensed attorney. Mr. Clark is a member of the Bars of the District of Columbia and the State of Illinois. He is admitted to practice before the United States Supreme

Court, United States Courts of Appeal for the 7th, 10th, Federal, Veterans Claims, and District of Columbia Circuits, and the United States Court of International Trade. Mr. Clark is also a licensed Solicitor before the Supreme Court of England and Wales. 4. For non-u.s. based providers do you have a staffed physical presence in the U.S? Who staffs it (e.g., U.S. licensed lawyers) and what is done there? Cobra maintains its headquarters at 1501 Broadway in New York City. From this strategic location our CEO and Managing Director (both non-lawyers) are best able to manage client relationships with fast and easy access to clients throughout the United States and the United Kingdom. Corporate administration and litigation technology consulting services are also provided from our New York location. Cobra does not have review facilities in the United States. 5. How do you decide which individuals should work on which matters? Cobra Legal Solutions seeks to staff projects with the most appropriate personnel available. Staffing is based on past performance and training evaluations. Cobra s training team provides feedback on each employee, based on evaluative exercises conducted for each activity. This feedback is sent to HR and management on a regular basis. A resulting performance matrix highlights each employee s skill sets. Work is assigned to individuals based on the performance matrix. 6. What do you do to help your employees understand the U.S. rules of professional conduct and who provides this education or training? Cobra has an exclusive training team that educates new recruits on U.S. rules of professional conduct and ethics. A comparative study of Indian laws and U.S. standards on professional conduct and ethics reinforces our Indian attorneys understanding of the U.S. rules on professional responsibility. The main purpose behind our training is to help employees understand the importance of professional conduct and ethics and their role in the context of the LPO industry. Our team of lawyers is kept up-to-date on the latest events in the industry, specifically in reference to views and opinions within the U.S. legal establishment regarding the issues of professional conduct and ethics within the legal outsourcing industry. Additionally, each time an employee is deployed on a project, he or she signs a confidentiality agreement and a conflicts check form which act as constant reminders to an employees adherence to some of the most important rules of professional ethics. The Cobra Training team, along with Kevin Clark, Managing Director - Litigation, provides training to our lawyers. Mr. Clark has extensive experience

as a litigation attorney supervising document reviews and other areas of discovery services. He has developed sophisticated best practices for quality control that have been repeatedly praised by our clients, and allow them, as they attain a comfort level with our work product, to avoid spending unnecessary (and billable) time reviewing and modifying things prior to a document production. 7. How do you do train and assess the competence of your workers and assess and verify the quality of the work done? Our employees undergo an intensive training program during which they are evaluated to determine their competence. Cobra provides both induction training and continual training. Induction training provides our newly hired employees with the knowledge and information required to understand the nature of the document review/research and writing process. Our induction training is a twelve-week course that includes: U.S. Federal Rules of Civil Procedure with a focus on Discovery; E-Discovery basics using the EDRM Model to ensure best practices; Litigation application training (Case Central); Document review training on the dummy database; Introduction to U.S. legal research and writing (Bluebook, citations, sources, and style); and Introduction to the U.K. legal system (focus on laws of England and Wales). Continual training is given to existing employees to address specific client- and project-based requirements (i.e., contracts, intellectual property rights, legal research and writing). In addition, English language training is also provided, covering the basic rules of English, the appropriate usage of the rules, the differences between American and British English, and terms and phrases used in the United States. Our continuing legal education activities include, but are not limited to: Introduction to document review software tools; Dummy database training and simulation of real time scenarios; Intellectual Property training; Contract Management training; Advanced legal research and drafting techniques;

Daily reading and comprehension exercises based on current events in U.S. legal and business fields (Wall Street Journal, New York Times, and Washington Post); and Training in U.S. grammar and idioms. The quality of work performed by our employees is assessed and verified by our Project Management Team, led by the Managing Director Litigation. Error Tracker Reports and additional feedback is sent to them in real time. Cobra also has comprehensive Quality Control and Quality Assurance procedures in place. These procedures are based on Six Sigma principles and refined project management and process management processes. We are currently being certified for ISO 9001 for Quality Management. Assessing and verifying the quality of work is an on-going process that is always being improved upon. 8. What types of security systems to you have in place to ensure data integrity and compliance with confidentiality requirements of those who hire you? At Cobra, we take a holistic approach to security and confidentiality. We address security and confidentiality through network/data security, premises security, and employment policies. In addition, a Business Continuity Plan and Disaster Recovery Plan are in place. Network/Data Security Cobra s operations facility utilizes ISO 27001 compliant information security management systems and practices. Data is delivered to and maintained by a hosting company selected by the client. Data files are never bulk transferred to Cobra. Cobra only sees images of folders and documents. Terminal and Citrix servers are used to connect our U.S. server with the client s server. By this methodology, the client s data is secure and cannot be downloaded to Cobra s local system. We do a full backup and a differential backup daily for all servers and user folders based on the criticality of files being backed up. In case of any failure, the backup will be restored as per the documented procedure. Transmission of data is secured over 128-bit SSL protocols. We use secured VPN connectivity, to encrypt or decrypt data for maximum security. A VLAN is in place to prevent merging one client s information with that of another. All incoming and outgoing data is routed through Antivirus servers. Virus definitions are updated daily.

Upon completion of a project, we use third-party software to securely purge our hard disks of the client s documents and data. All emails are monitored through a third-party application. Emails sent to outside domains are immediately blocked and an alert is sent to the administrator. Application and device control blocks all USB, CD/DVD drives, floppy drives, Bluetooth, and optical devices. Unified theft management devices are used to monitor and track all incoming and outgoing packets. Premises Security Fencing surrounds our tech park with manned gated entry points. ID checks are issued upon entry to the building. Card access is required for building elevator banks. A security guard is present 24/7 at the single entry point to our offices. Group access is restricted. Biometric (thumbprint) access controls entry to our data center. Audits are performed to analyze unauthorized access to the data center. 16 high resolution CCTVs inside the data center monitor unauthorized access. Card access to our separate, secure IT control room is limited to our IT team and senior management. APC UPS with 80 KVA centralized UPS system/30 KVA centralized UPS system for data center. We conduct periodic security workshops and regular internal compliance audits. We have dedicated customer workspace. Our facility has segregated, secure project rooms for specific clients and no information can be taken out of the locked, dedicated rooms. Employment Policies Cobra team members have monitored and restricted Internet access. The Managing Director Litigation, a trained and barred U.S. attorney, handles all email correspondence between clients and Cobra. Copiers and printers are not available to the review staff. Printer rights are limited to the printing of management reports and training materials. Read/write drives are not available on the same machines used for review by the review staff.

We do not create hard copies of review manuals, counsel lists, and other sensitive material. Only a limited number of people who have worked on the live project for a client and have signed the Non-Disclosure Agreement (NDA) have access to the electronic copies of these documents during the project. Access is revoked immediately after the project wraps up. Scheduled and random audits are performed regularly to ensure adherence to all principles and procedures. We do not employ temporary staff. Cobra does not use subcontractors to provide our services. All of our employees are screened as per the BS7858 standards. An independent firm conducts background checks of Cobra s U.S. executives. The results include education verification, past employment verification and references (including gap analysis), character reference checks, financial history (including credit reports), and criminal history checks. The Board of Directors also conduct its own independent background checks and due diligence, by back channels, such as checking their references and making industry inquiries. a. If there is a difference in security systems for work performed inside and work done outside the U.S., please explain. Our U.S. headquarters does not provide legal services. Security measures described above pertain to our offshore facility only. 9. What types of systems do you have in place to avoid conflicts of interest regarding those who hire you? Our employees undergo a series of background checks before and during employment. All Cobra employees and attorneys sign a confidentiality agreement to protect the client s information. Potential conflicts are verified before every engagement by adhering to the ABA Model Rule 1.7. All information regarding parties currently and previously engaged by Cobra review attorneys are continuously updated. If there are potential conflicts based on the ongoing reviews, those potential conflicts are immediately disclosed. In addition, we have a conflicts of interest process we utilize when engaging a new client or a new project with an existing client. This consists of a conflicts check with regards to our other clients and our employees. 10. Are you regulated? In what way and by whom? Are there competing regulations and regulators? Cobra supports the creation a self-regulating body that would work hand-inhand with the ABA to set minimum thresholds for companies in the LPO industry, and provide a set of principles and guidelines to ensure the proper

development of this market. At present the LPO industry does not have a regulatory body. However, in India, LPO industry players are in talks to form an association of LPO companies. Further, the leading LPO companies are in discussion with Nasscom, CII and PHDCCI to form a regulatory body. This would help the LPO industry set up standards as well as win the confidence of clients abroad. The association will work towards creating standards for quality service similar to those adopted by the software industry. It also plans to provide standardized training procedures for lawyers who intend to join LPO companies. Such an institute or industry body would provide basic training to lawyers and would familiarize them with international legal issues. Cobra Legal Solutions, and other LPO companies that only hire lawyers, are educated in international legal issues. We abide by the ethical opinions given by the American Bar Associations on the Ethics of Legal Outsourcing. We, along with the ABA board, would like to take the initiative to formulate a set of common regulations for the LPO industry that would help to create a fair playing field for all LPO service players, stakeholders, and legal departments. We are open to abide by the policies and regulations on legal outsourcing of countries other than the U.S.

ERIC CHAPMAN: Dearest Ms. Vera, By allowing law firms to ship attorney jobs overseas, the ABA has essentially destroyed the legal industry. It is illogical that a lawyer in India, who has not attended an ABA accredited law school or taken the Bar Exam or the MPRE, can practice law in New York more easily than an Alabama Lawyer. In my opinion, your organization is playing with fire. It's a matter of time before a foreign attorney who is not subject to the laws of the U.S. engages in insider trading or likewise nefarious conduct. At this point, I am not sure whose interests you are out to protect. As an attorney, I am certain you don't think of my interests when you pass laws giving jobs to foreigners. Your relationship with me ends with ABA membership and a magazine subscription. There are legions of unemployed attorneys out there that should be doing this work, not third party nationals. When will you help them??? It's your fault they are unemployed and unemployable. Thank you! LINDA EVANSWOOD: I am against international outsourcing. Reasons: If a client sues a lawyer on an issue regarding international outsourcing, think of the cost to the client to serve subpoenas on a company or person outside of this country? Will the client even be able to serve a subpoena? How will the client enforce the subpoena? Allowing international outsourcing puts the lawyer in a much better position during a malpractice lawsuit or breach of fiduciary duty because the witnesses and documents the client needs are in another country. Drafting something that says that the lawyer is responsible for producing the witnesses and documents will not work b/c the fox is then guarding the henhouse. Extremely bad idea to allow international outsourcing. I am presently involved in an action before the ACAB where I am the petitioner. I am a lawyer and have hands on experience with taking on a lawyer for breach of fiduciary duty. EDWIN L. FELTER: I would defer to Steven Krane (Board of Governors and Past Chair of the Standing Committee on Ethics and Professional Responsibility). He wrote the ABA formal ethics opinion on outsourcing. DARRELL FORD: Ms. Vera: Per the prompt of the ABA Commission on Ethics, my opinion regarding the ethical and professional implications of outsourcing are as follows: I think that outsourcing legal work is a poorly developed, short-term solution to a the problem of maintaining high partner profits. The process, generally speaking, fails to actually develop legal reasoning skills or develop skilled and licensed attorneys, a major shortcoming in the modern law

school era. In a quest for cost cutting, the ABA's push for increased legal outsourcing is instead damaging the future of the legal field. Most US jurisdictions are protectionist about the practice of law - though admitted in Michigan, I can't practice law 45 minutes from my home, in Toledo, Ohio. In contrast, foreign attorneys (and non-attorneys, from my understanding) increasingly are responsible for document review and certain transactional work, operating under the understanding that a US attorney will at some point review their work product. The best justification I've heard for this process is that document review isn't the practice of law. However, document review companies around the country require proof that an individual have passed the bar exam for the state that a document review project is in. Further, as a summer associate and a law firm associate, some of my time has been spent doing document review for my firm. My time spent doing document review work has helped me learn about the litigation process (something not covered in law school) and allows me to better understand the import of properly drafted contracts, memoranda, and even emails. In theory, my understanding of the discovery process is improving, such that when I oversee cases, I know how to narrowly craft discovery requests and better serve my clients. As more and more document review work (part of the discovery process) is sent out of local jurisdictions or overseas to be worked on by individuals who have not attended an ABA accredited law school, taken the local bar exam, or studied rules of professional responsibility, it becomes increasingly difficult for recent law graduates to find work that will teach them any practical legal skills. In the interim, clients are saving some transactional costs and partners continue to earn substantial profits, but in ten years, most of the people familiar with the discovery process will not be authorized to write discovery requests or to counsel clients. It's clear that the push for increased outsourcing of legal work is being done to cut costs to appease large clients and large law firms, but more legal outsourcing truly harms the future of the ABA, the practice of law across the several states, and will raise the costs of legal work to clients over the long haul.

Ms. Natalia Vera Senior Research Paralegal American Bar Association RE: The ABA Commission on Ethics 20/20 Legal Process Outsourcing Call for Comments May 6, 2010 Dear Natalia: I am writing in regards to The ABA Commission on Ethics 20/20 Legal Processing Outsourcing (Domestic and International) Call for Comments and my company s responses to Section C., which references input from providers of legal outsourcing services. UnitedLex Corporation (www.unitedlex.com) provides technology-powered legal and business solutions to Global 500 companies and AmLaw 200 law firms. Based in Overland Park, KS, we have established clients and service delivery centers throughout North America, Europe, and Asia. As UnitedLex s business model integrates its law firm heritage with industry leading technology platforms, we emphasize stringent adherence to ABA Formal Opinion 08-451, Rules of Professional Conduct governing the jurisdictions in which we work, and our ISO 27001 certification. Accordingly, we advocate the ABA Commission on Ethics initiative to establish uniform guidelines for the applicable ethics and confidentiality requirements for legal work that is performed by lawyers and non-lawyers and is categorized as legal outsourcing. On a related note, my colleague Dan Reed, CEO of UnitedLex, and I were the main proponents in a recent initiative to establish a globally adopted certification process for providers of legal outsourcing services; many of which include the largest ediscovery, document review, contract management, and IP solution providers. The proposed certification process included provisions for training, testing, and certification for lawyers and non-lawyers who perform legal work that is not considered as the practice of law. The context of the certification process included some the following: 1. Compliance with ABA Formal Opinion 08-451, in its entirety 2. Compliance with specific sections of the California Rules of Professional Conduct 3. Compliance with specific sections of the ABA Model Rules of Professional Conduct 4. Disclosure of credentials and location of all personnel performing legal support work 5. Adherence to certain standards of data and premise security (ISO Certification or compliance) 6. An audit process to ensure compliance of all requirements 12980 Foster Street Suite 390 Overland Park, Kansas 66213 +1.913.685.8900 Toll Free 888.385.3725 www.unitedlex.com

While many of the fifteen companies involved in the initial working group agreed to the certification process, there was not a consensus of all participants to move the initiative forward. Thank you for the opportunity to respond to the Call for Comments. Our responses to Section C. are included on the following pages. Please let me know if any additional input is needed. Regards, Michael Michael Ford Executive Vice President 512-497-0001 michael.ford@unitedlex.com 12980 Foster Street Suite 390 Overland Park, Kansas 66213 +1.913.685.8900 Toll Free 888.385.3725 www.unitedlex.com

UnitedLex Response to the ABA Commission on Ethics 20/20 Legal Process Outsourcing (Domestic and International) Call for Comments C. For providers of legal process outsourcing services: 1. Where do your workers work? UnitedLex is based in Overland Park, KS. Our U.S. offices where legal support work is performed include Overland Park, KS, Charlotte, NC and Gainesville, FL. We also perform legal support work in India and Israel. These offices are staffed with UnitedLex employees and include lawyers, IT, and administrative personnel. We have account management offices in Atlanta, Austin, Miami, New York, and Orange County. 2. Are the workers who perform the outsourced tasks educated and licensed as lawyers somewhere? If some are and some are not educated and licensed as lawyers somewhere, what is the proportion of lawyer to non-lawyer? Yes. UnitedLex provides numerous legal support and technology services, some of which fall within the categorization of legal outsourcing. All workers who perform legal outsourcing tasks are educated and licensed as lawyers in accordance to the licensing requirements of their respective jurisdiction. For legal support work such as document review and contract management, all are lawyers. For legal support work such as data processing and hosting, we maintain an approximate 40% - 60% distribution between IT staff and lawyers. In the United States, we only staff personnel who have received their juris doctorate degree from an ABA accredited institution and have passed a State Bar examination. In turn, each is recognized as a licensed attorney within their jurisdiction. It is our companywide prerequisite to have licensed attorneys working on UnitedLex client engagements which are considered as legal outsourcing. Our non-u.s. based work force has completed the requisite legal education within their country of residence and maintains the appropriate credentials within that country. Our non-u.s. based work force also includes some U.S. licensed attorneys. Our non-u.s. based work force is directly trained and managed by U.S. licensed attorneys who work onsite in the non-u.s. locations. 12980 Foster Street Suite 390 Overland Park, Kansas 66213 +1.913.685.8900 Toll Free 888.385.3725 www.unitedlex.com

3. What proportion of lawyer workers are educated and licensed in the jurisdiction where they sit, educated and licensed in the jurisdiction whose law governs or educated and licensed in the U.S? 100% of our U.S. lawyer workforce is educated in the U.S. and licensed in the U.S. Nearly 90% work within their individual licensing jurisdiction. Nearly 88% work within the jurisdiction of their education. 4. For non-u.s. based providers do you have a staffed physical presence in the U.S? Who staffs it (e.g., U.S. licensed lawyers) and what is done there? Staffing in our non-u.s. based offices is managed by U.S. licensed attorneys. The majority of work performed in our non-u.s. based offices consists of document review and contract management. 5. How do you decide which individuals should work on which matters? Individuals are assigned to specific client engagements based upon their expertise within a particular domain. We align the appropriate resources by factoring litigation practice specialization and complexity of the matter. All work is performed under the direct supervision of our own U.S. licensed employees as well as our clients. 6. What do you do to help your employees understand the U.S. rules of professional conduct and who provides this education or training? We employ a comprehensive training program emphasizing complete understanding and compliance with U.S. rules of professional conduct. We reference ABA Model Rules of Professional Conduct, California Rules of Professional Conduct, and ABA Formal Opinion 08-451 in our education and training. Education, training, and ongoing management are provided by U.S. licensed attorneys who are employees of UnitedLex. 7. How do you do train and assess the competence of your workers and assess and verify the quality of the work done? We draw upon our law firm heritage and combine our vast technology resources to instill a highly proficient workforce and work product. We maintain ongoing education and training programs for all personnel. Our proprietary training program, UnitedLex University, incorporates a four-week training program encompassing all of our services, applicable ethics and confidentiality rules, and compliance with both internal and client standards of practice. We subsequently apply a rigorous quality 12980 Foster Street Suite 390 Overland Park, Kansas 66213 +1.913.685.8900 Toll Free 888.385.3725 www.unitedlex.com

control process which incorporates a Design for Six-Sigma (DFSS) process methodology to ensure accuracy in all workflows and results. 8. What types of security systems to you have in place to ensure data integrity and compliance with confidentiality requirements of those who hire you? a. If there is a difference in security systems for work performed inside and work done outside the U.S., please explain. We maintain ISO 27001 certification and provide multiple layers of data and physical premise security to ensure data integrity and confidentiality. Premise and data access are restricted to UnitedLex employees only and those employees who work on specific client engagements. 9. What types of systems do you have in place to avoid conflicts of interest regarding those who hire you? Similar to a law firm, we maintain an extensive direct conflicts check for each matter. The conflicts checks apply to both our company and individual lawyers who are considered for work on a specific client matter. 10. Are you regulated? In what way and by whom? Are there competing regulations and regulators? Though we are not formally regulated as industry, we work within the Professional Rules of Conduct within a given U.S. jurisdiction and on a national level. We also adhere to all guidelines of ABA Formal Opinion 08-451 for work that is performed in the U.S. and abroad. As we work under the direct supervision of our clients - both law firms and corporate counsel - we also adhere to their rules of confidentiality and ethics. There are no known competing regulations and regulators. 12980 Foster Street Suite 390 Overland Park, Kansas 66213 +1.913.685.8900 Toll Free 888.385.3725 www.unitedlex.com

JILL E. FOX: ANSWERS IN CAPS BELOW A. Questions for lawyers and law firms who have outsourced legal work: 1. Under what circumstances have you outsourced legal work? I WAS AN ASSOCIATE WORKING FOR TWO SENIOR ATTORNEYS 2. What sort of work have you outsourced? WE OUTSOURCED MOTIONS MOSTLY, OCCASIONAL RESEARCH 3. When in the process of a representation have you outsourced work? PRETRIAL ONLY 4. Who initiated the idea of outsourcing, you (law firm or lawyer) or your client? In what context did this issue arise? THE FIRM 5. What conversations did you have with your clients about the process and work to be outsourced? When in the course of the representation did these conversations occur? Did you make a written record of those conversations? UP FRONT, WHEN WE DID THE FEE AGREEMENT. BECAUSE IT WAS A SMALL FIRM WE SOMETIMES HAD TO RELY ON CONTRACTORS AND THE CLIENTS KNEW THAT GOING IN 6. Can you please describe the process of identifying which outsourcing firm to use and what factors were important? For example, please explain: a. Was your decision regarding who to outsource to dependent upon the location of the outsourcer? If so, in what ways? PARTLY - WE USED SOMEONE NEARBY SO EVERYONE KNEW OR HAD MET HIM IN PERSON, AND PHYSICAL DOCUMENT/FILE SHARING WAS EASY b. How did you or your firm decide whether to outsource outside of the U.S. or within the U.S., or to a firm that has workers in multiple jurisdictions including the U.S.? WE WERE A 3-ATTORNEY FIRM WITH ONLY DOMESTIC CASES. THERE WOULD HAVE BEEN NO REASON TO OUTSOURCE OUTSIDE THE US. What issues, besides price, did you consider in this decision?

QUALITY OF WORK. HOW WELL HIS SKILLS FIT OUR NEEDS. FOR EXAMPLE, THE PARTNERS DID NOT USE HIM FOR ANY APPEARANCES BECAUSE IT WAS NOT HIS STRENGTH c. Where did you look to find guidance to assist you in this process? Who did you call? Is there an organization or quality indicia that you looked for? WORD OF MOUTH. THE LOCAL BAR ASSOCIATION HAD A GOOD REFERRAL PROGRAM SO IT WAS ACTUALLY A PLACE TO START. ONE OF THE PARTNERS TAUGHT AT A LAW SCHOOL AND OCCASIONALLY KNEW FORMER LAW STUDENTS WILLING TO CONTRACT d. Did you discuss the terms of the outsourcing contract/agreement with your client prior to its execution? Was your client a party to the contract/agreement? YES. I BELIEVE IT WAS COVERED IN OUR FIRM'S FEE AGREEMENT. I DON'T KNOW IF THE FIRM HAD A SEPARATE WRITTEN AGREEMENT WITH OUR CONTRACT ATTORNEYS. Can you share a contract with us? NA 7. What has your experience been when you have outsourced (inside or outside the U.S.)? VERY POSITIVE. FROM THE ASSOCIATE'S POINT OF VIEW OUR MAIN CONTRACT ATTORNEY WAS A GREAT RESOURCE FOR QUESTIONS AND LEARNING. HE DID NOT TAKE ANY COOL WORK AWAY FROM ME - IT WAS EITHER BEYOND MY EXPERIENCE AT THE TIME OR WE HAD PLENTY/TOO MUCH WORK 8. Has your experience with outsourcing (inside or outside the U.S.) raised any issues under the Rules of Professional Conduct and can you describe them? I BELIEVE IT WAS NECESSARY TO DISCLOSE AND GET CLIENT CONSENT FOR USE OF CONTRACT ATTORNEYS PER THE CALIFORNIA RULES ON FEE SPLITTING. FRED GOLDMAN: Regarding your request for comments on the ethical and professional regulatory implications of legal process outsourcing in a domestic and international context as an experienced international practitioner who has worked on matters where outsourcing has been involved let me point out the following. 1. The ABA has failed its members miserably and has not served the American legal profession the way it should. Everyone I know has the opinion that it is dominated by big law firm partners like Carol Lamm. I have never been helped by the ABA in my practice and in fact they hurt me with allowing foreign lawyers to work in the U.S. and by now permitting outsourcing to places like India. 2. No country in the world except the U.S. allows foreigners to practice law. Every single country

except the U.S. due to the ABA restricts the legal profession to their nationals due to national security reasons. In the U.S. this is why federal and supreme court clerks have to be U.S. citizens. There is nothing wrong with this and foreigners understand it because of how their countries work. Try working as a lawyer in places like Korea, Thailand, and Germany you will find yourself in jail in no time. Meanwhile their LL.B.'s come to the U.S. for a cheap, useless one year LL.M. degree and get admitted in our key states like New York and California. They openly brag about their ability to practice U.S. law. Since the pass rate in the U.S. bar is almost 100% after repeat testings, any foreigner can get a U.S. admission. 3. The U.S. government has failed for 30 years to get foreign countries to open up their legal markets so the ABA has to act to protect the profession and its members itself. Korea and Taiwan are perfect examples of this. 4. With soaring U.S. legal costs now $200k per year to go to law school, 50,000 new law graduates every year, and a shrinking job market, outsourcing is killing the U.S. legal profession. I can get an LL.B. degree in the U.K. online or as an undergraduate degree and come back and get admitted in New York and California. I can save three years, time and money, and be a dual U.S. lawyer and U.K. solicitor. Why the hell would I go through the U.S. system? The ABA says well, they can't compete with us...sure. I have worked with U.K. lawyers they are every bit as qualified and even better than American J.D.'s because they have three years experience and don't have to go to three years grad school. 5. While India is the main place for outsourcing, the Indian supreme court just closed the doors in a decision February 2010 to any foreigners trying to work in the Indian law field. Another example of the ABA with egg all over its face and saying stupid things like: "Well, we can show we are superior to them." "They will change over time. They are a developing country." "The more open economy will win in the end." 6. The U.K. has gotten smart and since 2008 has permanently suspended QLTT transfers of foreign lawyers. They actually listen to their own citizens. 7. Outsourcing centers have zero quality control and the "lawyers" working there are retarded. 8. The ABA and state bars insist that their own members be lawfully licensed, pay their dues, practice only their state law, and take CLE but none of this is required in outsourcing, where foreigners with no qualification can practice. I don't need to point this out since the ABA knows this obvious fact perfectly well. But the ABA plays dumb and sees new "offshore profit centers" for the Amlaw big firms they really represent. 9. Relatedly, foreigners who are not even admitted to U.S. bars are working all over the place on doc reviews and temp projects especially in New York but elsewhere. I have met hundreds of Nigerians and also Indians, Chinese, Turks, Russians, and Koreans on these temp projects and none are U.S. admitted. The lying agencies that also do outsourcing allow this and they use the Nigerians for black affirmative action quotas too.

The Nigerian Bar Association is based in New York. Openly flagrantly violating the bar rules in our face. Meanwhile the ABA hosting cocktail parties and talking about the benefits of internationalization.

RICHARD GRANAT: Marcia and Natalia: I write to you on behalf of the elawyering Task Force of the LPM Section of the ABA, of which I am Co-Chair. The comments that you requested about "legal process outsourcing" seem to us to be overly focused on large law firm outsourcing to companies in foreign countries. We think that just as important an issue is the new trend of solos and smaller law firms to outsource key law firm functions to an emerging group of application providers who provide what are known as " software as a Service" (SaaS). A SaaS provider stores a law firm's data "in the cloud" or on the Internet, and provides critical software applications to the law firm over the Internet in areas such as case management, document management, and content applications such as web-enabled document automation. SaaS legal providers exist in the United States, as well as India. The issue of the scope of the ethical rules that apply to the security of data that is housed on the Internet, is the same for legal out source companies operating in foreign countries,as it is for domestic companies supporting solos and small law firms in the United States. In both cases, law firm data is stored outside of the law firm on the Internet. Recently the North Carolina Ethics Committee decided to review the appropriateness of this kind of outsourcing, based upon the motion of a local legal technology vendor who is committed to the idea that law firm data must remain on a law firm's premises and stored on servers located within the law firm. The ambiguity in the existing rules of professional responsibility created an opportunity for the North Carolina Ethics Committee to review this issue de novo. Fortunately the Committee is issuing an opinion that provides a framework that enables these innovations without compromising North Carolina's ethical rules. However, if every state bar association ethical committee decides to review and evaluate this issue as a subject of first impression, in our opinion it will result in a deterrent to innovation and important productivity advances for solos and small law firms in the United States. To provide the 20/20 Ethics Commission some additional information on this important topic, I am sending as attachments to this email: 1. A Commentary on Cloud Computing prepared by Stephanie Kimbro on behalf of the elawyering Task Force of the ABA's Law Practice Management Section; 2. A comment that our elawyering Task Force submitted to the North Carolina Ethics Committee explaining the possible impact of a negative decision on solos and small law firms and access to justice issues; 3. And a letter sent to the NC Ethics Committee by a consortium of SaaS Vendors explaining how "cloud computing" works and its benefits. We would would be happy to answer additional questions about this topic and provide additional information on this issue for the Commission's benefit. We think that the concept of delivering software applications over the Internet to law firms is an important technological development that should be encouraged, rather than constrained by the Rules of Professional Responsibility. Moreover, the appropriateness of "outsourcing" cannot be fully understand without an understanding of how these Internet-based technologies work, their risks, and their benefits.

Thank you for the opportunity to submit comments to the Commission. Richard Granat [rich@granat.com] Co-Chair elawyering Task Force American Bar Association Law Practice Management Section

Cloud Computing in Law Practice Management Submitted by the ABA elawyering Task Force to the ABA Commission on Ethics 20/20 May 7, 2010 The form of cloud computing most often used in law practice management is software as a service (SaaS). With SaaS, the software application(s) used to create and maintain the practice on the Internet are secure, hosted systems. How is SaaS secure? The data is typically stored on a server that is housed in a data center. These facilities are typically million-dollar investments with highly regulated environments with fire suppression, backup power, redundancy, security, and 24x7 monitoring much greater security that most solos, small and even medium-sized law firms can afford. There are different levels of data centers labeled as Tier 1 through Tier 4 with different requirements at each Tier. The highest requirements and the best security are found on the Tier 4 level data centers. Only high level administrators have access to the server rooms of a data center. Junior level administrators are not allowed in the data center without a Senior level administrator escort. The facilities are typically nonpublic and unadvertised. The building itself may have redundant climate control, a redundant physical power plant, generator backup, and encrypted electronic door locks. This is the same level of security used by banks and government entities to secure their data. Again, the high level security offered by a SaaS provider may far exceed the security that a small or medium-sized law firm could provide for its law office data. Background Law office data if hosted in the cloud is not actually floating around in an unknown location. Unfortunately the term in the cloud tends to carry with it a sense of the unknown which is not an accurate description of the secure storage and transfer of electronic data. Accordingly, brief background on the terminology may be useful. The term cloud computing originates from the explanation that programmers used to describe complex networks and how the data was transferred from network to network. The space in which that data transferred from one law office s computer network was drawn in diagrams as a cloud to show that this information was now outside the control of the organization. This cloud is actually a known road and location that the data travels to and on and does not mean that the data is floating out in space unprotected and unobtainable. This was just easier for programmers to encapsulate in a cloud in the diagrams than to draw out the entire complex network system for each client. One should be careful not to lump together Application Service Providers (ASPs) of the late 90's with the current structure of most current companies providing SaaS. While in some ways the names, such as ASP and SaaS, may refer to the same concept, it is helpful to distinguish between what occurred in the 1990s and the goals of the current industry. The key difference is that SaaS means that software is being specifically written as a service designed to work cooperatively in a network environment. This means that when SaaS products are created they are designed more in line with the needs of mainframe servers and less in line with the goals of PC software. It is a subtle difference. However, this affects the way the

IT professionals and the industry think about their users, resources, and security among other concerns. The hardware and networks are becoming more affordable together in a way that opens up new opportunities for professionals to have more flexibility and options in terms of complexity and cost when choosing the technology that they are comfortable with to operate their practices. Some of the benefits of SaaS include the following: 1) data stored on the server is encrypted using a 128 bit or greater Advanced Encryption Standard (AES) quality cipher algorithm, 2) regular software updates and new features added without disturbing the workflow, 3) no in-house software installations, 4) access to data anywhere the attorney may securely access the Internet, 5) regular data backups, and 6) less expensive than paying for software, storage, and server hardware and having to run it internally with or without hiring an IT professional for the office. SaaS facilitates the delivery of legal services online by allowing the attorney to focus more on providing quality online legal services to the public without time-consuming in-house software installation, maintenance and support. In particular, it provides a unique opportunity for solos and small firms to take advantage of the cost-savings of the technology without having to hire an IT consultant to install rack units in the physical premises of a brick & mortar law office and set up all of the hardware to create the ability to deliver legal services online. Instead, attorneys are able to leverage SaaS to exploit its benefits while at the same time finding ways to mitigate the risks by creating in-house backups and storage of their law office data that do not require an IT professional to set up and maintain. For every argument against the use of SaaS, we could point to a similar argument against traditional install software. However, the legal professional is able to mitigate the risks of using this form of technology by taking the following actions: 1) Careful research and review of the SaaS vendor and its Service Level Agreement (SLA) and 2) Adhering to daily best practices for use of the technology. Several state bars have addressed the electronic third-party storage of law office data by their members and the North Carolina State Bar recently published a proposed formal ethics opinion on the use of cloud computing in law practice management. The NC Bar in this proposed opinion has taken the position of providing guidance to practitioners on the use of the technology rather than mandating requirements for implementation, including a list of questions for the attorney to ask when researching the SaaS provider. We believe this approach provides attorneys with a critical education regarding the technology and just as importantly does not discourage or hinder innovation in law practice management. Further resources: State Bar Opinions Related to Cloud Computing (excerpted from Delivering Legal Services Online, by Stephanie Kimbro, Esq., to be published ABA LPM Summer 2010) North Carolina Bar 2010 Proposed Formal Ethics Opinion 7 Subscribing to Software as a Service While Fulfilling the Duties of Confidentiality and Preservation of Client Property drafted April 15, 2010. Publication expected Summer 2010, State Bar Journal. Addressing Electronic Storage of Law Office Data

Arizona State Bar, Opinion 09-04: Confidentiality; Maintaining Client Files; Electronic Storage; Internet, issued 12/2009, last accessed February 22, 2010, http://www.myazbar.org/ethics/opinionview.cfm?id=704 See also, Arizona State Bar Opinions 05-04: Electronic Storage; Confidentiality, issued July 2005 and 07-02: Maintaining Client Files; Client's Papers and Documents; Electronic Storage, issued June 2007 Florida State Bar, Opinion 06-1, issued April 10, 2006, last accessed http://www.floridabar.org/tfb/tfbetopin.nsf/searchview/ethics,+opinion+06-1?opendocument Maine Ethics Opinion #194, Issued 12/11/2007, last accessed February 23, 2010, http://www.mebaroverseers.org/ethics%20opinions/opinion%20194.html Maine Ethics Opinion #183, Issued 1/28/2004, last accessed February 23, 2010, http://www.mebaroverseers.org/ethics%20opinions/opinion%20183.htm Massachusetts Bar Ethics Opinion 05-04, last accessed February 23, 2010, http://www.massbar.org/for-attorneys/publications/ethics-opinions/2000-2009/2005/opinion-05-04 Missouri, Advisory Committee of the Supreme Court of Missouri, Formal Opinion 127, Scanning Client Files, published May 19, 2009, last accessed February 24, 2010, http://www.mobar.org/formal/formal-127.doc Nevada State Bar Standing Committee on Ethics and Professional Responsibility Ethics Opinion No. 33, issued February 9, 2006, last accessed February 24, 2010, http://www.nvbar.org/ethics/opinion_33.pdf New Jersey, Advisory Committee on Professional Ethics Opinion 701, Electronic Storage and Access of Client Files, 184 N.J.L.J. 171, April 10, 2006, 15 N.J.L. 897, April 24, 2006, last accessed February 24, 2010, http://lawlibrary.rutgers.edu/ethics/acpe/acp701_1.html North Carolina 2008 Formal Ethics Opinion 5, July 18, 2008, Web-based Management of Client Records, last accessed February 24, 2010, http://www.ncbar.com/ethics/ethics.asp North Dakota State Bar Association Ethics Committee Opinion No. 99-03, June 21, 1999, last accessed February 24, 2010, http://www.sband.org/data/ethics/99-03.pdf Virginia State Bar Ethics Opinion No. ABA -398, issued October 27, 1995 (not specifically related to online storage, but the related issue of allowing a computer

maintenance company to access lawyer s files on the computer and duty to protect client s confidential information in those files.)

Introduction Cloud Computing, Solos and Small Law Firms, and Consumer Access to Affordable Legal Services Submission to the North Carolina Ethics Committee by The elawyering Task Force of the Law Practice Management Section American Bar Association A common definition of cloud computing is the storage of an organization s data on the Internet in a server provided by an independent data center that is a separate organization from the client organization. Law firms can now store client data, financial records, legal documents, and other information on the Internet, rather than house data in servers located on their premises, often at a cost which is much less than the cost of storing data internally. There is some controversy about this concept as it applies to the legal profession when the firm decides to store its date externally about whether it is ethically compliant, but a recent article in the this month s American Bar Association Journal, explores some of these concerns to rest and concludes that there is no specific ethical prohibition against cloud computing. [See generally: http://www.abajournal.com/magazine/article/get_your_head_in_the_cloud/ There is another aspect of cloud computing that is often over looked in bar association discussions about this issue and that aspect is the ways in which the cloud computing results in increased access to legal services and enables solos and small law firms to become more competitive. A law firm, for example, that wants to offer unbundled legal services online at a reduced fee can only do so by creating an online client portal that enables a client to purchases legal services over the Internet. A client portal is a secure web site space available to clients only by the use of a username and password. Within this space, the law firm can communicate with its clients, assemble and delivery legal documents, provide legal advice, provide more extensive consultations, pay their legal bills online, and provide digital applications that can inform clients about their legal problems. Because of the nature of this web architecture, this client portal exists on the Web and data is stored externally and not within the law firm. Data that is transmitted between the secure client portal and the law firm is always encrypted in the same way as data that flows between your bank or stock broker to your desktop. Like a person s personal online bank space, the client portal provides a secure personalized legal space within which the client can consume legal services. A directory of virtual law firms that offer unbundled legal services over the Internet can be found at http://www.mylawyer.com. It is mostly solos and small law firms that provide legal services to solve the legal problems of individuals and small business. Large law firms may have the resources to create portals for their corporate clients, and to store data on servers located within the firm, but solos and small law firm do not. A decision that would prohibit law firms in North Carolina from launching client portals and virtual law firms because data should not be stored be stored in the cloud would be a disaster for innovation, for solos and small law firms in particular, and for access to the legal system for the broader middle class. To fully understand this issue it is important to review some history and to have a better understanding of the evolution of legal technology. 1 P a g e

History: Online Legal Services and the Legal Profession In general, the American Bar Association (ABA) has urged the legal community to get online. In 2000, ABA President William G. Paul established the "elawyering Taskforce: Lawyers Serving Society through Technology" with the purpose of enabling lawyers to figure out how to deliver legal services online. At the time, President Paul observed that many industries were being transformed by the Internet and that consumers were conducting transactions online in such industries as the travel industry, the brokerage industry, the insurance industry, and the banking industry. Since then there has been an explosion in ecommerce of all kinds. Few industries have been untouched by the wide-spread expansion and accessibility of the Internet. President Paul observed that it was equally important for lawyers to offer their services online as well or become increasingly irrelevant as the Internet becomes more widely accessible. President Paul s vision was that lawyers would be able to use the power of the Internet to serve clients of moderate means who have been priced out of the legal market and law firms of all kinds would become more efficient and effective by adopting Internet-based information technologies. The elawyering Task Force that President Paul created survives to this day. The Task Force, of which I am Chair, is now housed within the Law Practice Management Section of the American Bar Association, which continues to promote and implement President Paul s vision. Annually and for the past two years, we have awarded the James Keane Award in Excellence in elawyering to a law firm that demonstrates exceptional innovation in the delivery of legal services on-line. Last year we awarded the Keane Award to Stephanie Kimbro s law firm, a North Carolina law firm, and this year the Award went to another law North Carolina law firm, Lee Rosen s law firm for his web site at http://www.rosen.com. Our group has also published guidelines for legal information Web sites that were approved by the ABA House of Delegates and we recently released a draft copy of recommended guidelines for law firms delivering online legal services, a copy of which is attached to this statement. In order to deliver online legal services, almost by definition, the law firm has to create a secure client portal which the client can access with a user name and password. Within this secure client portal, online legal services are delivered, such as online document assembly, clients can pay their legal bills, and the clients legal document can be stored online. All of these activities involve the storage of the client s confidential information online. Because this online legal technology is capital intensive to develop, very few solos and small law firms have developed a virtual law firm technology on their own. Instead, they have looked to an expanding group of software vendors known as SaaS vendors 1. SaaS stands for Software as a Service. software that is delivered over the Internet through the web browser. This means that the solo and small law firm is able, for a relatively inexpensive monthly fee, may subscribe to a set of complicated software technologies that are provided over the Internet from a vendor who hosts both the software application and the firm s data on a server that is not within the firm s physical facility. It is only in this way that these software applications can be delivered to solos and small law firms economically and at a price they can afford. There are important strategic advantages to enabling law firms to adopt an online legal service strategy. Here are a few of them: Realistically, this is the only way that these complex software applications can be delivered to solos and small law firms economically and at a price they can afford. Complicated software applications, normally beyond the capability of a small law firm to develop or use, can be made available to class of law firms where it would be cost prohibitive if each law firm has to develop the application by itself. This software, such as web-enabled 1 Disclosure: The Chair of the elawyering Task Force is President of DirectLaw, Inc., a provider of a virtual law firm platform and MyLawyer.com, an online Directory of Virtual Law Firms offering unbundled legal services. Stephanie Kimbro, the founder of Virtual Law Office Technology, Inc., is also a member of the elawyering Committee, LPM, ABA. 2 P a g e

document automation, enables the law firm to increase its productivity, increase its margins, and keep prices low and reasonable. Law firms can more effectively compete against non-law firm legal service providers such as LegalZoom, which use the same cloud technology to compete against lawyers. Nonlawyer legal service provides like LegalZoom have been eating away at the market share or solos and small law firms for years using the same internet-based technology that lawyers fear might compromise the security and integrity of a law firm s operations. Our research shows that a younger generation of clients want to do business with lawyers over the Internet. If solos and small law firms don t respond to this demographic on their terms, they will forever lose this client basis to alternative providers. Like Internet banking, travel and stock brokerage, online legal services are convenient and fast and add to the quality of the typical client experience. Software applications that are offered as a software as a service, require that no hardware or software be installed and updates can be made in days rather than months. New features can be rolled out to all of the law firms who subscriber very quickly without waiting for annual releases. In our evolving economy, where there are incentives to go green, it is not possible to implement a go green strategy without storing data in the cloud. Virtual law firms, wireless platforms, virtual law offices, lawyers visiting clients in their homes or places of business, all require a cloud-based data strategy. Software as a Service levels the playing field between solos and small law firm and the LegalZooms of the Internet world, enabling them to remain competitive in a changing legal landscape. The market for consumer legal solutions is changing in fundamental ways, primarily because of the ascendancy of the Internet. We have estimated that there is a huge latent market for legal service, approximately $20 billion annually. During the last decade we have seen the emergence of a new category of non-lawyer, legal information Web sites that offer very low-cost solutions directly to the consumer. The legal information industry of self-help books/forms has gone on-line. It has the solo and small law firm segment of the legal profession squarely in its sights. A legal information solution can often presume to substitute for the professional service of an attorney. This is the new reality that the legal profession now faces. Unconstrained by the ethical rules that govern the legal profession and by debates about whether it is acceptable to store data and client information online, during the past 10 years, literally hundreds of legal information Websites have emerged offering services in the area of wills, divorce, adoption, bankruptcy, business incorporations, child support enforcement, living trust creation, debt counseling, immigration, trademark search, copyright registration, patent registration, and landlord-tenant law. These sites offer Web-enabled legal forms, legal information services, advisory systems, law guides, FAQ guides, and other tools for legal problem resolution, short of delivering what could be called full legal services. These new alternatives are capturing or acquiring clients from both the latent market for legal services and from existing law firms. The most successful of these companies, such as LegalZoom, provide a client portal for the customers. Data is stored securely online, including credit card numbers and other sensitive data. Software as a Service offered in the Cloud is a major step towards innovation in the delivery of legal services in terms of increasing law firm productivity enabling law firms to serve a broader group of consumers at prices that these consumer s can afford. This becomes, in fact, an access to justice issue for many individuals and small business owners. 3 P a g e

There has been some discussion distinguishing between services that point outward towards the consumer, and cloud based services that are focused on the internal operations of law firms are which are limited to timekeeping and billing, case management, and other internal functions. This distinction simply makes no sense. Both kinds of software as a service involve the storage of client confidential information in the Cloud. A recent article in TechnoLawyer, by Ross Kodner, a consultant to solo and small law firms, sums up the argument for Cloud Computing : The reality, in the absence of inevitable ethical opinions and updated rules of professional responsibility, is that the ethics issues are largely a red herring. There is a long tradition of permitting third party data access and control to confidential client information. The obvious example is using third parties to retrieve and maintain archived client files, or to process electronic discovery files. Even online data backup, with multiple state bar associations having vetted and endorsed various services, has become informally accepted. So let's just all get over it SaaS makes sense. The above issues will be resolved, likely sooner rather than later. If the world's largest corporations can place their trust in wildly successful and field-proven SaaS products such as Salesforce.com, legal SaaS systems will become just as trustworthy. Outside of the small firm sphere, we already see very successful examples of SaaS legal applications, including mission critical systems such as financial management products. Rippe & Kingston's LMS+ is a sound example. Moreover, there are well known examples of companies that store mission critical information for other companies in the cloud. Perhaps the most well-known is www.salesforce.com, which has brought modern sales and marketing technology to the smallest business enterprise. Another example, reported in this month s Fortune Magazine, [ April 12, 2010, P. 26, ] is a company called Workday that stores a company s human resources information online. Most recently Sony Pictures and Lextronics moved their human resources function online by subscribing to the Workday system Workday contends that it can securely lower customers techology costs (few servers to purchase and maintain) and improve efficiency (software upgrades take days, not months) by delivering complex applications and information over the Net. The information stored by Workday is mission critical and confidential information that contains the files of hundreds of thousands of employees. Oracle and SAP are also developing plans to develop software as a service models similar to Workdays. The trend towards cloud computing is accelerating as organizations realize that this is lower cost method of accessing the benefits of enterprise wide computing, and that certain kinds of innovations will only be available to the smallest or organizations by adopting this approach. Conclusion In our opinion, the Internet as a platform for the delivery of legal services has the power to significantly enhance the productivity of law firms. Seth Godin, a leading commentator on the impact of the Internet on society and business, calls it the WordPerfect Axiom. What he says applies equally to the impact of the Internet on the legal profession. When the platform changes, the leaders change. WordPerfect had a virtual monopoly on word processing in big firms that used DOS. Then Windows arrived and the folks at WordPerfect didn t feel the need to hurry in porting themselves to the new 4 P a g e

platform. They had achieved lock-in after all, and why support Microsoft. In less than a year, they were toast. When the game machine platform of choice switches from Sony to xbox to Nintendo, etc., the list of best selling games change and new companies become dominant. When the platform for music shifted from record stores to itunes, the power shifted too, and many labels were crushed. Again and again the same rules apply. In fact, they always do. When the platform changes, the deck gets shuffled. Insiders become outsiders and new opportunities abound. Jordon Furlong, the former editor-in-chief of National, the Journal of the Canadian Bar Association, elaborates on the idea that as the Internet becomes a new platform for the delivery of legal services, its impact will be seen as revolutionary: It s a revolution, and like all revolutions, the benefits will lag behind the costs. It s going to be messy and even ugly for awhile platform shifts are neither neat nor bloodless. Think back to the hassles we all went through with Word-to-WordPerfect conversions while the two programs battled it out. Remember the upheaval in the auto industry as electricity began to shove oil off its fuel platform and the damage that caused to gigantic automakers saddled with suddenly unsellable gas-guzzlers. Think of the carnage in the record and newspaper industries as the internet took away their platforms and rewrote the rules of their games. It may take longer, it may not be as brutal, and it may not generate as much attention in the wider world, but the legal services marketplace is starting to go through something very similar. And there will be casualties. When the platform changes, insiders replace outsiders and opportunities abound. Get ready. See: http://www.law21.ca/2010/03/17/the-platform-is-changing/ Minimum standards for SaaS Providers should result in the protections that law firms need to be able to operate on the Internet without fear of violating current ethical standards. Standard setting by SaaS vendors, malpractice insurers, and bar associations can provide assurance that the costs involved in shifting to a new platform are minimized, while the benefits of cloud computing are realized. A decision that would prohibit law firms in North Carolina from launching client portals virtual law firms, and using web-based case management and practice management tools because data should not be stored in the cloud would be a disaster for innovation, for solos and small law firms in particular, and for access to the legal system for the broader middle class. 5 P a g e

elawyering Task Force Law Practice Management Section American Bar Association Suggested Minimum Requirements for Law Firms Delivering Legal Services Online. Background On February 10, 2003, the American Bar Association House of Delegates approved a set of best practices guidelines for legal information web sites that were developed jointly by the Elawyering Task Force, ABA Law Practice Management Section and ABA Standing Committee On the Delivery of Legal Services. The purpose of these guidelines was to improve the quality and accuracy of legal information published both by law firm web sites and non-law firm legal information web sites. These guidelines can be found here. Since then, innovative law firms have sought to deliver legal services directly to clients through their web sites or to set up what some call - virtual law offices. Unlike a simple law firm site that may have just a description of a firm s practice, biographical information about the partners and employees of the firm, and some legal information, a virtual law firm is characterized by access by the firm s clients to a password protected and secure web space where both the attorney and client may interact and legal services consumed by the client. Some of these legal tasks may include the delivery of online legal advice, legal review of documents that have been received by the client from another party, discussions between the lawyer and the client, and the creation, assembly, and review of legal documents and forms. Examples of law firms that are delivering legal services online include: http://illionisdivorce.com; http://www.kimbrolaw.com; and http://www.mdfamilylawyer.com. As more law firms become interested in adding a virtual dimension to their practice, there is increasing interest in making sure that the practice meets requirements for the delivery of legal services on-line directly to clients. These minimum requirements are designed to help lawyers resolve these questions so that their virtual practices comply with the applicable professional rules of conduct. Since every state develops and enforces its own rules for the legal profession, these requirements will be advisory only. The following draft requirements provide a framework for further discussion and are likely to evolve over time as more law firms move their practices online and encounter novel and unique situations that are not anticipated by rules that were aimed at law firms purely operating in the physical world. Suggested Requirements Law firms that wish to deliver legal services on-line should meet the following requirements: 1. Web Site Architecture: The basic structure of a law firm web site that offers legal services online requires a secure client web space that is accessible only with a user name and secure password. Without such a mechanism it is difficult or impossible to comply with the rules of professional conduct that deal with UPL, client confidentiality, establishing the lawyer/client relationship, and conflict of interest issues.. a. Ethics Issues: The Rules of Professional Responsibility are not revoked just because you are delivering legal services online and through the law firm s web site. Mechanisms such as the following must be put in place: b. Conflicts of Interest still must be checked. c. The law firm must not violate UPL rules and must serve only clients who are residents of the state where the firm is authorized to practice, or clients who have a matter within the state where the law firm is authorized to practice. A procedure must be in place to verify that the law firm is authorized to provide service to the client. 1 Suggested Minimum Requirements for Law Firms Delivering Legal Services Online. elawyering Task Force Law Practice Management Section American Bar Association October 15, 2009

elawyering Task Force Law Practice Management Section American Bar Association d. If the state has residency requirements, then the attorney will have to comply with those by adding a statement to their site that informs the public that there is no physical law office in that state or that the attorney resides in a state other than the one in which he or she is offering services. 2. A disclaimer should be published on the site that makes UPL limitations clear. 3. A Terms and Conditions Statement should be published on the public section of the site that describes precisely limitations on services, the requirements to establish a lawyer-client relationship, and disclaimers related to the creation of the lawyer-client relationship. It should make clear that any legal information that appears on the web site is not legal advice, and that a lawyer/client relationship must be established before any legal services are provided. 4. The client must accept and agree to a retainer agreement outlining the scope of legal services at the time they become a client. The acceptance of the retainer agreement establishes the lawyer/client relationship. The attorney should not provide legal services until the lawyer/client relationship is established. a. If the jurisdiction in which the law firm operates has client-identification rules, these rules must be complied with even though the client is an on-line client. b. Retainer agreements may be handled in different formats online whether that is through a traditional click-wrap agreement, sending a traditional engagement letter for signature and then uploading it into the client s online file, using a digital signature service on a letter, or creating an online HTML form that requires the client to click to accept each provision of an engagement letter that is then stored in their file. Marketing Rules: The law firm web site must comply with the marketing rules incorporated into the state s Rules of Professional Responsibility that apply to the law firm. This usually requires a disclaimer that the public section of the web site is a form of advertising. Usually a disclaimer must appear in the footer which indicates that the law firm s public web site (the front-end ) is a form of advertising and information contained herein should not be relied on for legal advice. Note: A best practice would be adherence to the ABA s Guidelines for Legal Information web sites. 5. On-Line Payment of Legal Fees: Payment of legal fees on-line by credit card will have to comply with the state rules that govern attorney trust accounts. a. If the method of collecting online payments is such that the attorney is collecting and storing credit card information on their virtual law practice, it must comply with federal regulations, such as PCI Compliance. 6. Protecting Client Confidences: a. All data that is transferred online between the law firm s web site and the server must be encrypted. b. Third-party hosting providers should have policies and procedures in place for security breaches, data theft, privacy and other concerns. c. The contract with the hosting provider should make clear under what circumstances the provider s staff has access to client files and also make clear that if the vendor s staff is accessing client data for technical reasons, they are functioning as agents of the law firm as if they were the law firm s internal staff. 2 Suggested Minimum Requirements for Law Firms Delivering Legal Services Online. elawyering Task Force Law Practice Management Section American Bar Association October 15, 2009

elawyering Task Force Law Practice Management Section American Bar Association : d. A procedure should be in place that guarantees the security of the firm s client data, provides for redundant back-ups, and offers a procedure for exporting the data on behalf of the law firm at the request of the law firm. [There is another set of issues that a law firm must consider when selecting a hosting provider for the provision of a Software as a Service This subject is beyond the scope of this discussion of minimum requirements.] : 7. The law firm should consider securing various certifications that confirm the security and the privacy policy of the web sites, such as the Hacker safe NORTON Safe seal and the Truste Certificate. These are examples. There are other alternatives which vary in cost. This would provide notice to the consumer that the law the secure portion of the law firm s web site complies with industry standards for security. We are confident that as law firms respond to the needs of clients who want to deal with attorneys on-line, they will adapt to delivering services in ways that are consistent with the legal profession core professional values. Reactions to the draft requirements outlined above would be most welcome. We also welcome participation in the elawyering task force. If you are an ABA member, you can sign up for our email discussion list by visiting http://www.abanet.org/abanet/common/email/listserv/listcommands.cfm?parm=subscribe&listgrou p=lpm-elaw. 3 Suggested Minimum Requirements for Law Firms Delivering Legal Services Online. elawyering Task Force Law Practice Management Section American Bar Association October 15, 2009

April 9, 2010 Alice Neece Mine Assistant Executive Director North Carolina Bar Association 208 Fayetteville Street Mall PO Box 25908 Raleigh, North Carolina 27611-5908 RE: Ethics Inquiry on Cloud Computing Dear Ms. Mine, Thank-you for considering the comments and feedback of the legal community in your recommendations to the Ethics Committee concerning the matter of Cloud computing. As representatives of the legal cloud computing industry, we support the committee s efforts to provide clarity to its membership on the ethical implications of technologies available via the internet, and appreciate the opportunity to be a part of this important debate. We firmly believe that many Cloud-based solutions are uniquely able to provide a secure, convenient, and cost-effective method for law firms to manage and store client data, and hope our comments will prove valuable in helping to establish the technical standards that constitute reasonable care when employing Cloud-based solutions. In this letter we propose a minimal set of standards by which any legal-oriented cloud computing solution can be evaluated. These minimal standards collectively form a baseline for the secure storage and transmission of confidential client data across a variety of professional industries that employ cloud computing technology. Related ethics opinions, such as 2008 FEO5, RPC 133, and RPC 215, refer to Rule 1.6 of the Rules of Professional Conduct and the lawyer s duty to protect and preserve the confidences of a client and to ensure any third parties entrusted with confidential data take reasonable measures to minimize the risk that confidential information might be disclosed. The measures outlined below provide a foundation of security that ensure a lawyer utilizing cloud computing is compliant with Rule 1.6. Secure Data Centers One of the most important layers of security for cloud computing providers is the physical security of the data centers that store client data. The following measures help ensure physical access to confidential data is restricted to those with authorized access: 24-7 Security monitoring at Data Centers where servers are located Access to physical machines is limited only to team responsible for servers Machines accessible only through security checkpoints and restricted access areas Datacenters must comply with regular SAS70 Type II (AICPA) Audits Network Security

In addition to being secured against physical compromise, data centers must be adequately protected against network-based threats. The following measures help ensure only approved protocols and connections can be used to access confidential data: Perimeter firewalls block unauthorized connections and protocols Regular third-party audits of perimeter firewall security Software Security Ensuring a data center s software is up-to-date helps protect against known security holes. The following measures help ensure a data center s software is up-to-date: Regular, independent audits of software security Security patches and software updates applied within 30 days of being published Data Transmission Security The previous safeguards help ensure data is securely stored at the data center, but the data must somehow be securely transmitted to the end-user over a public network such as the Internet. Secure Sockets Layer (SSL) encryption is a proven technology used by the military, banks, online merchants, and Fortune 500 companies to securely transmit confidential information over the Internet. The following measures help ensure communications between the cloud computing provider and the end-user remain confidential: Communications with server must use SSL Full encryption of communication over minimum 128 bit encryption Backups and Redundancy Cloud computing providers are looked to not only provide outsourced hosting of data, but to implement appropriate procedures to ensure all data is backed up and appropriate redundant failovers are in place. The following measures help ensure a cloud computing provider is taking appropriate steps to back up and safeguard their client s data: Multiple intra-day backups At least one geographically redundant (i.e. stored at a geographically distinct location from primary backups) Data center must be served by multiple Internet providers and power grids Minimum 99.9% availability guarantee in Service Level Agreement Data center must have at least one week's worth of backup capacity Confidentiality and Privacy Cloud computing providers should provide assurances through a Terms of Service or Privacy Policy that all data stored with the provider will be kept confidential, and not used for any purposes other than serving the end user their data: Guarantees that no personally identifiable information will be released to third parties Guarantees that account data will only be accessed with specific authorization of the account-holder to resolve a customer issue

Privacy policy clearly states all data stored with cloud provider is property of the customer, and not to be used for any purpose other than serving the customer their data Implement, on-demand, a Non-Disclosure Agreement, whether upon request or integrated into Subscriber Agreements or TOS. Data Portability As with all software systems, users of cloud computing providers should be free to export their data for the purposes of migrating to an alternate cloud computing provider, a desktop software product, or to retain separate on-premise backups of data stored with the cloud provider. Storing an on-premise backup of data stored with a cloud computing provider also provides strong protection against scenarios such as the cloud computing provider going out of business or becoming unavailable for any reason: All customer data will be made available for download, on demand, in a non-proprietary open format such as CSV Taken as a whole, these security measures represent a level of data protections that all but the largest of firms would find cost-prohibitive to implement, but can be made available to smalland mid-sized firms due to the economies of scale the cloud computing model affords. The measures above provide a baseline of security and privacy guarantees that allow lawyers to store confidential client data in the cloud in good conscience, and in accordance with our understanding of Rule 1.6 of the Rules of Professional Conduct. Please accept our sincere thanks for your consideration of the aforementioned recommendations. We are available for further comment or clarification at your convenience the via the contact details below. Sincerely, Jack Newton, Clio Richard Granat, DirectLaw Larry Port, RocketMatter Stephanie Kimbro, VLOTech

EZRA A. JOHNSON: Dear Ms. Vera, By allowing attorney jobs to be shipped overseas, the ABA has caused profound harm to the legal profession in this country. It is illogical that a lawyer in India, for example, who has not attended an ABA accredited law school in the United States or taken the Bar Exam or the MPRE, can practice law in New York, Texas or California more easily than lawyers from other states. There are legions of unemployed attorneys out there that should be doing this work, not third party nationals. When will you help them? Thank you! Sincerely, Ezra A. Johnson JAMES LAI: Dear Ms. Vera: Thank you for receiving my comments on legal process outsourcing as part of the Ethics 20/20 project. As an in-house counsel, I see that you classify me as a client who has made the decision to outsource legal work. As such, I will answer your questions for clients who have outsourced legal work and also provide some of my own commentary. 1. Who made the initial decision that legal work should be outsourced and if the client is an organization, who in the organization did so (e.g., an officer of the organization, general counsel or a procurement employee)? In general, the decision to outsource legal work comes from my company s senior management with my advice. 2. Was the decision to outsource made in the context of legal work for a particular transaction or dispute, or as a general matter for all work that falls into a certain category, whether or not it has already arisen and is identified? My company outsources legal work on both a transactional basis, such as when dealing with litigation, and on a categorical basis, such as when dealing with international corporate matters, foreign securities issues, etc. 3. Did you involve your lawyer or law firm in your decision to outsource, and in helping to select outsourcing firms? Please describe the nature of the lawyer or law firm s involvement. We direct all outsourcing of legal processes. 4. Can you please describe the process of identifying which outsourcing firm to use and what factors were important? For example, please explain:

The most important factor that goes into an outsourcing arrangement is competency of the consultant. Based on news disclosing failure of data privacy and security policies by major business process outsourcing providers in India, resulting in governmental investigations and a great deal of potential exposure for the clients. As such, I have grave doubts about the ability of any overseas provider to comply with contractual and legal rules governing privacy and data protection. Regardless of the ABA s ethics opinion stating generally that it is permissible to outsource legal work overseas, I do not believe that outsourcing providers offer sufficient control to clients that would enable me to ensure that the outsourcing provider is capable of fulfilling all ethical standards. In order to permit outsourcing of a legal process provider, we would need to confirm that the outsourcer would be performing services in a US jurisdiction and that its staff were subject to US ethics laws and enforcement. James Lai Corporate Counsel JOHN LEVIN: I am the retired Assistant General Counsel of GATX Corporation and was responsible (with others) for the retention of outside counsel. Perhaps the following answers might be useful. B. Questions for clients who have outsourced legal work: 1. Who made the initial decision that legal work should be outsourced and if the client is an organization, who in the organization did so (e.g., an officer of the organization, general counsel or a procurement employee)? The general counsel of the division responsible for the matter. Rarely a more senior officer of the company. 2. Was the decision to outsource made in the context of legal work for a particular transaction or dispute, or as a general matter for all work that falls into a certain category, whether or not it has already arisen and is identified? All litigation was referred to trial counsel in the jurisdiction in which the matter was filed. Certain specialties, e.g. ERISA were regularly outsourced. Otherwise, it was determined on a case by case basis dependent on the work load of the law department or the availability of a particular in-house lawyer. 3. Did you involve your lawyer or law firm in your decision to outsource, and in helping to select outsourcing firms? Please describe the nature of the lawyer or law firm s involvement. The regular outside firms retained by the company were rarely consulted in referring other matter to other counsel. On occasion, we looked to recommendations from regular outside counsel. 4. Can you please describe the process of identifying which outsourcing firm to use and what factors were important? For example, please explain: a. Was your decision regarding who to outsource to dependent upon the location of the outsourcer? If so, in what ways? Trial counsel were almost always picked based upon the location of the trial court. Often if a transaction was local to a particular location, we would look for counsel in that location. Matters relating to the Federal government were often referred to D.C. firms. General matters were usually referred to regular outside counsel located near the appropriate corporate headquarters. b. How did you or your firm decide whether to outsource outside of the U.S. or within the U.S., or to a firm that has workers in multiple jurisdictions including the U.S.? What issues, besides price, did you consider in this decision? Foreign counsel were used in matters relating to the foreign jurisdiction generally not otherwise.

c. Where did you look to find guidance to assist you in this process? Who did you call? Is there an organization or quality indicia that you looked for? Due to the age and size of the organization, we almost always had contacts in the foreign jurisdiction. If not, we would look for recommendations from lawyers or organizations we knew who had knowledge of the jurisdiction. d. Did you discuss the terms of the outsourcing contract/agreement with your lawyer or law firm prior to its execution? Was your lawyer or law firm a party to the contract/agreement? Can you share a contract with us. The law department decided the terms of retention of all lawyers foreign and domestic. The agreements differed from jurisdiction to jurisdiction. 5. What sort of agreements do you enter into with your outside lawyer(s) or law firm(s), if any, with regard to responsibility for oversight of outsourced work and related liability? As a matter of principle, the law department had oversight of outsourced work. There was rarely any limitation of the retained firm s liability for malpractice. 6. What, if anything, changes when you decide to outsource to a firm/organization based overseas, with regard to the decision to outsource, vetting and selecting the outsourcer and the relationship with the outside law firm? None. If the firm was retained by lawyers at a foreign corporate office, that office would have oversight. 7. What has your experience been when you have outsourced or your lawyer or law firm has done so on a matter for which they represent you (inside or outside the U.S.)? The experience has been varied. If the work product of the firm was not satisfactory, we would change firms and/or not use that firm again. More generally, the company held its outside counsel to high ethical standards. If we were uncomfortable with a firm or a lawyer, we would not use them.

ELLIOTT MALONE: Legal Process Outsourcing (LPO): Key Considerations Outsourcing in general has become very popular due to its myriad of benefits, which chiefly include cost savings, delegation efficiency, and around-the-clock production, among other things. Before a company makes the decision to outsource a particular function or service, it is important for it to carefully evaluate a number of aspects, especially where Legal Process Outsourcing (LPO) is concerned. This article will provide a brief history of LPO and discuss related aspects that should be considered before the decision to engage in LPO is made. In particular, this article will use India as an example of an outsourcing destination. Finally, this article will provide an overview of one pending litigation that has emerged as a result of LPO. What is LPO? Over the past several years some in the legal field have joined the ranks of other industries that have been engaging in offshore outsourcing for quite some time. In part, the ability to engage in LPO is due to technological advances because it has become possible to conduct work remotely and quickly transfer large files electronically. 1 Initially, IP management services were offered by LPO companies, which, generally speaking, are companies staffed by local attorneys and provide an array of services. Beginning in 2005, services such as paralegal work, docketing support, proof-reading, and similar legal functions began being offered by LPO companies. 2 Currently, a wider range of legal services can be outsourced, including, among others, litigation support, e-discovery matters, document review, deposition summaries, and legal research. 3 The worldwide market for legal services in 2005 was estimated to be around $250 billion. 4 About two-thirds, or $170 billion is within the U.S. 5 Forrester Research, an 1 See Mark Ross, Legal Process Outsourcing (LPO): 2007 And Beyond, IMMIGRATION DAILY (Jan. 1, 2008), available at http://www.ilw.com/articles/2008,0125-ross.shtm. 2 See The Metropolitan Corporate Counsel, Legal Process Outsourcing: A service in Full Maturity [herinafter LPO: Maturity], THE METROPOLITAN CORPORATE COUNSEL (Nov. 2007) (The Editor interviews Chris Veator, Executive Vice President and Bhaskar Bagchi, Country Head - India, Computer Patent Annuities Limited (CPA)), available at http://www.metrocorpcounsel.com/current.php?arttype=view&artmonth=november&artyear=2007&entryno=745 5. 3 Id. 4 See Associated Chambers of Commerce and Industry of India Website, http://www.assocham.org/prels/shownews.php?id=537 (last visited Mar. 13, 2008). 5 The Economic Times, Legal outsourcing to India a reality: NYLJ report, THE ECON. TIMES (Dec. 15, 2005), available at http://economictimes.indiatimes.com/articleshow/1345418.cms (citing Forrester Research s prediction that by 2015, the legal outsourcing market in India could reach 79,000 jobs and $4 billion). NY #1730479 v2

independent technology and market research company, estimated that nearly 80,000 U.S. legal jobs are expected to move overseas by 2015, particularly to India. 6 As for the LPO industry, in particular, its growth has been substantial. Revenues from LPO services are forecasted to grow from $146 million in 2006 to $640 million by the end of 2010. 7 In 2005, Forrester Research predicted that the value of LPO work to India could rise from $80 million to $4 billion by 2015. 8 As of October 2006, there were more than 60 offshore companies providing LPO services as compared to only 20 in 2005. 9 This difference amounts to an increase of over 300% in less than two years. Today, there are well over 100 companies providing LPO services, 10 with new ones seemingly being planned or opened regularly. 11 The LPO industry in India is estimated to employ 7,500 people and this is expected to rise to 32,000 people by 2010. 12 Outsourcing Benefits Taking advantage of the labor arbitrage, which has been the driving force behind outsourcing in various industries for many years, is now also a prominent benefit for LPO. 13 This arbitrage is significant in the legal industry because hourly rates of foreign LPO companies, when compared to those in the U.S., are significantly less. For example, rates for Indian LPO companies are about 80 to 90 percent lower than what U.S. firms charge. 14 This is possible because a graduate from a top law school in India can expect to earn about $6,000 to $7,000 a year, 15 whereas a graduate from a prestigious U.S. law school can expect to earn significantly more than that in a month if working in the private sector. 16 6 See CYRUS D. MEHTA, EMERGING ISSUES IN DUAL REPRESENTATION AND UNAUTHORIZED PRACTICE OF LAW (2007). 7 The Economic Times, Legal outsourcing to India a reality: NYLJ report, THE ECON. TIMES (Dec. 15, 2005), available at http://economictimes.indiatimes.com/articleshow/1345418.cms (citing Forrester Research s prediction that by 2015, the legal outsourcing market in India could reach 79,000 jobs and $4 billion). 8 The Economic Times, Legal outsourcing to India a reality: NYLJ report, THE ECON. TIMES (Dec. 15, 2005), available at http://economictimes.indiatimes.com/articleshow/1345418.cms (citing Forrester Research s prediction that by 2015, the legal outsourcing market in India could reach 79,000 jobs and $4 billion). 9 Vesna Jaksic, Guidelines for Outsourcing Grow, The National Law Journal (May 3, 2007), available at http://www.law.com/jsp/llf/pubarticlellf.jsp?id=1178096674507. 10 Mark Ross, Legal Process Outsourcing (LPO): 2007 And Beyond, Immigration Daily (Jan. 25, 2008), available at http://www.ilw.com/articles/2008,0125-ross.shtm. 11 Legal Process Outsourcing Blog, http://legallyours.blogspot.com/2007/03/new-lpo-everyday_08.html#links (last visited Mar. 16, 2008). 12 See Mark Ross, Legal Process Outsourcing (LPO): 2007 And Beyond, IMMIGRATION DAILY (Jan. 1, 2008), available at http://www.ilw.com/articles/2008,0125-ross.shtm. 13 Id. 14 Arin Greenwood, Manhattan Work at Mumbai Prices: Inside India's hottest legal outsourcing team, ABA JOURNAL (Oct. 2007), available at http://www.abajournal.com/magazine/manhattan_work_at_mumbai_prices. 15 Id.; see also Nathan Carlisle, Rumor Has NY BigLaw Leader Poised to Raise First-Year Salaries Even Higher, New York Lawyer (Oct. 1, 2007) stating that starting salaries for first-years at most of the 200 largest firms nationwide remain bunched at $160,000. 16 Arin Greenwood, Manhattan Work at Mumbai Prices: Inside India's hottest legal outsourcing team, ABA JOURNAL (Oct. 2007), available at http://www.abajournal.com/magazine/manhattan_work_at_mumbai_prices. 2 NY #1730479 v2

Other benefits to outsourcing clients include the time difference between the U.S. and India. When U.S. workers end their working day, Indian works begin theirs. This allows for around-the-clock production. Also, delegating work can allow for higher efficiency and ability to concentrate on other matters. Key Considerations Although there are many apparent benefits to outsourcing, there are known disadvantages as well, including language barriers, cultural differences, work quality, supervision, reduction of U.S. jobs, negative effects on the U.S. economy, and a potential threat to national security. In general, there are many aspects that should be considered before outsourcing, but when LPO is concerned, those aspects may become more significant due ethical requirements, the condition of India s legal system, and the possibility of irreparable harm. Importance of Contracts: Some concerns related to LPO can be overcome by a good contract which includes, among other things, clauses for remedies, arbitration, and choice of forum. 17 A strong contract can offer certain protection in case something goes wrong, but the costs associated with the formation of a contract should be considered. Another aspect to consider is that damages may be irreparable, especially with regards to legal services as legal remedies can result loss of liberty. Lastly, the enforcement of a contract may require dealing with the Indian legal system, but as mentioned below it may be difficult to work within that system. Indian Legal System: Although it is not uncommon for Indian judges to cite U.S. case law, 18 Indian courts suffer from serious backlogs of cases, many of which may be pending over a decade. 19 The Indian Supreme Court alone has about twenty thousand pending cases. 20 The total cases pending in all of the state High Courts is roughly three million. 21 Nationwide there are twenty-four million cases pending in the lower courts. 22 There are many reasons for this backlog, but the most prominent ones are lack of funding, insufficient number of courts, and not enough judges. 23 Further, in civil cases, losing parties have the ability to delay cases for a long 17 There is an entire book that has been dedicated to the subject of outsourcing contracts: BHARAT VAGADIA, OUTSOURCING TO INDIA A LEGAL HANDBOOK (2007). 18 see, e.g., Jayanth K. Krishnan, The Rights of the New Untouchables: A Constitutional Analysis of HIV Jurisprudence in India, 25 HUM. RTS. Q. 791, 804 (2003). 19 Jayanth K. Krishnan, Outsourcing and the Globalizing Legal Profession, 48 WILLIAM & MARY LAW REV. 2222 (2006-2007) ( [a]ccording to the Ministry of Law and Justice, 650,000 casees have been pending in the High Courts for more than 10 years, while 630,000 have been pending between 5 and 10 years ). 20 See Jason Overdorf, Unclogging the Courts, NEWSWEEK (Atlantic Edition) (Jul. 18, 2005) at 36. 21 Id. 22 See Amir Efrati, Job Market Wanes for U.S. Lawyers Growth of Legal Sector Lags Broader Economy; Law Schools Proliferate, THE WALL STREET JOURNAL (Spet. 24, 2007). 23 Jayanth K. Krishnan, Outsourcing and the Globalizing Legal Profession, 48 WILLIAM & MARY LAW REV. 2222 (2006-2007) ( [a]ccording to the Ministry of Law and Justice, 650,000 casees have been pending in the High Courts for more than 10 years, while 630,000 have been pending between 5 and 10 years ). 3 NY #1730479 v2

time, as long as decades. In fact, there are lawyers specializing in delay tactics to extend the length of litigation. 24 These lawyers are in part motivated to keep litigation pending because of the way the Indian Bar organizes its fee structure where lawyers typically receive payment per court appearance. Indian Legal Education: While most individuals performing LPO work in India are graduates of an Indian law school, the Indian legal education system is very different than its United States counterpart. Specifically, some Indian law schools offer three-year programs, while others offer five-year programs. 25 There is also no standardized examination for law school admission. 26 Some schools offer instruction in Hindi, while others teach in English. 27 Although there are over 500 law schools in India, 28 many posses various problems such as overcrowding, lack of qualified faculty, and students not taking ethics courses very seriously. The structural differences of legal education within India itself results in disparity in terms of education and ability among Indian lawyers India. 29 Ethical Implications: U.S. lawyers must adhere to strict ethical requirements in their everyday lives, whether they are representing a client or not. Since the majority of Indian lawyers are not admitted to practice in the U.S., they do not have to abide by the same ethical requirements, even if conducting work for U.S. clients. Further, the Indian duty of confidentiality to clients is narrower than in the U.S., and therefore an Indian lawyer s understanding of applicable professional standards may not be same as that of U.S. lawyers. 30 Ethical implications can also surface with various requirements imposed upon U.S. lawyers. These include, among others, that U.S. lawyers provide competent representation, legal work be conducted by those authorized to practice law, clients be appropriately billed, and prohibitions or restrictions concerning conflicts of interest. Guidelines: Several bar associations in the U.S. have addressed some general requirements that lawyers must follow when outsourcing work, but the opinions are not exhaustive and do not address all concerns. The opinions range from requiring lawyers to sometimes inform clients that work is being outsourced, to informing lawyers that they should 24 Marc Galanter & Jayanth K. Krishnan, Bread for the Poor : Access to Justice and the Rights of the Needy in India, 55 HASTINGS L.J. 789, 822-23 (2004). 25 Dr. N.K. Indrayan, The Challenges of Legal Education: The Current Scenario, 28 INDIAN B. REV. 107, 108 (2001). 26 Id. 27 Daniel Brook, Made in India: Are Your Lawyers in New York or Delhi?, LEGAL AFFAIR (May-June 2005), available at http://www.legalaffairs.org/issues/may-june-2005/scene_brook_ mayjun05.msp. 28 Id. at 498. 29 The Multistate Professional Responsibility Examination (MPRE) is a sixty question, two-hour and five minute, multiple-choice examination administered three times each year. The MPRE is required for admission to the bars of all but three US jurisdictions. National Conferce of Bar Examiners Website, http://www.ncbex.org/multistatetests/mpre/ (last visited Mar. 13, 2008). 30 Martha Neil, Rules Unclear re Supervising Indian Lawyers, ABA JOURNAL (Oct. 19, 2007), available at http://www.abajournal.com/news/rules_unclear_re_supervising_indian_lawyers. 4 NY #1730479 v2

charge appropriate fees. 31 In New York, for example, the New York City Bar Association s opinion stated that in order to preserve client confidentiality, client information needs to be restricted. 32 This can be achieved by removing all pertinent client information, such as name, address, and other identifying information, from documents that are being provided to outsourcing companies. The same opinion also stated that U.S. lawyers are responsible for the final product and can only charge the direct cost of outsourcing. 33 Properly checking for conflicts of interest is also required and retained lawyers are responsible for any conflicts which may arise. 34 Several other bar associations, including the San Diego Bar and the Florida Bar stated that outsourcing is acceptable under certain conditions and with similar constrains as the New York City Bar stated. However, no bar opinion issued to date established clear guidelines for LPO. 35 The National Federation of Paralegal Association did publish a statement in 2005 declaring that LPO should only be done sparingly and only as a last resort. 36 Further, the ABA Center for Professional Responsibility did state that it is dangerous to assume an Indian lawyer s understanding of applicable professional standard is the same as his or her American counterparts. 37 Although ethical issues have been tested in U.S. courts, ethical concerns related to LPO specifically have not yet been tested. Hidden Costs: Comparing costs of legal services in India versus those in the U.S. immediately results in an apparent cost savings for legal services being conducted in India. However, there are hidden costs associated with outsourcing, especially LPO, which should be considered. These costs include the fact that some LPO work must be reviewed by a U.S. attorney when an Indian lawyer is not admitted to practice law in the U.S.. Further, a simple review is not always sufficient and some work may need to be redone by a U.S. attorney. Inability to ensure that work is being done in confidence, as required in the U.S., can also result in a hidden cost as the loss of confidence on certain matters, especially legal issues, can result in 31 See Law.com, Guidelines for Outsourcing Grow, http://www.law.com/jsp/llf/pubarticlellf.jsp?id=1178096674507 (Per the Sand Diego County Bar Association s Legal Ethics Committee, clients need only be informed that work is being outsourced if those clients have a reasonable expectation that the work will be conducted by the firm retained). See also detailed discussion about related bar opinions infra Part IV. 32 See Association of the Bar of the City of New York, Committee on Professional and Judicial Ethics, Ethics Opinion 2006-3 (Aug. 2006), availale at http://www.nycbar.org/publications/reports/print_report.php?rid=503&seearchterm=2006 (last visited Mar. 13, 2008). 33 Id. 34 Id. 35 Given the growth momentum of LPO, lack of solid guidelines related to it, and possible consequences involved, it is likely that the ABA and/or courts will impose stricter guidelines in the future. Further, although legislation action, both on the state and federal levels, has been limited with regards to outsourcing in general, it is possible that legislation may impose restrictions on outsourcing in the future. 36 Vesna Jaksic, Guidelines for Outsourcing Grow, THE NATIONAL LAW JOURNAL (May 3, 2007), available at http://www.law.com/jsp/article.jsp?id=1200996336809. 37 Martha Neil, Rules Unclear re Supervising Indian Lawyers, ABA JOURNAL (Oct. 19, 2007). 5 NY #1730479 v2

substantial losses. Conducting research of which LPO company to hire also requires significant time as there are many companies offering LPO services, but not all provide the same standard of service. The costs of mistakes, even minor ones, can be extremely high when it comes to LPO. For example, if a dollar amount is entered incorrectly, a strong precedent case is not citied, or many other relatively minor mistakes occur, they can have a substantial overall effect. In the legal field, perhaps more than any other field, mistakes can become very costly and such costs can be much higher than in any other industry, as related costs may not necessarily be financial, but rather ones with irreparable harm. For example, losing a legal proceeding can result in longterm effects, substantial financial constraints, and even loss of liberty. Conclusion As LPO becomes more popular, related considerations are likely to grow. Given the various benefits of outsourcing, it is likely to remain an option, in the near future, for those looking to outsource legal work. However, proper consideration should to given to related aspects. As usually is the case, careful balancing should be exercised prior to outsourcing, specifically with LPO. 6 NY #1730479 v2

GABE MILLER: A. Questions for lawyers and law firms who have outsourced legal work: NOT APPLICABLE. I AM AN IN-HOUSE COUNSEL AND HAVE BEEN FOR MANY YEARS. 1. Under what circumstances have you outsourced legal work? 2. What sort of work have you outsourced? 3. When in the process of a representation have you outsourced work? 4. Who initiated the idea of outsourcing, you (law firm or lawyer) or your client? In what context did this issue arise? 5. What conversations did you have with your clients about the process and work to be outsourced? When in the course of the representation did these conversations occur? Did you make a written record of those conversations? 6. Can you please describe the process of identifying which outsourcing firm to use and what factors were important? For example, please explain: a. Was your decision regarding who to outsource to dependent upon the location of the outsourcer? If so, in what ways? b. How did you or your firm decide whether to outsource outside of the U.S. or within the U.S., or to a firm that has workers in multiple jurisdictions including the U.S.? What issues, besides price, did you consider in this decision? c. Where did you look to find guidance to assist you in this process? Who did you call? Is there an organization or quality indicia that you looked for? d. Did you discuss the terms of the outsourcing contract/agreement with your client prior to its execution? Was your client a party to the contract/agreement? Can you share a contract with us? 7. What has your experience been when you have outsourced (inside or outside the U.S.)? 8. Has your experience with outsourcing (inside or outside the U.S.) raised any issues under the Rules of Professional Conduct and can you describe them? B. Questions for clients who have outsourced legal work: 1. Who made the initial decision that legal work should be outsourced and if the client is an organization, who in the organization did so (e.g., an officer of the organization, general counsel or a procurement employee)? GENERAL COUNSEL 2. Was the decision to outsource made in the context of legal work for a particular transaction or dispute, or as a general matter for all work that falls into a certain category, whether or not it has already arisen and is identified? LEGAL WORK FOR A PARTICULAR TRANSACTION 3. Did you involve your lawyer or law firm in your decision to outsource, and in helping to select outsourcing firms? Please describe the nature of the lawyer or law firm s involvement. WE DID NOT INVOLVE OUR OUTSIDE COUNSEL IN THE CHOICE

OF THE OUTSOURCING FIRM. THE LAW FIRM WAS TOLD AND THEN DIRECTED TO INVOLVE ITSELF IN THE PROCESS IN TERMS OF COORDINATING THEIR RESPECTIVE PIECES. 4. Can you please describe the process of identifying which outsourcing firm to use and what factors were important? For example, please explain: a. Was your decision regarding who to outsource to dependent upon the location of the outsourcer? If so, in what ways? YES IN THE SENSE THAT ALL THINGS BEING EQUAL WE WOULD ALWAYS PREFER TO DEAL WITH A LOCAL OR AT LEAST US BASED COMPANY/WORK FORCE. IT WAS NOT A COST EFFECTIVE OPTION AT LEAST NOT AT THAT TIME. ALL OF THE OFFERED OUTSOURCING WAS BEING DONE IN INDIA. b. How did you or your firm decide whether to outsource outside of the U.S. or within the U.S., or to a firm that has workers in multiple jurisdictions including the U.S.? What issues, besides price, did you consider in this decision? AS NOTED ABOVE, THE DECISION TO OUTSOURCE THE WORK OUTSIDE THE US WAS DONE RELUCTANTLY. IN MAKING THE DECISION, IN ADDITION TO PRICE, WE LOOKED AT IT LIKE WE WOULD ANY OTHER NON-LEGAL VENDOR: YEARS IN BUSINESS, REPUTATION, REFERENCES, INSURANCE ETC. c. Where did you look to find guidance to assist you in this process? Who did you call? Is there an organization or quality indicia that you looked for? ASKED SOME OTHER GENERAL COUNSELS FOR RECOMMENDATIONS. THE REST WE DID ON OUR OWN. d. Did you discuss the terms of the outsourcing contract/agreement with your lawyer or law firm prior to its execution? Was your lawyer or law firm a party to the contract/agreement? Can you share a contract with us? WE DID NOT SHARE THE CONTRACT WITH OUR OUTSIDE COUNSEL PRIOR TO SIGNING THE DEAL OR EVEN AFTERWARDS. I DON T HAVE A COPY TO SHARE WITH YOU. 5. What sort of agreements do you enter into with your outside lawyer(s) or law firm(s), if any, with regard to responsibility for oversight of outsourced work and related liability? NO FORMAL AGREEMENT. IF I HAVE THE OUTSIDE COUNSEL REVIEW OUTSOURCED WORK THEY ARE AS RESPONSIBLE AS IF THEY DID IT THEMSELVES. IN OTHER WORDS, IF I PAY THEM TO REVIEW IT THEY OWN IT. THAT WAS ONE OF THE BIG COST SAVINGS, HAVING THE OUTSIDE COUNSEL SIMPLY PROOF SOMEONE ELSES WORK PRODUCT RATHER THAN CREATE IT THEMSELVES. 6. What, if anything, changes when you decide to outsource to a firm/organization based overseas, with regard to the decision to outsource, vetting and selecting the outsourcer and the relationship with the outside law firm? THE DEGREE OF DUE DILIGENCE, AS IT WOULD WITH ANY OVERSEAS VENDOR, NEEDS TO BE GREATER AND IS HARDER TO ACCOMPLISH.

7. What has your experience been when you have outsourced or your lawyer or law firm has done so on a matter for which they represent you (inside or outside the U.S.)? GOOD. Gabe Miller Sokolove Law, LLC 93 Worcester Street, Suite 101 Wellesley, MA 02481 Office: 781-489-7836 Fax: 781-489-2277 Cell: 781-789-6542 www.sokolovelaw.com GEOFFERY NAAB: Dear Ms. Vera, I'm afraid this will not be very helpful to the Commission, but perhaps it will serve some use in the communication department. I can't comment on the ethical implications of "legal process outsourcing," because I don't know what "legal process outsourcing" means. Does it mean outsourcing the business of service of process? At least in the federal courts and the courts of my state (Connecticut) we lawyers can't serve process in our own cases. Papers that can't be served by mail or electronically are always passed on to a marshal or other official or private process-server to be served. So, are you investigating the ethics of the process-serving business? And if so, why not say so directly? If that's not what "legal process outsourcing" means, then I am at a loss as to what it does mean. Anyway, best wishes for the success of your project, whatever it may be. Geoffrey Naab WILLIAM G. NICKOL: Dearest Ms. Vera, Your organization has ruined my life. By allowing Big Law to ship attorney jobs overseas, you have essentially destroyed the legal industry. It is absurd that an attorney in India, who has not attended an ABA-accredited law school or taken the Bar Exam or the MPRE, can practice law in New York more easily than an attorney from New Jersey. Your organization is playing with fire. It is only a matter of time before a foreign attorney, who is not subject to the laws of the U.S., engages in insider trading or other nefarious conduct. I am not sure whose interests you are out to protect. As an attorney, I am certain you don't think of my interests when you issue ethics rulings facilitating the Unauthorized Practice of Law by foreigners. Your relationship with be begins and ends with a magazine subscription.

There are legions of unemployed attorneys out there who should be doing this work, not third party nationals. I pray for the collapse of the ABA. Thank you! Sincerely, William G. Nickol

HERBERT OGDEN: I have outsourced legal work for only two purposes. I have hired professionals in my own county, never foreign, to do two things (1) write an appellate brief and (2) research land records. I initiated it, pointing out to the client that it would be cheaper than to have me do it. JARED PIAGGIONE: To whom it may concern: I am a 2008 graduate of Albany Law School admitted in New York and the District of Columbia. Thanks to the complete collapse of the financial sector in 2008 I have been left without employment since graduation and am now being passed over for 2010 and 2011 graduates for most jobs. I have been reduced to the living nightmare of performing temporary document review to satisfy my student loans; this was after I worked a year as a painter and pizza delivery boy because I could not find ANY work in Albany, NY. I moved to Washington for an internship with the District of Columbia Attorney General's Office only to be ignored for months and then told the internship was unpaid. Hence, I have been stuck working in miserable conditions (no windows, eight in a room meant for two, 300 in a room meant for 50, having to have my bathroom breaks timed, working from 6 AM to midnight clicking away, being fired only to be re-hired the next day at a lower rate, being fired for having a dentist's appointment etc I could go on) and now you want to say it is ok to take even this miserable existence away from me? By allowing outsourcing? This was never my idea of a career when I went to law school but this is outrageous! I don't understand how you can think this is okay to treat your colleagues this way, I never did anything to deserve this! And don't kid yourself that I have somehow been well compensated for all of this misery endured, I made $34,000 last year killing myself for these temp agencies who treat me like scum. $34,000 minus taxes and minus these student loans? I don't understand how on one hand, these supervisory attorneys can be responsible for ethical violations of subordinates, but are under no duty to provide them with subsistence wages or something other than hellish conditions. And now to add to the torment we are now being asked to compete with firms in India! GEORGE RECCO: Dear Ms. Vera: Why are we only outsourcing our legal work to India? Why don't we outsource the entire American Bar Association to India as well, so it can be closer to its true constituency? Wouldn't that be far more efficient? And let's outsource our law schools, bar exams, and student loans to India as well, whatever it takes to keep those profits-per-partner growing. Regards, George Recco, Esq.

Integreon Submission on Legal Process Outsourcing to ABA Section of International Law and ABA Commission on Ethics 20/20 April 16, 2010 This document reflects Integreon s corporate view. Mark Ross, Ron Friedmann, Foster Gibbons and Matthew Banks (see below for their backgrounds) were the primary authors. Integreon s senior management (CEO, CFO, Sales Head, CMO, and COO) has reviewed and approved this submission. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 1 of 11

Table of Contents Brief Overview of Integreon... 3 A Word about Legal Process Outsourcing (LPO) and Electronic Discovery (EDD)... 3 Provider Answers to ABA Questions... 4 1) Where do your workers work?... 4 2) Are the workers who perform the outsourced tasks educated and licensed as lawyers somewhere? If some are and some are not educated and licensed as lawyers somewhere, what is the proportion of lawyer to non-lawyer?... 5 3) What proportion of lawyer workers are educated and licensed in the jurisdiction where they sit, educated and licensed in the jurisdiction whose law governs or educated and licensed in the U.S.?... 5 4) For non-u.s. based providers do you have a staffed physical presence in the U.S.? Who staffs it (e.g., U.S. licensed lawyers) and what is done there?... 5 5) How do you decide which individuals should work on which matters?... 6 6) What do you do to help your employees understand the U.S. rules of professional conduct and who provides this education or training?... 7 7) How do you do train and assess the competence of your workers and assess and verify the quality of the work done?... 7 Assessing Quality Performance... 8 Defining Quality... 8 Measuring Quality... 8 Analyzing Performance... 9 8) What types of security systems to you have in place to ensure data integrity and compliance with confidentiality requirements of those who hire you?... 9 9) What types of systems do you have in place to avoid conflicts of interest regarding those who hire you?... 10 10) Are you regulated? In what way and by whom? Are there competing regulations and regulators?... 11 APPENDICES A Integreon Ethics of Legal Outsourcing course materials B Integreon Security Policies, Procedures and Controls document. C Integreon Non-Disclosure, Restricted Trade of Securities and Non-Solicitation Agreement. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 2 of 11

Brief Overview of Integreon Integreon is a global Knowledge Solutions provider, serving demanding professionals in large U.S. and U.K. law firms, investment banks and corporations since 1998. We provide Research Solutions (such as market research, competitive intelligence and financial analysis), Legal Solutions (also known as Legal Process Outsourcing (LPO), such as e-discovery, document review for litigation and regulatory investigations, contract management and review, due diligence support, intellectual property support, and legal research) and Business Solutions (such as word processing and presentation graphics, accounting, HR, and IT). LPO is the focus of attention in this document. Our LPO value proposition focuses on managing cost (reducing and predicting cost), managing risk and improving performance (productivity and quality). Our goal is to help our clients become more effective and efficient. We invest heavily in people, process, and technology. Our expertise lies in combining legally trained human resources with the best practices of outsourcing (such as documented processes and clearly defined performance metrics, disciplines not traditionally considered the forte of attorneys) and, where possible, with technology to further bolster productivity and quality. Our management team includes numerous executives with extensive law firm, corporate legal and LPO experience. Collectively, we have decades of experience managing or practicing inside large law firms and corporations in the U.S. and U.K. Integreon has hired leadership with legal domain experience, including: Chris Bull, our Chief Operating Officer of Europe and the Americas, was previously a longserving Board member at dynamic U.K. top 30 law firm Osborne Clarke Matthew Banks, our Senior Vice President of Legal Solutions, previously practiced at Linklaters and Eversheds. Ron Friedmann, our Senior Vice President Consulting, is a lawyer by training and was formerly the CIO at Mintz Levin and practice support director at then Wilmer Cutler. Foster Gibbons, our Director of Global Document Review, was formerly in-house counsel at Pfizer and responsible for the company s North American discovery efforts. Mark Ross, our Vice President of Legal Services, was formerly a partner at Underwoods solicitors and is a recognized leading authority within the LPO industry. Other Integreon management have prior experience at firms including Clifford Chance, Skadden Arps, Milbank Tweed, Cravath, Dewey LeBeouf, and Lowenstein Sandler. A Word about Legal Process Outsourcing (LPO) and Electronic Discovery (EDD) Integreon includes its e-discovery (EDD) unit within its Legal Solutions group. We understand that the ABA and many lawyers perceive LPO as distinct from EDD. We think that over time, that distinction is not sustainable. The line between document review and technology is blurring. Furthermore, several LPO and EDD providers (Integreon included) offer both LPO and EDD services because of the increasingly tight connection between the technology tasks of collecting, processing, hosting, and producing data and the human task of manually reviewing documents. We believe that the ABA consideration of the ethics of outsourcing should consider EDD, at least with respect to frequent staffing models for it, which include contract and temporary lawyers. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 3 of 11

Provider Answers to ABA Questions 1) Where do your workers work? Integreon employs approximately 2,200 personnel worldwide, 40% of whom are engaged in legal support services activities. Of that total, approximately 430 are attorneys, JDs or lawyers qualified in a particular jurisdiction, actively engaged in delivering LPO services and 150 are engaged in the provision of EDD solutions. Integreon has delivery centers across the U.S., U.K., India, the Philippines, China, and South Africa. Integreon does not currently provide all LPO services out of each one. Highlighted in bold in the following table are the LPO capabilities for each delivery center. STANDING US (ONSHORE) LOCATIONS City State Type of Service(s) New York NY Document Review, Legal Research, Contract review, drafting and management, Due Diligence Support, ediscovery Forensics, Processing, LPO Management LA CA Executive Management, Program Management, ediscovery processing Fargo ND Document Review, Legal Research, Contract review, drafting and management, Due Diligence support, Graphics Services, Project Management, Implementation Services, Proofreading, Transcription, & Secretarial Arlington VA ediscovery Forensics, Processing, Document Review Production Center, LPO Management Atlanta GA ediscovery Services, LPO Management Chicago IL LPO Sales, LPO Management Durham NC ediscovery Services, LPO Sales and Management Cambridge MA Research Services and Sales, KPO Management STANDING OFFSHORE LOCATIONS City Country Type of Service(s) Mumbai India Document review, legal research, contract review, drafting and management, due diligence support, ediscovery. KPO; Document, Graphic & Bus Services (F&A) Delhi India Document review, contract review, drafting and management, legal research, due diligence support, ediscovery, Research KPO primary research; Knowledge Services Manila Philippines Document review, contract review, drafting and management, due diligence support, legal research, Knowledge Services; Analytics; Presentation Graphics Bristol U.K. Document review, contract review, drafting and management, due diligence support, legal research, Business Intelligence, Knowledge Management & Development, Transcription & Secretarial, IT Services London U.K. Transcription & Secretarial, IT Services, Sales Beijing China Research KPO primary research Johannesburg South Africa Research KPO primary research. (Document review, contract review, drafting and management, due diligence support, legal research to be offered Q3 2010) London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 4 of 11

2) Are the workers who perform the outsourced tasks educated and licensed as lawyers somewhere? If some are and some are not educated and licensed as lawyers somewhere, what is the proportion of lawyer to non-lawyer? Qualified lawyers, paralegals, and legal support personnel comprise our LPO solutions group. Actual client work is performed by teams of lawyers and paralegals, under strict instruction from client s counsel in each engagement. Of the 430 qualified lawyers, approximately 100 are formally and currently licensed in their jurisdiction. Note that all Indian lawyers at LPOs suspend their practicing licenses while they are in LPOs hence we do not consider them to be licensed. In the U.S., we have a combination of admitted attorneys and JDs/paralegals, typically 50:50 split. Although we have many qualified and licensed lawyers, we do not, in any jurisdiction, practice law. Integreon provides only legal support services. 3) What proportion of lawyer workers are educated and licensed in the jurisdiction where they sit, educated and licensed in the jurisdiction whose law governs or educated and licensed in the U.S.? The following table provides an approximate breakdown of our LPO workforce, based on the jurisdiction in which they achieved their legal qualifications, and the location in which they are situated. Jurisdiction India Number of Lawyers Qualified in that Jurisdiction 260 (none of whom are licensed due to temporary bar suspension ) 120 (of whom 60 are licensed) 1 U.K. U.S. (numerous States) The Philippines 40 (all of whom are licensed) 1 U.S. U.K. 8 (4 of whom are licensed) N/A Number of Lawyers Qualified in another Jurisdiction 1 U.S. and 2 U.K. All 150 of our EDD staff are based in the U.S. That staff includes 5 qualified lawyers; none are licensed. 4) For non-u.s. based providers do you have a staffed physical presence in the U.S.? Who staffs it (e.g., U.S. licensed lawyers) and what is done there? See answers to question 1 and 2 above. Integreon employs lawyers in New York, Arlington and Fargo, ND. We are an LPO with a global platform. We provide the same LPO solutions from both onshore and offshore locations (and sometimes dual shore). Many projects are delivered from the U.S. alone. In certain instances, our U.S.-qualified lawyers based in the U.S. assist in managing offshore projects and provide quality control or second level review of work performed largely offshore. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 5 of 11

5) How do you decide which individuals should work on which matters? Integreon offers LPO service onsite, onshore, and offshore. We determine both the staff location and type of staff in collaboration with clients; we consider factors such as desired turnaround time, expected duration of the matter, total likely volume, expertise required, cost, communication protocol, and client preferences. Integreon is fully versed with and compliant with the recommendations stated in ABA Formal Opinion 08-451, which states: At a minimum, a lawyer outsourcing services... should consider conducting reference checks and investigating the background of the lawyer or nonlawyer providing the services. The lawyer also might consider interviewing the principal lawyers, if any, involved in the project, among other things assessing their educational background. In the Staffing Assessment stage, Integreon works closely with clients to determine the staff necessary to successfully complete a LPO project. This determination includes choosing a staffing model, assessing how much staff is needed, and detailing the necessary staff qualifications. Integreon offers flexible staffing models to meet individual client needs. Whether the project is a permanent ongoing engagement or a transactional project with a shorter finite term, the matter will be staffed by employees who are dedicated to that client/project. Workers in dedicated delivery centers can mirror the client s workday or have designated overlap hours. Another staffing model provides onsite personnel. For some services, this staff consists of fulltime Integreon employees. For onsite document reviews (currently in the U.S. only), Integreon also deploys contract review attorneys. Staff are selected on the basis of their relevant prior experience or area of domain expertise. For example, on a contract review engagement we may select only those lawyers who have past experience working with commercial contracts. Another example might be a litigation document review on a patent infringement matter for a client in the technology sector, where we might include in the team those with particular experience in IP and or technology issues. Client teams contain a blend of experience. All teams typically are led by a manager who is a senior lawyer with an average of 10 years experience. Team Leaders, who typically have 5-years experience, manage sub-teams of 10 lawyers; of those 10 lawyers it would be normal to expect 2 or more to be dedicated to quality control. Staff with quality control responsibility require greater experience. We regularly provide clients with profiles or CVs for all key team members and managers, as well as members of its executive management team. In addition, Integreon provides resumes of all review team members assigned to client projects when requested. Integreon will make any proposed client team members available for interview by the appropriate client personnel. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 6 of 11

6) What do you do to help your employees understand the U.S. rules of professional conduct and who provides this education or training? Integreon provides an accredited MCLE Ethics course, entitled Ethics of Legal Outsourcing. See attached Appendix A - Integreon Ethics of Legal Outsourcing course materials (includes course outline, course PowerPoint and Integreon Ethics of Outsourcing White Paper). This course is provided both internally to Integreon employees and also externally to Integreon clients and potential clients. This course is taught by Mark Ross, Integreon s Vice President of Legal Services, (a U.K. solicitor and former partner at Underwoods solicitors), Michael Sonsteng, Vice President of Legal (India) ( U.S. attorney and former adjunct professor at two U.S. law schools), and Foster Gibbons, Director of Global Document Review (U.S. attorney and former Pfizer in-house counsel). Integreon s Ethics of Legal Outsourcing course addresses the following key issues: Unauthorized Practice of Law Supervisory Responsibilities Duty to Act Competently Duty to Disclose Conflict of Interest Implications and Risks Client Confidentiality Billing Appropriately Export Control Regulations U.K. Data Protection Act Association of India Lawyers Madras High Court Petition (March 2010) The above issues are considered in the light of ABA Formal Opinion 08-451 (Lawyer s Obligations When Outsourcing Legal and Nonlegal Support Services) and the various Bar Association (Florida, San Diego, NYC, Los Angeles, North Carolina) Opinions on Legal Outsourcing. Integreon s course delves into the steps a U.S. lawyer should undertake when evaluating a potential LPO provider. Integreon s document review associates, onshore and offshore, are required to attend a series of senior-u.s.-lawyer-led training sessions on privilege as part of the initial vetting and training process. This ensures that elemental questions on privilege are addressed clearly and authoritatively. 7) How do you do train and assess the competence of your workers and assess and verify the quality of the work done? Integreon has a mature and well-defined training structure managed by a professional Learning and Development organization within the company. First, all associates receive company orientation that includes our culture, our processes, and our human resource policies. All associates also receive basic Microsoft Office training. Integreon provides this basic training to increase the productivity and proficiency of each London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 7 of 11

associate. All Legal Associates, irrespective of position within the organization, receive internal training dealing specifically with the ethical implications of outsourcing legal work as described above. A security awareness training module is included as part of our orientation program, delivered by our Chief Information Security Officer or his designate. Staff are required to certify understanding and agreement to adhere to our security policies. A refresher course is run semi-annually and staff is required to re-certify. Secondly, the lawyers receive Integreon general legal training. All Integreon Legal Associates, whether they are located onshore or offshore, receive training in document review, contract review, and legal research and writing. Integreon s legal training curriculum was developed by qualified U.S. attorneys, all of whom are experienced professors in their field. Many of our legal trainers still actively teach as adjunct faculty members at local and national universities. Integreon s curriculum is substantially similar to that used in U.S. legal education and is supplemented with internal continuing education classes in securities law, intellectual property law, advanced legal research, and advanced contract review. Legal associates are also required to pass Integreon s advanced training modules to proceed to the next level and pay grade. Thirdly, Integreon provides client/project specific training relevant to an associate s position that details substantive matter information and expectations and processes specific to particular matter. Fourthly, Integreon then requires additional classes to expand their ability to fulfill client needs. This includes continuous education programs covering productivity and professionalism classes such as Customer Service and Personality Styles Integreon mandates that management participate in leadership classes. This training includes management philosophy, management structure, and process explanation. In addition, Integreon offers additional management improvement modules. Assessing Quality Performance The first step in assessing quality is to clearly and objectively define it. The second step is to measure performance on a continuous basis and the third is to analyze the performance data to understand the reason for it. Defining Quality Our lawyers work with our Quality and Continuous Improvement (QCI) team of Six Sigma Blackbelts to set objective definitions and benchmarks which are then agreed with our clients. Document review example: In a document review in litigation discovery, for example, the quality metric for privilege is measured by whether any otherwise producible information or material potentially subject to a claim of privilege, as defined by counsel, escapes designation as privileged or possibly privileged in first level review. This standard establishes a very high accuracy standard, in effect, 100%. We measure our performance against that standard by measuring the incidence of potentially privileged documents designated as relevant but not privileged are detected in subsequent quality checks and privilege screens. Measuring Quality The defined standard becomes the benchmark against which performance is assessed. Performance is measured on a daily basis. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 8 of 11

Measurement of quality occurs at two levels. First is Integreon internal measurement. Each team comprises senior lawyer quality checkers whose task is to check the work of the associate lawyers, make changes where they think necessary and record number of changes and rationale. Quality checking may be 100% or it may be based on targeted or statistical samples depending on the nature of the task and how mature the process is. Performance data is inputted into a software program for calculation and appraisal. The second level is client validation. Typically, the client will check a sample of our work product and provide feedback. If for example the client checks a sample of 10% of our work product, the data from that sample will be extrapolated to give a quality score for the whole output. Document review example: Before a document review project is begun, we define with client s counsel a regime for our internal quality control and counsel s further review of our output, and a protocol for receiving and acting on feedback from counsel. Typically, we deploy a quality control team to re-review some sample of the output of the first review team, initially at even 100% of documents reviewed, catalogue all changes made at QC for assessment of first reviewer accuracy and, if common patterns of error are detected, highlight to the team where errors are being made. As a project proceeds, we forward to counsel team queries and documents that give rise to questions or error, and ask counsel to resolve questions and to clarify instructions, and to validate designations made in first review, where warranted. Clarifications from counsel are documented and incorporated into the review guidance. Ultimately, we perform a series of internal validation screens over the review output, which screens have been designed collaboratively with counsel, to detect inconsistent coding, possibly missed privilege calls, and to provide an additional level of quality assurance to our review results. At each stage, as errors are detected and corrected, the number and type of error are logged and reported to counsel on a near-real-time basis, with a report of progress. Analyzing Performance Performance cannot necessarily be understood based purely on statistical data. Document review example: All errors made in first review are recorded and reported. In addition we change designations previously made where counsel changes the review guidelines. In that setting, certain errors made in first pass can later be determined to have been correct, and vice versa. Where review guidelines change midstream, precise statistical measurement of accuracy or correctness is difficult because the number of changes from original designations no longer reflects errors, rather they reflect a refined understanding of the documents. 8) What types of security systems to you have in place to ensure data integrity and compliance with confidentiality requirements of those who hire you? In brief, all of our offshore LPO work is conducted in separately demised rooms that are secured by, among other measures, (1) card key reader, (2) biometric device, (3) video surveillance, (4) security watchmen, (5) extensive logical (that is, computer network) barriers, and (6) controlled access to the entire premises, including prohibition of and inspection for digital or analog copying devices. For a detailed description of security and confidentiality policies and procedures: London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 9 of 11

See attached Appendix B - Integreon Security Policies, Procedures and Controls document. See also attached Appendix C - Integreon Non-Disclosure, Restricted Trade of Securities and Non-Solicitation Agreement. If there is a difference in security systems for work performed inside and work done outside the U.S., please explain. Not Applicable. 9) What types of systems do you have in place to avoid conflicts of interest regarding those who hire you? Integreon has a conflicts checking process similar to a law firm that is based on best practices for ethics and professional conduct. Integreon maintains a conflict of interest and confidentiality policy, (please refer to attached Integreon Conflict Policy) ultimately so that its LPO customers can outsource to Integreon and still observe appropriate professional standards with their end-user legal clients. Where Integreon is requested to support a customer on a particular legal matter (e.g., litigation support or due diligence reviews for a transaction), it initially assesses with the customer whether Integreon s participation in the matter has potential for a conflict of interest. In that assessment, Integreon relies on the customer to provide it with information about potential adverse parties so that it can run a conflict check against its own customer records and, if appropriate, specific assignments. Where a potential conflict is identified, Integreon then works with the customer to determine the best course of action to address conflicts, including obtaining consents, ensuring that services provided by Integreon do not in fact result in a conflict of interest or not engaging for that particular matter at all. Conflicts checking are performed by Integreon s GC group based in Los Angeles. Upon the acceptance of a project, all client, adversary and litigation subjects are collected and checked against current and past projects where a conflict may occur. Integreon s Office of the General Counsel owns the conflict check process. The process is then executed by Matthew Banks as global head of Legal Solutions and is validated by the General Counsel as process owner to ensure compliance. Integreon Conflicts Policy includes but is not limited to the following active steps: Databases maintained of existing and former clients Databases screened for conflicts prior to project/client engagement New employees screened for potential clients prior to employment engagement Candidates required to divulge full and complete past work history Candidate work history is cross-checked with potential conflicts data sheets provided by clients For new client projects, prospective team members re-checked for internal conflicts prior to divulgence of any client information Any potential conflicts are removed from projects without complication London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 10 of 11

10) Are you regulated? In what way and by whom? Are there competing regulations and regulators? Integreon is not directly regulated by external bodies. As with any corporation, however, various statutes, rules, and regulations apply to our business as they do to most any business. For our legal services, we are very conscious, both as a legal and strategic matter, of the unauthorized practice of law rules in U.S. jurisdictions. We are very careful not to hold ourselves out as practicing law and to ensure that our clients whether law firms or law departments are adequately supervising our work so that we are not close to a line that would constitute UPL. Furthermore, as a business matter if nothing else, maintaining the confidence of our lawyer clients is absolutely essential. We therefore work closely with our clients to ensure that both we and they comply with any applicable legal ethics rules. As of this writing, we are unaware of any LPO that is publicly traded and therefore subject to SEC or other securities agency or exchange regulations of the U.S. or of any other country. Our corporate goal, however, is to have the option for an initial public offering within the next few years. To achieve that, we are aligning our internal practices and governance to be fully consistent with those of a publicly traded corporation. It is normal for outsourcing contracts (Master Service Agreements) to contain strict obligations which reflect the legal and regulatory conditions relevant to the clients host jurisdiction. For example, most MSAs with European clients will contain Data Protection provisions which require the LPO provider to comply with EU Data Protection legislation. Legal regulations are not the only framework that helps ensure proper and appropriate business practices. To ensure that Integreon provides the highest level and quality of service, we have voluntarily sought and received certification for several international standards, as enumerated below. Earning certification for many of these standards is an arduous, time-consuming, and expensive process that involves audits by independent companies. In 2005 Integreon earned BS 7799 Information Security Management certification and ISO 9001:2000 Quality Management Process certification. In 2007 Integreon upgraded its Information Security Management certification to ISO 27001:2005 In 2009 Integreon upgraded its Quality Management Process certification to the new QMS of ISO 9001:2008 at all of its delivery centers worldwide. Integreon s ISO Quality Management and Information Security certification is provided by British Standards Institute (BSI). BSI conducts audits for both the standards once a year. In addition Integreon has a team of certified internal auditors who audit all processes for both the standards on a quarterly basis. Integreon is also compliant with all Safe Harbor policies and is currently a certified Safe Harbor company in all its onshore and offshore facilities. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 11 of 11

Ethics of Legal Outsourcing White Paper By Mark Ross, Vice President Legal Services, Integreon The practical reality for US and UK attorneys engaging in or contemplating Legal Process Outsourcing (LPO) is that the outsourcing of both core legal and support services across the legal profession is nothing new. Think about the following examples: a. Whenever a client sends work to his/her lawyer, it is outsourcing the work. b. Whenever a law firm sends work to local counsel in another jurisdiction, or to a specialist outside the firm, it is outsourcing the work. c. Lawyers have outsourced legal and law related services for generations (e.g. from one lawyer to another within a single firm, from a law firm to a legal research or document review staffing company, etc.). What is different today with the emergence of the LPO industry is that both core legal and legal support related services are being outsourced to lawyers, law firms and corporations located offshore in countries such as India, South Africa and the Philippines. The outsourcing of legal work by a law firm or legal department to a legal outsourcing company or an entity located offshore raises specific issues pertaining to the outsourcing lawyer s ethical obligations to his or her client. The concept of outsourcing elements of the legal process, particularly offshore, is provocative to say the least. In the UK, the relevant regulatory bodies, the Solicitors Regulation Authority (SRA), and the Law Society, have been virtually silent bystanders as market acceptance of LPO has gathered momentum. In the US the American Bar Association and several Bar Associations have discussed the practice of legal outsourcing, providing more detailed guidance (albeit still limited) than that which is available in the UK. The overriding principles, however, governing both US and UK lawyers compliance with their ethical obligations, are remarkably similar in both jurisdictions. This paper will initially examine the position as it stands in the US before turning its attention to the UK. While not professing to be a definitive how to guide to ethical compliance, the paper will also provide some practical suggestions aimed at ensuring US and UK lawyers avoid falling foul of their respective ethical obligations. US I do have concern about confidence, confidentiality, privacy, conflict of interest, ethical values, and those are issues that are a real concern. - Jerome Shestack, former President of the American Bar Association [1] In the early part of the decade, the formative years of the industry, proponents of LPO were oftentimes met with the question: Is this ethically permissible or even legal? In the US to date, six Bar Association Ethics Committees, the Supreme Court of Ohio Board of Commissioners on Grievances and Discipline and the American Bar Association Standing Committee on Ethics and Professional Responsibility [2] have released Opinions discussing the outsourcing of legal work. All of the Opinions have concluded that a lawyer in the US can outsource legal work and at the London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 1 of 16

same time satisfy his or her ethical obligations. Arguably the Opinion that carries the most weight is the one released by the American Bar Association in August 2008. One novel point about the ABA Opinion, as opposed to those by the individual Bar Associations, is the noticeably conciliatory tone utilized with regards to outsourcing both generally and specifically within the legal profession. At page 2 the Opinion comments that: The outsourcing trend is a salutary one for our globalized economy. It is the Digest to the New York Opinion, however, that most succinctly consolidates the major ethical issues for consideration: A New York lawyer may ethically outsource legal support services overseas to a non-lawyer, if the New York lawyer (a) rigorously supervises the non-lawyer, so as to avoid aiding the non-lawyer in the unauthorized practice of law and to ensure that the non-lawyer s work contributes to the lawyer s competent representation of the client; (b) preserves the client s confidences and secrets when outsourcing; (c) avoids conflicts of interest when outsourcing; (d) bills for outsourcing appropriately; and (e) when necessary, obtains advance client consent to outsourcing. While individual States may reference their own particular rules of conduct, there is sufficient overlap among the States that for the purposes of understanding a lawyer s ethical obligations when outsourcing legal work overseas, reference to the ABA s Model Rules of Professional Conduct (MRPC) [3] is often sufficient. It is beyond the scope of this paper to explore in detail each and every Bar Association Opinion, together with each individual State s rules of conduct. I will, however, attempt to provide a broad level of oversight into some of the most crucial areas of concern while highlighting the relevant rules. In addition, it is worth noting that a lawyer s ethical obligations differ depending on whether outsourcing is for substantive legal support services, such as research, drafting, contracts, document review, writing legal memoranda, drafting patent applications, or for administrative support including transcription, document coding, accounting and clerical support. For the purposes of discussion within this paper I will reference the obligations associated with outsourcing of substantive legal support services. While there is a degree of overlap with the ethical obligations associated with administrative support outsourcing, particularly when client confidences are disclosed, it is further beyond the scope of this paper to disaggregate each and every administrative support function to determine which ethical rule applies and which does not. Avoiding Aiding and Abetting the Unauthorized Practice of Law The defining genuine, as opposed to perceived, ethical issue associated with the LPO industry is the problem of the unauthorized practice of law (UPL) by individuals not qualified to practice law in a particular jurisdiction, and the associated aiding and abetting of UPL. The MRPC at 5.5 (a) states: A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction or assist another in doing so. [3] London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 2 of 16

The reasoning behind UPL is that limiting the practice of law to members of the bar protects the public against rendition of legal services by unqualified persons. [4] The key determining issue pertains to what is classified as the practice of law, and if an activity would otherwise be considered as the practice of law, what safeguards and procedures are put in place, if any, to negate the possibility that the LPO employees are engaged in UPL. For the purposes of discussion within this paper as mentioned earlier, the assumption will be made that the legal work being outsourced is of a substantive rather than an administrative nature, hence viewed as the practice of law in the normal course of events. The Opinions all conclude that outsourcing legal work overseas does not constitute aiding and abetting the unauthorized practice of law where the outsourcing lawyer enacts an appropriate degree of supervision. The necessity to supervise is analogous to the duty owed when delegating work to a paralegal. The necessity to supervise remains in place irrespective of the degree of seniority and level of experience of the lawyers located offshore or in another jurisdiction employed by the LPO entity. The New York Bar Opinion comments that the New York Code of Professional Responsibility describes both a foreign lawyer not admitted to practice in New York, or in any other US jurisdiction, and a layperson as non-lawyers. The outsourcing lawyer should establish practices and procedures for the supervision of offshore legal support that are adaptable and compensate for the physical separation, time zone differences, and any differences in legal systems and legal education and training. There is no all-encompassing check list of steps to take to avoid aiding and abetting UPL, however it is recommended that the outsourcing law firm become sufficiently familiar with the professional training of the LPO company s employees, participate in the training program specifically as it relates to relevant legal and ethical rules, and establish regular communication practices to ensure that the LPO employees have reasonable access to supervising lawyers in the outsourcing law firm. The physical degree of separation inherent in the offshore outsourcing relationship may make this act of supervision somewhat more difficult from a practical perspective. The outsourcing lawyer should undertake appropriate due diligence to determine the competence of the legal outsourcing company in performing the desired services. Proactive steps that can be taken in terms of supervision include the review of communications between and among the outsource provider, attorney and client and the instigation of a defined protocol for quality checking of assignments. Work with your chosen LPO provider to create a documented, defensible process, which if necessary, can be referenced in a court of law, as evidence that an appropriate system of supervision was in place. The crucial issue is that at all times the US attorney retains ultimate responsibility for the outsourced work and is subject to the particular State Bar Acts and Rules of Professional Conduct relating to violation of professional responsibilities. Ensure that the outsourcing company assists a California Attorney in practicing law, NOT the other way around. [5] London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 3 of 16

Competent Representation MRPC 1.1 A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. Taking the Opinions as a whole they are useful in that they provide an extended checklist, paraphrased below for US attorneys contemplating outsourcing legal work overseas. Adherence to the below list helps ensure compliance with the duty competently to represent one s client. The below list, however, is neither all-encompassing nor compulsory in each and every outsourcing situation. Conduct reference checks. Investigate the background of the lawyers, non-lawyers and service provider. Interview the principal lawyers involved in your matters and assess their educational background. Inquire into the LPO s hiring practices to evaluate the quality and character of the employees likely to have access to client information. Investigate the security of the provider s premises and computer network. Conduct a site visit. Assess the country to which services are being outsourced for its legal training, judicial system, legal landscape, disciplinary system and core ethical principles. Disclose the outsourcing relationship to the client and obtain informed consent. The San Diego Opinion references a useful hypothetical case scenario whereby a small law firm takes on a complex intellectual property dispute in the San Diego Superior Court. The law firm has limited experience in intellectual property litigation. The law firm then contracts with a fictional India based LPO company, Legalworks, to undertake substantive legal support work associated with the case. Although Legalworks particular area of expertise lies in the field of intellectual property, in questioning whether this satisfies the duty to act competently the Opinion comments that: nor does procuring work product from a firm experienced in American intellectual property litigation fulfill the attorney s duty to act competently. To satisfy that duty, an attorney must be able to determine for himself or herself whether the work under review is competently done. To make such a determination, the attorney must know enough about the subject in question to judge the quality of the work. It is clear that to satisfy the duty of competently representing one s client that a US lawyer engaging an LPO provider cannot rely on the LPO provider to evaluate its own work product and must himself be able critically and independently to evaluate the work product received. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 4 of 16

Duty to Disclose a) If Client Confidences and Secrets are to be Disclosed MRPC 1.6 Confidentiality of Information (a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b). The outsourcing lawyer in virtually all instances will be under a duty to disclose the nature of the outsourcing relationship to his or her client. If any client confidential information is to be disclosed then the client must be informed. The implied authorization Rule 1.6(a) relates to the disclosure of client confidential information within a law firm. The ABA Opinion comments that where the relationship between the firm and the individuals performing the services is attenuated, as in a typical outsourcing relationship no client confidential information may be revealed without the client s informed consent. It is difficult to envisage a legal outsourcing engagement that does not involve client confidential information, and thus in each and every situation it is recommended that the client provides informed consent. b) If Client reasonably expects work to be performed in-house The San Diego Opinion indicates that the duty to inform the client is determined by the client s reasonable expectation as to who will perform those services. If the work to be performed by the outside service is within the client s reasonable expectation under the circumstances that it will be performed by the initially instructed US attorney, the client must be informed when the service is outsourced. Conversely, if the work is not such that it is within the client s reasonable expectation that it will be performed by the attorney, the attorney is not necessarily required to inform the client of the arrangement. Unfortunately, this is an overly simplistic and static view of the attorney/client relationship and the ever changing world of legal support services. Clearly, at this current juncture in time, the drafting of complex motions and pleadings on a particular case or the provision of premium legal advice comes within the ambit of a client s reasonable expectations that the work would be performed by their instructed attorney. However, the Opinion only considers the here and the now. A client s reasonable expectations are not static, immovable or unchanging over time. The legal industry now operates in a global marketplace and clients are evermore sophisticated and accepting of the concept of globalization. A client s reasonable expectations today will be vastly different tomorrow. Within a very short period of time it is conceivable that this argument will become to an extent, redundant. Soon, a client s only reasonable expectation will be that the quality and confidentiality of the work-product is maintained by whoever completes it, wherever he or she may be. As the legal profession continues along its evolutionary journey towards commoditization, particularly for certain process driven legal tasks, such as document review or the large scale review of documents for an M&A due diligence, we may soon reach the day when a client s reasonable expectations will be that work-product should be outsourced to the most efficient and cost-effective provider. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 5 of 16

c) If Cost of Engagement is Marked-Up The Ohio Opinion discusses the current modus operandi within law firms of engaging with and subsequently marking up the cost of domestic based contract attorneys, and the lack of disclosure of this practice to clients. According to the Supreme Court of Ohio a scenario whereby disclosure, consultation and informed consent is not necessary is when a law firm engages a contract attorney in a situation when, for example, a sudden illness of an employee requires a temporary replacement who functions as an employee of the law firm. The Opinion states that, Outside this narrow circumstance, disclosure, consultation, and consent are the required ethical practice. Although the Ohio Opinion does not reference the common practice of engaging domestic based contract attorneys for large scale document review projects, as I interpret it, that would not fall within the narrow circumstance detailed above. In any event if a USlawyer engages an LPO provider and wishes to charge anything other than the basic cost of the services then according to the Ohio Opinion: if any amount beyond cost is added The decision must be communicated to the client preferably in writing, before or within a reasonable time after commencing the representation The ABA Opinion states that when engaging contract lawyers you can mark up: In Formal Opinion No. 00-420, we concluded that a law firm that engaged a contract lawyer could add a surcharge to the cost paid by the billing lawyer provided the total charge represented a reasonable fee for the services provided to the client In the absence of an agreement with the client authorizing a greater charge, the lawyer may bill the client only its actual cost plus a reasonable allocation of associated overhead, such as the amount the lawyer spent on any office space, support staff, equipment, and supplies for the individuals under contract. The crucial words are in the absence of an agreement authorizing a greater charge. Clearly if the outsourcing attorney wishes to mark up the cost of outsourced services then there must be prior consent on the part of the client. Protecting Client Confidences and Secrets The Ohio Opinion comments that: Client confidentiality is a hallmark of the attorney client relationship. The San Diego County Bar Association Ethics Opinion 2007-1 states that an additional duty of an attorney who outsources work, whether within the US or abroad, is to maintain inviolate the confidence, and at every peril to himself or herself, to preserve the secrets of his or her client. (See California Business & Professions Code section 6068(e).). London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 6 of 16

The New York State Unified Court System s Rules of Professional Conduct at rule 1.6 imposes a duty on a lawyer to preserve the confidential information of its clients. Under rule 1.6, confidential information consists of information gained during or relating to the representation of a client, whatever its source, that is (a) protected by the attorney-client privilege, (b) likely to be embarrassing or detrimental to the client if disclosed, or (c) information that the client has requested be kept confidential. This additional duty to protect client confidences and secrets extends beyond the requirements as set out in MRPC Rule 1.6(a), and compels the outsourcing attorney to take proactive steps to ensure the preservation of client confidential information. The San Diego Opinion comments on one unfortunate example of a breach of confidentiality involving an outsourced project subcontracted to India. There, the subcontractor threatened to post confidential patient records on the Internet unless the UC San Francisco Medical Center retrieved money owed to the subcontractor from a middleman. Attorneys need to carry out their own research into the confidentiality and security safeguards that the legal process outsourcing company with which they are contemplating contracting, has in place. Ensuring that potential providers internal information and facility security procedures meet the stringent standards imposed by the aforementioned organizations assists in compliance with this additional duty. Proactive steps can include requiring potential providers to demonstrate compliance with and/or certification by independent facility and security auditing bodies, such as SAS 70, IS0 27001, HIPAA or EU Safe Harbor. The US-EU Safe Harbor, for example, is a streamlined process for US companies to demonstrate compliance with the EU Directive 95/46/EC on the protection of personal data. Intended for organizations within the EU or US that store customer data, the Safe Harbor Principles are designed to prevent accidental information disclosure or loss. The Master Services Agreement with the LPO company should specifically address the issue of client confidential information. One area worth highlighting particularly in reference to an LPO engagement relates to the issue of subcontracting, a practice not uncommon within the LPO world. Taking into account that in virtually all legal outsourcing engagements, client confidential data will be involved, in the Master Services Agreement, subcontracting should be prohibited or subject to stringent approval requirements. Avoiding Conflicts of Interest The New York Opinion comments that New York Lawyers Code of Professional Responsibility at DR 5-105(E) requires a law firm to maintain contemporaneous records of prior engagements and to have a system for checking proposed engagements against current and prior engagements. Discussing the engagement of an LPO provider and the associated conflict of interest checking requirements, the Florida Opinion confirms agreement with the conclusions reached in the Los Angeles Opinion, which states that a lawyer s duties are that: [T]he attorney should satisfy himself that no conflicts exist that would preclude the representation. [Cite omitted.] The attorney must also recognize that he or she could be held responsible for any conflict of interest that may be created by the hiring of Company and which could arise from relationships London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 7 of 16

that Company develops with others during the attorney s relationship with Company. The outsourcing law firm/legal department should ask the LPO provider about its own conflict checking procedures and about how it monitors work performed for other clients. The outsourcing law firm/legal department should also ask the LPO whether it is performing or has performed services for any parties adverse either to the firm s clients or to the corporation itself. Furthermore, the outsourcing law firm/legal department should seek assurances that the individuals within the LPO performing the legal support service have never previously performed nor are currently performing services for any parties adverse to the lawyer s client or the corporation. To assist in fulfilling this obligation, it is highly recommended that the outsourcing lawyer develops a conflict of interest questionnaire for utilization in situations where he or she wishes to outsource work, either domestically or offshore. The master services agreement between the parties should make as a requirement of any retention of the LPO company, the satisfactory completion of the conflicts of interest check questionnaire. One as yet unresolved difficulty within the LPO industry is that it is commonplace for employees to sign comprehensive non-disclosure and confidentiality agreements with their LPO employers. This raises an issue with potential lateral movement across the LPO industry to other providers. Subject to their confidentiality agreement with previous employers, candidates may be unwilling to disclose pertinent information pertaining to previous client engagements. One possible solution is for the outsourcing law firm/legal department seeking to engage these resources to identify a hot list of potential conflicts, and the concerned employees can indicate in general terms as to whether any of the listed clients raise possible conflict concerns. Billing for Outsourced Legal Support MRPC 1.5 (a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The issue of how to bill appropriately for outsourced legal support services has not been determined definitively as yet. There is consensus across the ABA and individual State Bar Association Opinions that a simple pass-through of the cost of the services together with appropriate billing for supervision and overhead is permissible. However, the issue of whether a reasonable mark-up of the cost of the outsourced support is allowed warrants further debate. The Ohio Board comments that: The most straightforward approach may be for a lawyer or law firm to bill the client for the outsourced services as an expense based upon the actual cost of the service to the law firm, with an adjustment if necessary to cover a lawyer or law firm s costs of supervision of the outsourced services. The determination as to whether to bill for outsourced services as an expense (plus cost of supervision) or as part of legal fees, is according to the Ohio Board: left to a lawyer s exercise of professional judgment. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 8 of 16

In Formal Opinion No. 00-420, [6] the ABA concluded that a law firm that engaged a contract lawyer could mark up the cost provided that the total charge represented a reasonable fee for the services provided to the client. As dealt with earlier in the discussion surrounding the outsourcing attorney s duty to disclose, In the absence of an agreement with the client authorizing a greater charge (ABA 08-451), no mark up is permissible. This implies that in the presence of such an agreement that the question reverts back to simply whether the fee is reasonable pursuant to rule 1.5 MRPC. Whether billing as an expense or as part of legal fees, the overarching requirement identified by the ABA is that the fee charged should not be unreasonable and must be in keeping with the general requirements of Rule 1.5 as set out below: 1.5 (a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. Rule 1.5 is clear that not only shall a lawyer not charge or collect an unreasonable fee, but that they shall not make an agreement for one. There is no definitive answer as to what level of markup agreed to between a client and attorney would be considered as unreasonable. However, while the overhead costs involved in an LPO engagement may be minimal, there are other forces at play that justify a degree of markup. The engagement itself will no doubt be covered by the outsourcing law firm s own malpractice insurance policy and in addition there is the layer of supervision and project management that the firm will wish to have in place in governing the relationship. The available advice pertaining to the instruction of domestic based contract attorneys in no way implies that the firm cannot profit in any way from such an engagement when undertaken domestically, and the position is not substantially different when going offshore. The only difference is the degree of markup considered reasonable. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 9 of 16

A separate yet related point, and one worthy of debate, is whether there is a valid argument that given the requirement set out above not to charge an unreasonable fee, whether a US law firm is under a duty at the very least to inform their clients of the offshore LPO option for certain routine, commoditized legal tasks, such as first pass document review. If one works with the premise that offshore first pass document review is significantly more costcompetitive and also comparable in terms of productivity and quality, then if one doesn t inform a client that conducting first pass document review offshore is an option, how does this sit with one s ethical obligation set out in the Model Rules of Professional Conduct at Rule 1.5 not to charge or make an agreement for an unreasonable fee? Is it reasonable to assume that billing anything approaching AmLaw 200 junior associate hourly rates for first pass document review could be deemed to be an unreasonable fee, given the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly? This question warrants further debate. Malpractice Insurance and LPO Errors and Omissions It is incumbent upon US law firms and lawyers carefully to review the coverage and any associated limitations on their professional liability insurance. If the policy does not cover the instruction by the firm of temporary attorneys or non-lawyers, subject to adequate supervision by the firm s own lawyers, then in the event of an error or omission on the part of an LPO employee the firm will not be covered. Many malpractice insurance policies provide coverage to law firms for the acts and omissions of domestically engaged contract attorneys and will not preclude coverage based on a firm s engagement of foreign lawyers through an LPO. However, this can be easily and quickly clarified by addressing the issue with the insurer directly. The US lawyer seeking to engage an LPO as part of its own due diligence should determine whether the LPO company itself holds sufficient professional liability insurance. The market leaders routinely carry comprehensive liability insurance, however, if one takes a broad snapshot of the LPO provider market, and the plethora of smaller companies that have sprung into existence over the last 2-3 years, many of these do not. Export Control Regulations Meriting a separate discussion are the legislative barriers in place governing the outsourcing of patent support services overseas. In the US the Export Administration Regulations (EAR) govern the international dissemination of certain technologies. These restrictions also apply to technology and are not solely limited to tangible goods. Invention disclosures enabling the drafting of patent applications or the undertaking of certain types of patent searches may meet the definition of technology. For the purposes of this discussion technology is defined in the relevant regulations as specific information necessary for development, production or use of a product. 15 CFR 772.1. The Bureau of Industry and Security (BIS) is responsible for enforcing and implementing EAR, and has regulatory control over a vast array of technologies ranging from dual-use items to purely commercial goods. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 10 of 16

On July 23rd 2008 the USPTO released a notice titled the Scope of Foreign Filing Licenses. The notice reminds US patent attorneys and agents that a foreign filing license does not authorize them to send invention disclosures abroad to draft patent applications for eventual filing in the United States. The most relevant portion of the Notice states that: Applicants who are considering exporting subject matter abroad for the preparation of patent applications to be filed in the United States should contact the Bureau of Industry and Security (BIS )The BIS has promulgated the Export Administration Regulations (EAR) governing exports of dual-use commodities, software, and technology, including technical data, which are codified at 15 CFR Parts 730 774. Adhering to the BIS regulatory framework is absolutely essential for any organization interested in outsourcing patent support work to a foreign country. The regulations are also applicable to the outsourcing of documentation perhaps pertaining to an Intellectual Property litigation matter, when the particular documentation falls within the EAR definition of technology. Failure to comply with federal export regulations can result in severe fines and even imprisonment. Items subject to EAR are enumerated on the Commerce Control List (CCL). The CCL references a list of technologies (covered items) under the export control jurisdiction of the BIS. The CCL contains 10 categories of controlled items: Category 0 - Nuclear Materials, Facilities & Equipment (and Miscellaneous Items) Category 1 - Materials, Chemicals, Microorganisms, and Toxins Category 2 - Materials Processing Category 3 - Electronics Category 4 - Computers Category 5 (Part 1) - Telecommunications Category 5 (Part 2) - Information Security Category 6 - Sensors and Lasers Category 7 - Navigation and Avionics Category 8 - Marine Category 9 - Propulsion Systems, Space Vehicles and Related Equipment Following review of the above list it appears that numerous technical fields fall under the 10 categories listed in the CCL. US lawyers and patent agents engaging the services of an LPO for support in drafting patent applications must: London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 11 of 16

a. conduct an export clearance check/invention classification before sending invention disclosures overseas. b. seek the necessary clearance from the BIS if the export clearance check/invention classification reveals that the subject matter is a controlled item. The regulations governing the export of technology and the practical reality of the type of work most frequently outsourced should prevent US law firms and corporations from becoming overly discouraged with the consequences of potential export violations. Only information that is unpublished (not in the public domain) is restricted by US export controls. 15 C.F.R. 734 (EAR) and 22 C.F.R. 120.11 (ITAR). This means that many patent services and documentation relating to intellectual property litigation can be freely outsourced, even if the technology in question falls within the scope of the EAR. Patent application drafting represents only a tiny percentage of the work currently being outsourced overseas by US law firms and corporations. Invalidity, Freedom to Operate and Landscape searches, together with most novelty searching (subject to appropriate tailoring of the invention disclosure so as not to fall foul of the EAR), can all be freely outsourced, as can issued patent proofreading, file wrapper analysis and competitive research. UK Unlike the ABA and the individual Bar Associations, the UK Law Society has not provided any ethical guidelines that deal specifically with outsourcing of legal work offshore. Solicitors are free to outsource a wide variety of legal support work to paralegals, trainee solicitors, temporary solicitors and offshore resources, subject of course to adherence to the Solicitors Code of Conduct and the relevant obligations set forth therein. The rules impacting on outsourcing are detailed in Rules 1-5 [7] and deal with in particular; acting in clients best interests, providing a good standard of service, avoiding conflicts of interest, keeping client confidences and supervision. Rule 4: Confidentiality and Disclosure, 8(f) If you outsource services such as word processing, telephone call handling or photocopying you must be satisfied that the provider of those services is able to ensure the confidentiality of any information concerning your clients. This would normally require confidentiality undertakings from the provider and checks to ensure that the terms of the arrangements regarding confidentiality are being complied with. Whilst you might have implied consent to confidential information being passed to external service providers, it would be prudent to inform clients of any such services you propose to use in your terms of business or client care letters. Elsewhere the Law Society model client care letter and accompanying practice note [8] at s 4.1.7 indicate that outsourcing should be disclosed and informed client consent obtained, consistent with duty of confidentiality. 4.1.7 Outsourcing of work Where you outsource work on client files, there is a risk your outsourced provider may breach client confidentiality. Drawing attention to this risk may London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 12 of 16

mitigate any breach of confidentiality which then occurs, but you still risk a finding of misconduct or inadequate professional service. You should ensure that you have a confidentiality agreement with your suppliers. In your terms and conditions you should: advise the client if the practice outsources work and the type of work it outsources; alert the client to the potential risks in relation to preserving client confidentiality; ask the client to tell you if they object to this practice. The practice note suggests the inclusion in the client care letter of a paragraph seeking the client s informed consent. For example: Sometimes we ask other companies or people to do [typing/photocopying/other work] on our files to ensure this is done promptly. We will always seek a confidentiality agreement with these outsourced providers. If you do not want your file to be outsourced, please tell us as soon as possible. One particularly relevant section of the Code of Conduct is Rule 2.02 dealing with Client Care. On reviewing these rules it is apparent that any legal outsourcing arrangement necessitates careful thinking, and disclosure to and consent from the client. Client care (2) You must, both at the outset and, as necessary, during the course of the matter: (a) agree an appropriate level of service; and (b) ensure that the client is given, in writing, the name and status of the person dealing with the matter and the name of the person responsible for its overall supervision; and In the Guidance notes to Rule 2, it states at 2.02, 19: The status of the person dealing with your client must be made absolutely clear, for legal and ethical reasons. For example, a person who is not a solicitor must not be described as one, either expressly or by implication. All staff having contact with clients, including reception, switchboard and secretarial staff, should be advised accordingly. Rule 5 of the Code of Conduct deals specifically with Supervision. There are several references throughout Rule 5 dealing with the requirement to supervise when work is delegated to unqualified staff. The accompanying guidance notes to Rule 5 comment, 8. If certain work is to be done by unqualified staff it may only be done at the direction and/or under the supervision of persons who are allowed by law to do that work themselves. London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 13 of 16

And, 9. Under the rule practitioners are responsible for the acts and omissions of all staff, admitted and unadmitted alike. The duty to supervise staff covers not only persons engaged under a contract of service, but also those engaged under a contract for services to carry out work on behalf of the firm, e.g. consultants, locums and outdoor clerks. UK Data Protection Export Issues There are specific UK data protection law issues that arise as part of legal outsourcing engagements that impact on whether personal data can be exported to India the Philippines and other offshore destinations. It is beyond the scope of this paper to provide a rigorous examination of the relevant legislation; however it is important to cover the key points. The relevant piece of UK legislation is the Data Protection Act 1998 (the Act ) which implements in UK law the 1995 EU Data Protection Directive. The Eighth Principal of the Act states: Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data. As far as the export of personal data is concerned, India and the Philippines are not deemed to have adequate legal protections in place. There are however a number of methods available under the Act by which the requirements of the Eighth Principle can be met and the export of data to India and the Philippines be permitted. Some of these methods are as a matter of law deemed to be compliant with the Act. Other methods, involve making a determination that the approach taken is sufficient. The methods that involve a subjective determination as to their veracity clearly do not provide the same degree of certainty. The most common approach taken in legal process outsourcing engagements that involve the potential export of personal data to India or the Philippines is to incorporate into the Master Services Agreement with the client, what are termed the Model Clauses. This approach has been determined to be compliant with the Act. The Model Clauses have been approved by both the EU and the UK s Information Commissioner as sufficient to meet the requirements of the Eighth Principle. Conclusion The end result is thus essentially similar to that under the US rules. In both jurisdictions, whether within an individual State s Rules of Conduct or the ABA s Model Rules of Professional Conduct or in the UK, the Solicitor s Code of conduct, ethical rules exist that impact on a legal outsourcing relationship. These rules ensure that only a lawyer, licensed in the appropriate jurisdiction, practices law within that jurisdiction. Furthermore, if a legal outsourcing company is engaged to assist in the performance of a legal task, the outsourcing lawyer must ensure that adequate supervision is in place by a lawyer within the firm competent to perform the particular legal task and to evaluate the work undertaken by the legal outsourcing company. In addition, in the UK, as discussed above there is specific legislation in the form of the Data Protection Act that governs the transfer of data overseas. To London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 14 of 16

date the guidance from the ABA and in particular the Law Society has been limited to say the least. However, as the number and scale of legal outsourcing engagements continues to grow, and more firms and corporations publicly acknowledge their utilization of the LPO model, it is highly likely that more concrete, detailed guidance will emerge over the coming months. Disclaimer: This article contains suggestions and thoughts about legal ethics in the field of legal outsourcing. Nothing in this article should be construed as legal advice or be interpreted to advance a policy or impose a duty or obligation. All statements in this article are the opinions of the author. About the Author: Mark Ross is an experienced UK litigation solicitor, former partner at high profile UK law firm Underwoods Solicitors, and now Vice President of Legal Services at Integreon, the world s leading provider of legal and knowledge outsourcing services to major corporations and law firms. Mark s involvement in legal outsourcing dates back to Jan 2004 when Underwoods became the first UK law firm to outsource legal work to a lower cost common law jurisdiction. Chambers Guide 07 refers to Underwoods as a pioneer of legal offshoring. Mark was responsible for the development of the workflow system for outsourcing to the firm s South Africa office. Mark moved to Los Angeles in 2006 and joined LawScribe where he was responsible for Global Sales and Marketing, before moving to Integreon in November 2009. He is a recognized authority and thought-leader in the field of legal outsourcing. He has been published by, and interviewed for, numerous mainstream and legal publications, including TIME magazine, the UK Law Society Gazette, and the ABA s Law Practice Management. He is the former Chair of the International Association of Outsourcing Professionals Legal Outsourcing Chapter. He developed the first State Bar approved MCLE Ethics course, provided by a legal outsourcing company, on the ethical implications of outsourcing legal work. He subsequently created two further State Bar accredited courses dealing with patent support outsourcing and offshore document review. He has been invited to speak as a leading authority on legal outsourcing at conferences run by prestigious organizations including: Financial Times, U.C. Berkeley School of Law, American Lawyer, ALA, LexisNexis, the Sourcing Interest Group, Paralegal Superconference, ACI and IQPC. Mark can be contacted at mark.ross@integreon.com [1] Outsourcing Legal Services. The Law Report-Damien Carrick. ABC. Radio National W-D. 21 Feb. 2006. http://www.abc.net.au/rn/talks/8.30/lawrpt/stories/s1573652.htm [2] The Association of the Bar of the City of New York Commission on Professional & Judicial Ethics, Formal Opinion 2006-3 (2006); Los Angeles County Bar Association, Opinion 518 (2006); North Carolina State Bar, Formal Ethics Opinion 12 (2007); San Diego County Bar Association Legal Ethics Opinion 2007-1 (2007); Florida Bar Opinion 07-2 (2008); ABA Committee on Ethics and Professional Responsibility Formal Opinion 08-451 (2008). http://www.sconet.state.oh.us/boards/boc/advisory_opinions/2009/op_09-006.doc The Supreme Court of Ohio http://www.abanet.org/cpr/pubs/issue_index.html London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 15 of 16

[3] American Bar Association Model Rules of Professional Conduct http://www.abanet.org/cpr/mrpc/mrpc_toc.html [4] Pollak, Darya. I m Calling My Lawyer...in India!: Ethical Issues in International Legal Outsourcing. UCLA Journal of International Law and Foreign Affairs 11 UCLA J. Int l L. & Foreign Aff.99 (2006). [5] Offshore Legal Outsourcing: the Ethical Implications. (LawScribe MCLE Course handout) Glendale, CA: LawScribe, Inc, 2007. [6] ABA Formal Opinion 00-420 Surcharge to Client for Use of a Contract Lawyer http://www.abanet.org/cpr/pubs/issue_index.html [7] Rules 1-4, Solicitors Code of Conduct 2007. http://www.sra.org.uk/solicitors/code-of-conduct.page [8] Client care letters practice note (19 May 2009) s 4.1.7 (outsourcing of work), available at http://www.lawsociety.org.uk/productsandservices/practicenotes/clientcareletters/2810.article (accessed June 19, 2009) London Bristol Los Angeles New York Fargo Atlanta Cambridge Beijing Johannesburg Manila Mumbai New Delhi www.integreon.com 16 of 16

ETHICS OF LEGAL OUTSOURCING By Mark Ross: Vice President Legal Services, mark.ross@integreon.com

Integreon is the Leading Global Provider of LPO Solutions The most trusted global provider of LPO services to demanding professionals Pharmaceutical 3 of the top 6 pharmaceutical companies Law firms 32 of AmLaw 50 and 14 of UK top 50 Life sciences 15 of the top 20 life sciences companies Finance 9 of the top 10 global investment banks High-tech 3 of the top 5 US high-tech companies Consumer 4 of the top 10 global consumer brands and 11 of the top 50 550 strong LPO team globally including 400 attorneys North America Atlanta Boston Fargo Los Angeles New York Washington DC UK London Bristol South Africa Johannesburg China Beijing India Mumbai New Delhi Philippines Manila 2

In the News Microsoft has signed a deal with Integreon that will see the legal process outsourcing (LPO) company carry out further legal support services for the software giant. Microsoft signs up to outsourcing deal with Integreon 07 Apr 2010 By Jeremy Hodges www.legalweek.com For over three years now, the company has been quietly sending commoditised tasks such as document review out to lawyers at outsourcing provider Integreon in India. The arrangement was set up by Lovells, one of five 'chosen partner' law firms BAT regularly works with The smoking section British American Tobacco's GC in profile 24 Mar 2010 By Alex Aldridge www.legalweek.com PEARL provides experienced guidance and a unique strategy for managing the entire e-discovery process from identification and collection of data (Protiviti); processing (ACT Litigation Services, Integreon); review and production (ACT, Discovery Services Inc, Integreon), Pillsbury Launches Pearl To Contain Companies' Litigation Costs And Improve Results 29 Jan 2010 www.pillsburylaw.com Under a year-long agreement with outsourcing specialist Integreon, Simmons will employ five lawyers in Mumbai, who will work for the firm on a full-time basis. Simmons goes live with outsourcing project 16 Oct 2009 By Kit Chellel www.thelawyer.com [A&O] has partnered with LPO provider Integreon to outsource basic litigation document review to teams in New York and Mumbai, in what could generate a 30-50 per cent cost saving. 18 Nov 2009 By Luke McLeod-Roberts www.thelawyer.com 3

Legal Outsourcing is Nothing New Outsourcing is delegation Lawyers have outsourced for generations Difference today is in offshore legal outsourcing Ethical obligations differ depending on whether outsourcing substantive legal support services or administrative support Legal Outsourcing Raises real and perceived concerns Either way, they MUST be addressed. I do have concern about confidence, confidentiality, privacy, conflict of interest, ethical values, and those are issues that are a real concern. Jerome Shestack, former President of the American Bar Association "Outsourcing Legal Services." The Law Report-Damien Carrick. ABC. Radio National W-D. 21 Feb. 2006. http://www.abc.net.au/rn/talks/8.30/lawrpt/stories/s1573652.htm 4

Legal Outsourcing Ethics in the News Timeline of Events Bar Association Opinions(June 2006 August 2009) NMH vs. Bush and Acumen(June August 2008) USPTO Notice Scope of Foreign Filing Licenses (July 16, 2008) ABA Formal Opinion 08-451 Lawyer s Obligations When Outsourcing Legal and Nonlegal Support Services (August 5, 2008) ABA Summer Issue of International Lawyer - a lawyer could satisfy her ethical obligations and outsource work offshore." (June 2009) Four key issues identified: 1. duty of care in selection and supervision 2. duty to maintain confidentiality 3. duty to avoid conflicts of interest 4. duty to inform the client that the delegating lawyer is outsourcing the work Association of India Lawyers Madras High Court Petition Re UPL in India (March 2010) 5

ABA Formal Opinion 08-451 Lawyer s Obligations When Outsourcing Legal and Nonlegal Support Services May outsource provided U.S. lawyer remains responsible for rendering competent legal services Ensure conduct of lawyers or non-lawyers to whom tasks are outsourced is compatible with U.S. lawyer s professional obligations Retain direct supervisory authority Appropriate disclosures to clients Fees charged must be reasonable Avoid unauthorized practice of law 6

Bar Association Opinions on Legal Outsourcing Los Angeles County Bar Association Opinion No. 518 (June 19,2006) http://www.lacba.org/files/main%20folder/documents/%20ethics%20%20%20opinions/files/ethics_opinion_518.pdf The Association of the Bar of the City of New York Formal Opinion 2006-3 (August 2006) http://www.nycbar.org/publications/reports/print_report.php?rid=503&searchterm=2006 San Diego County Bar Association Ethics Opinion 2007-1 (January2007) http://www.sdcba.org/ethics/ethicsopinion07-1.htm Florida Bar Association (September 2007) http://www.floridabar.org/tfb/tfbetopin.nsf/searchview/ethics,+opinion+07-2?opendocument North Carolina State Bar, 2007 Formal Ethics Opinion 12 (April 2008) http://www.ncbar.gov/ethics/ethics.asp?page=2&keywords=outsourcing Supreme Court of Ohio Board of Commissioners on Grievance and Discipline Opinion 2009-6 (August 2009) http://www.sconet.state.oh.us/boards/boc/advisory_opinions/2009/op_09-006.doc 7

Avoiding Aiding and Abetting the Unauthorized Practice of Law The MRPC at 5.5 (a) states: A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction or assist another in doing so. Client cannot directly contract with offshore outsource provider Review the communications between and among outsource provider, attorney, and client Supervision and control by attorney for tasks that constitute ormay be deemed to constitute practice of law Ensure that outsourcing company assists California attorney in practicing law, NOT the other way round. 8

Supervision by Counsel & Responsibility for Work Delegated Malpractice Insurance read the policy consult with carrier Don t rubber stamp, take ownership U.S. attorney retains ultimate responsibility for outsourced work and is subject to the relevant State Bar Act and Rules of Professional Conduct relating to violation of professional responsibilities See for example www.calbar.org and www.nysba.org 9

Competent Representation MRPC 1.1 A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughnessand preparation reasonably necessary for the representation. Selection and evaluation of the outsource provider Due diligence: Investigate background info about offshore company Be aware of qualifications of individuals who will perform the work Obtain references of company/individuals assigned to perform the work Always interview the company in advance Request sample of work product that is comparable to your project Communicate with non-lawyer during assignment to ensure that the non-lawyer understands the assignment Review ethical standards with individuals who will perform the work and incorporate the standards into the terms of the contract with the company Knowledge of legal and factual issues sufficient to competently supervise Supervision of outsource provider s work ABA Opinion written confidentiality agreements 10

Duty of Communication Owed to Client Client s reasonable expectations Will confidences and secrets be disclosed? MRPC 1.6 Confidentiality of Information (a) A lawyer shall not reveal information relating to the representation of aclient unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b). Significant Developments Use by a California lawyer of services of non-lawyers may be deemed a significant development Significant Development Based on the facts of each case? Significant Development a function of client s expectations Non-lawyers often provide only basic legal support services BUT communication still owed to client if: Non-lawyers to play a significant role e.g. several hired for a document review Client confidences and secrets are to be shared Client s expectations are that only law firm personnel to handle matter Billing to be anything other than at cost 11

Conflicts of Interest (MRPC 1.7, 1.8) Florida Opinion - [T]he attorney should satisfy himself that no conflicts exist that would preclude the representation. [Cite omitted.] The attorney must also recognize that he or she could be held responsible for any conflict of interest that may be created by the hiring of Company and which could arise from relationships that Company develops with others during the attorney's relationship with Company. Ask outsourcing company about conflict checking procedures Do they keep a record of existing and former clients and client engagements? How does outsourcing company track work performed for other clients? Does the law firm need to screen foreign non-lawyer directly re previous engagements? Will provider turn down work? 12

Protecting Client Confidentiality and Client Confidences Extends Above and Beyond 1.6(a) Ohio Opinion: Client confidentiality is a hallmark of the attorney client relationship. San Diego Opinion states that an additional duty of an attorney who outsources, is to maintain inviolate the confidence, and at every peril to himselfor herself, to preserve the secrets of his or her client. (CA B & P Code section 6068(e).). New York State Unified Court System Rules of Professional Conduct, at Rule 1.6 imposes a duty on a lawyer to preserve the confidences and secrets of clients. Is client s consent necessary? Contract with outsourcing company to deal with client confidentiality Non-disclosure agreements signed between outsourcing company and law firm and if required with law firm s client Check whether outsourcing company s employees subject to NDAs and confidentiality agreements prior to employment Certification by independent auditing bodies, such as SAS 70, IS0 27001, HIPAA or EU Safe Harbor. The US-EU Safe Harbor is a streamlined process demonstrating compliance with the EU Directive 95/46/EC on the protection of personal data. Safe Harbor Principlesare designed to prevent accidental information disclosure or loss. 13

U.S. Lawyers Number One Concern Security and Client Confidentiality Physical On-Site Security and Workstation Measures ID required to enter premises, closed-circuit security cameras Biometric and key card access requirements Personal communications or data recording devices are not permitted All removable drives are disabled from the domain controller Users only entitled to use their own specific log-in details Hard-to-guess and frequently changed passwords Printing is disabled without prior authorization and clearance All incoming and outgoing mails are monitored on exchange server. Attachments are filtered Data Transfer Security Secured VPN tunnel (3DES encrypted) for server connectivity Clients access our secure FTP server with a confidential login Login information is changed routinely on a monthly basis Disaster recovery & backup arrangements. Backups performed at regular intervals throughout day Encrypted backup data stored on secondary servers offsite to protect against hard driver failure Continuous backup power is delivered to each server to protect against outages Backup facility with full security and systems located within five miles of current facility 14

Fee Agreements and Billing MRPC 1.5 (a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. Formal Opinion No. 00-420, ABA concluded that a law firm that engaged a contract lawyer could mark up the cost provided that the total charge represented a reasonable fee for the services provided. Agreements between the lawyer/law firm and the outsource provider (CRPC 1-320) Billing the client for outsource provider s services Can the cost of outsourcing be included in the attorney s legal fees? Direct cost, plus a reasonable allocation of overhead, or A reasonable mark-up? How should outsourced work be categorized on bills? Contingency Outsourced provider s fee cannot be based on percentage of contingency fee award ABA Opinion In absence of prior agreement cost plus reasonable allocation of associated overhead 15

Case Study: Blended Offshore/Onshore Document Review Class Action Document Review for a Global Technology Company Presentation Underlying matter is a putative class action alleging defects in design and failure of a consumer product Timeline for review and production on class certification is short (first production due within four weeks) and client demands lowest cost solutions for processing and review Data collection (26custodians) and pre-culling is client-managed in-house; data processing provider s solutions need to leverage this capability. Integreon EDD Solution e-discovery solution leverages client processes, using flexible workflow Pre-culled data goes into eview, is de-duplicated; reviewable volume reduced from 68 GB (uncompressed) collected data to <150,000 documents, and segregated by filtering into privilege-rich and privilegepoor assignments. Multiple teams are assigned specific data sets and QC tasks All Productions are managed by Integreon EDD, permitting counsel to direct rolling productions while review is in progress. Integreon Review Solution Offshore Initial Review Team conducts first level review over not-potentially privileged documents, to identify responsive and potentially privileged documents, and apply confidentiality levels; QC teams conduct targeted QC of responsive and potentially privileged documents identified by Initial Review. Onshore Privilege Team reviews privilege-rich assignments; subjects all marked potentially privileged to final review. 16

USPTO Notice July 23 2008: Scope of Foreign Filing Licenses Press Headlines: USPTO Ends Patent Outsourcing to India The facts! Notice does not change existing law Foreign Filing License allows export of subject matter abroad for purposes of filing foreign applications Foreign Filing License does not allow export of subject matter abroad for preparation of patent applications to be filed in U.S. Exporting subject matter abroad for preparation of patent applications to be filed in U.S. may require export license Contact the Bureau of Industry and Security (BIS) for the appropriate clearances BIS has promulgated Export Administration Regulations (EAR) for exports of subject matter abroad 17

USPTO Notice: Practical Guidelines Where technology is subject to the EAR then: Depending on the nature of the technology, its destination, the end-user, and the end-use, such technology might require a license from BIS prior to export (Alexander Lopes Director, Deemed Exports and Electronics Division at the Office of National Security and Technology Transfer Control Division January 11, 2006) Pursuant to EAR, technology is the specific information necessary for development, production or use of a product. 15 CFR 772.1 Tailor disclosures accordingly Request classification from BIS 18

Export Control Decision Tree Are your items and activities subject to the EAR? Is the technology publically available? Is the subject matter technology as defined by EAR: specific information necessary for development, production or use of a product. 15 CFR 772.1. If subject to the EAR and not publically available then classification of item on the Commerce Control List is necessary Classify yourself or with assistance of BIS BIS has a duty to provide a classification to you Determine if a License Exception is available If no License Exception is available you must obtain a license 19

Commerce Control List 0 Nuclear Materials, Facilities and Equipment and Miscellaneous 1 Materials, Chemicals, Microorganisms, and Toxins 2 Materials Processing 3 Electronics 4 Computers 5 Telecommunications and Information Security 6 Lasers and Sensors 7 Navigation and Avionics 8 Marine 9 Propulsion Systems, Space Vehicles and Related Equipment 20

IP Services Unaffected by the Notice? Invalidity Search: no requirement to export technology. Requiresresearch to invalidate an existing patent i.e. publically available information Proofreading issued U.S. patents: publically available information Freedom-to-operate search: export of technology either not required or capable of being tailored Office Action Responses: Office Actions available in the Public PAIR Patentability/Novelty Searches may not come within EAR definition of technology, or on CCL, and/or disclosure can be tailored so as to not infringe regulations 21

SAMEEP VIJAYVERGIYA: Dear Sir/Madam: I am a member of the bar in both the concerned jurisdictions and having seen the practice of law in both the countries, I find myself in a suitable position to comment upon the issue in question. Indian lawyers are competent enough to provide quality and address all other concerns including but not restricting to security, confidentiality, unauthorized practice of law etc:. Having said that I still have my doubts about all the above. The reason is not Indian lawyers, but entrepreneurs who do not have sufficient knowledge, skills and training. Being a lawyer is a way of life. We learn to think rationally and logically, yet hypothetically within the realms of ethics. Many of these entrepreneurs cannot understand the significance of lot of issues. They do not know the importance of confidentiality or what amounts to unauthorized practice of law. They would even engage non competent lawyers and/or unqualified paralegals etc: to save a few bucks, thus breaching every single obligation, we as lawyers owe to our clients. Also comes the question of responsibility. If there is a breach, who is liable? The entrepreneurs cannot be held accountable under ethics code, as they are not lawyers. To solve all these problems, I would like to recommend that outsourcing be allowed only by firms/ organizations where Lawyers are managing there operations. I would have gone on to state lawyers licensed in both jurisdictions (since they would be allowed to operate in India, yet they would be answerable in US and can be held accountable). However, I do not know the feasibility of the same in business terms and would therefore leave that open for your consideration. -- Sameep Vijayvergiya Attorney At Law (India, New York) Arbitration Consultant Mediator LL.M. Temple University, Philadelphia SALLY SCHERER: For what it is worth -- I am a State Bar Councilor in NC & was opposed to our adoption of an ethics opinion which, in effect, supports the outsourcing of legal work. I was not alone in my opposition. I have practiced primarily in criminal defense and family law, so I have never worked in a very large or corporate or civil defense firm -- those that claim a need to use outsourcing to cut costs for their clients. I once used a Virginia legal research company to do research on a family law issue. Licensed Virginia attorneys (purportedly skilled in family law) did the work, but I was so unhappy with their work product that I resolved never to do that again. And I have not, although I have used law students at several NC law schools to do research for me for a different case I took on pro bono. They did a magnificent job! I was, however, able to direct them during their work and to check their results, & I was the one who wrote the petition using, in part, their research.)

Relying on anyone who is not known and is not a member of one's firm or local bar is, in my opinion, asking for trouble. There is no way any lawyer can "oversee" -- directly or indirectly -- what a person is doing in another state, much less in India or some other country. I believe this outsourcing is not only unethical but also a breach of our basic obligation to our clients: to provide legal services for them. They have chosen us for a reason. It is our solemn obligation to give them the best we can. They do not appreciate what work is needed nor how it is done. They rely on our judgment. Work product from others (& we have no meaningful way to know whether that person is a lawyer or not) is simply not our own. To use it as such is misleading and wrong.

MICHAEL SCHWARTZ: I recently handled a substantial ethics case before the New Mexico Supreme Court. I can send you the briefs and the opinions. But due to their size, I will have to provide them through the equivalent of an FTP site. Are you interested? Has to do with outsourcing and charging lawyer fees for non licensed lawyers as well as charging lawyer rates for contract lawyers who are licensed. Michael Schwarz* Attorney & Counsellor at Law P O Box 1656 Santa Fe, NM 87504-1656 505.988.2053; 505.983.8656 (FAX) *NM Board Certified in Employment & Labor Law The information contained in this electronic message is protected by the Electronic Privacy Act, 18 U.S.C. 2510 et seq., the attorney - client privilege and/or work product doctrine. It is intended for the use of the individual and/or entity named above and the privileges are not waived by virtue of having been sent electronically. If the person actually receiving this message is not the intended recipient or employee or agent responsible for delivering it to the intended recipient, any use, distribution, or copying of this communication in error is strictly prohibited.

MICHAEL P. SIMKUS Ellyn: Thank you for speaking with me today. As I explained, for the past year, I have investigated and concentrated my investigation on outsourcing firms located in the Philippines, Singapore, China and India. The reason for my investigation was to develop an outsourcing company for document review services. I traveled to China twice in the past two years, as well as to India. Before becoming associated with any particular company, I researched the current state of the marketplace, the ABA and state/city opinions on outsourcing, the educational experience of the available personnel, the licensing requirements of the available personnel, the familiarity of any proposed staff with the Rules of Professional Conduct, the continuing education of licensed attorneys, the licensure of the foreign attorneys, as well as the various outsourcing business models. As a result of my research, I entered into a business relationship with one of India s leading technology companies, SourceHUB India SHI. SHI had developed its business model on the world s leading indexing technology no data ever leaves the United States, with further protecting it with encrypted, redundant and world class security protocols. SHI desired to expand its market presence and begin entry into document review services. [SHI and its sister company, Valuepoint, has over 900 employees and over $50,000,000 in revenue for its operations.] After discussing and formulating a corporate plan for document review services, we incorporated as a new company, SourceHUB GLOBAL SHG. We have an office in Lisle, Illinois and in Bangalore, India. SHG will commence document review with security as our foundation. We have hired 20 licensed Indian lawyers since we developed the business plan. All of the 20 lawyers have been in training since January. I have made two trips to Bangalore to oversee the training curriculum and will also return to India three or four more times in 2010. The training curriculum developed by me, includes, in no particular order: USA Legal System Overview; immersion in ABA Rules of Professional Conduct; week long instruction on Rule 1.5 and Rule 1.3; Federal Rules of Evidence; ABA Formal Opinion 09 455 and Rules 1.6, 1.7, 1.9, 1.10; Attorney Client Privilege and Work Product Doctrine; Imputed Disqualification; Conflict of Interest Inventory; Corporate Control Group Privilege; Self Critical Analysis Privilege; The Joint Defense Privilege; Standards of Professional Conduct under Sarbanes Oxley; Document Review 1.0; Document Review 2.0; Secure Indexing; Security and Technology Practice Pointers; Sedona Conference Selected Seminar Materials and Case notes; 7th Circuit Electronic Discovery Pilot Program; an Overview of American Legal Malpractice and Notable Ethical Opinions; and, several closed sample projects. Our team is just completing its training course of instruction. We will begin accepting assignments in the last week of May. All lawyers who join our team will need to complete our training course before they are allowed to join the floor. [No cell phones, Blackberries, iphone, ipods, memory devices, cameras or internet access is allowed on the floor. All USB ports are disabled on all computers. Again, no computer has any internet access. All documents rest on servers located in the USA. No document ever leaves the server. You might need me to

explain this procedure in detail. We only have licensed, in good standing, Indian lawyers who work on our document review floor. There is only one entrance, and it is only accessible by biometric thumb print. [You should also know that to join our team, the candidate must pass through our hiring process. Our hiring process is much more rigorous in India. That process includes a security level background check, drug testing, fingerprinting, credit and financial history and background to include one year of bank account information, employment and educational history and verification, spouse employment history, and personal/professional references.] We have two American lawyers who preside over our client s projects as the project manager. We wil hire a third lawyer shortly. [We have daily video conferences through the use of WebEx between our American team and Bangalore team.] I believe that the ABA questions are spot on. Hopefully, I answered most of the ABA questions. I thought that I should share with you some of the concerns of my earlier research. I believe that your committee should discuss and consider the following: Insurance: While most every American law firm carries Errors & Omissions insurance coverage, I discovered that few outsourcing companies carry any equivalent Errors & Omissions insurance. The outsourcing companies that advocate that they have insurance, upon further investigation, have nothing of the kind. Most have significant holes in their coverage blanket, if not a complete misunderstanding of Errors & Omissions coverage. Additionally, some have policies underwritten by insurance companies of the native country with no coverage that will respond to lawsuits brought in the USA. [I am preparing a short article on the need for lawyers and corporate legal departments to review the outsourcing company s insurance coverage pages closely. OUR company has a manuscript policy specifically written for us. It is not inexpensive. Our policy of insurance further defends any claim brought in the USA and provides indemnity limits $5m/$10M similar to the same insurance coverage American law firms provide their clients.]; Security: While there are several ethics opinions that address security, few outsourcing companies are in compliance with those ethic opinions and guidelines. From my review of those opinions and guidelines, it is important that the client service model put data privacy, security and protecting confidentiality at the forefront of the outsourcing model. Further, there is a model that mandates that no data leave the country of origin and such information be completely protected by encrypted, redundant and security protocols. [Our security model is in compliance with those ethic opinions and guidelines and uses technology for a more robust security model than the security precautions that American law firms and legal departments currently maintain.] Quality Control: From our review of outsourcing document review companies, we believe that it is critical that quality control be conducted by on shore American lawyers who maintain an active license, to include fulfilling continuing education requirements.

Conflict of interest: While interviewing members to join our team, we conducted a conflict of interest inventory that was very specific. We learned that several candidates expressed surprise at our inquiry, and further advised that none of our competitors did the same when they were hired at those competitor firms. We took the conflict of interest inventory just as if the new members to our team were lateral hires as the ABA and state guidelines treat hiring lateral hires or new lawyers to an American law firm or legal department. Jurisdictional issues: If the work is being performed for a client from Illinois, should Illinois Ethics Rules and Opinions apply? We think so. As important, where should disputes be resolved? Outsourcing Attorney Personnel: We found that several outsourcing companies do not maintain a staff and instead have independent contractors. Further, more than a few companies have independent contractors who work at home or outside of the outsourcing company s facility. We believe that lawyers and corporate legal departments should discover the employment hiring practices of the outsourcing company s attorney staff and also determine whether those attorneys are independent contractors or temporary employees. [We hire permanent attorneys to work at our central facility.] Pricing: The outsourcing company should fully disclose its pricing. That disclosure should discuss the need for specific software to be later purchased, the expense needed for documents to be prepared for document review, and how the outsourcing company charges its clients for expenses. Contracts, Indemnity Agreements & Clawback Provisions: This area should be fully discussed between client and outsourcing company before retention. Intellectual Property Security: This subject should parallel the above security systems. However, there should be further requirements for intellectual property matters. Attorney Oversight: While few law firms or legal departments visit the off shore site, technology exists that allows them to monitor the outsourcing company and might help fulfill an attorney s duty of oversight: an understanding of procedures and security; closed circuit television monitors; facility security; and, WebEx video conferencing. I trust that the above may help provide the committee. I am more happy to assist the committee. If you are aware of an ABA committee that specifically addresses outsourcing issues, please let me know. I would like to become involved. Thank you. Mike Michael P. Simkus General Counsel

J. DAVID SMITH: Dear Ms. Vera, I fear that outsourcing lawyering work and attorney jobs overseas is very damaging to the lawyering business. There are tens or perhaps hundreds of thousands of unemployed attorneys currently and far greater numbers underemployed struggling to survive in the United States. I find it abominable and disgraceful that the ABA does almost nothing to help them such as most importantly restricting the number of seats at United States law schools, refusing to certify additional law schools, and withdrawing certification from most existing law schools. As a practical matter, I believe most law schools should be closed as there simply is no need for anywhere near the numbers of lawyers currently existing. It is reprehensible that no effort is made to curb the massive excess number of United States lawyers. Further, it is reprehensible that no efforts are made to maintain what lawyering work there is in the United States. I am not a member of the ABA nor shall I ever be, however, I am a practicing patent attorney. Sincerely, J. David Smith

May 7, 2010 ABA Commission on Ethics 20/20 Attn: Natalia Vera veran@staff.abanet.org RE: Call for Comments Legal Process Outsourcing (Domestic and International) Dear Ms. Vera: As recognized authorities on freelance legal practice, we welcome the opportunity to comment in response to the Ethics 20/20 Commission s inquiry concerning domestic and international legal process outsourcing. Introduction In The End of Lawyers?: Rethinking the Nature of Legal Services, Richard Susskind posited that advances in legal technology will result in the increasing decomposition of the provision of legal services into component tasks that can be multi-sourced. Outsourcing subcontracting a process to a third-party company is one of these sourcing models. Thus, any changes resulting from the Commission s current study will have a significant impact on the future of the legal profession. Outsourcing isn t just for big firms, and it isn t new. Solos and small firms two groups that, together, comprise the majority of U.S. lawyers have long looked to their colleagues for assistance when the demands of an active law practice have required them to answer concurrent calendar calls in different courtrooms (or even counties), or to brief a dispositive motion for one client while trying a case for another. At the same time, ongoing dramatic shifts in the legal marketplace have made understanding outsourcing options increasingly important for firms of all sizes. Trends in the Legal Industry Two intersecting developments over the past several years are dramatically changing how law firms are structured and how legal services are provided to clients. Work-life

balance issues are pushing many highly-educated and experienced lawyers to quit traditional law firm employment in favor of alternative, flexible work arrangements. Simultaneously, as a result of the current economic downturn, clients are putting more pressure on law firms to reduce costs; corporate clients are moving their legal business from large national firms to smaller local firms with lower billing rates and more flexibility; and law firms are particularly hesitant to hire employees. To meet the demand created by these changes, there is a small but growing cadre of U.S.-based freelance lawyers who, enabled by technology, work on a project-by-project basis for other attorneys. The Commission must take into account the impact that its study will have on both the solos and small firms that outsource legal work and the U.S.-based freelance lawyers who serve them. Defining the Terms: Contract Lawyer and Freelance Lawyer Continued discussion of legal process outsourcing should include more precise terminology, which will facilitate a better understanding of the different business models that fall under the legal process outsourcing umbrella. In many segments of the legal industry (and even, to a certain extent, in the general lexicon) the term contract lawyer refers to an attorney or law graduate who works as an employee of a legal employment agency or LPO company. The agency or LPO provider, in turn, contracts with law firms for the use of its employees to perform work on a temporary basis. The agency or LPO provider bills the firm for the contract lawyer s time; it pays the contract lawyer a percentage of the hourly fee collected from the firm. To distinguish themselves from contract lawyers who work for agencies or LPO companies, many attorneys who provides services to law firms as independent contractors refer to themselves as freelance lawyers. This terminology has been gaining traction in the legal community. Freelance lawyers are entrepreneurs: they maintain their own offices, pay their own taxes, arrange for their own insurance and benefits, set their own schedules and fees, establish their own working conditions, pursue their own professional development and market their services directly to law firms and in-house legal departments. Some freelance lawyers rely on freelance work to pay the bills while building a more traditional solo law practice, while others in increasing numbers work exclusively as freelance lawyers. 2

Job Satisfaction Among Contract Lawyers and Freelance Lawyers In general, contract lawyers and freelance lawyers experience significantly different levels of job satisfaction and perform different kinds of work. Contract lawyers have little control over their careers; they sit and wait for their phones to ring with job assignments. Those assignments are usually document review or other routine process tasks, and a single large assignment may last for months or even years. Freelance lawyers, on the other hand, have a great deal of control over their careers. They employ the same practice management skills as lawyers in any other practice area to market their services, network, sharpen their skills and build successful businesses. They generally perform a wider variety of tasks, and deal with a wider variety of legal issues, than contract lawyers do. Like lawyers in other practice areas (who handle a number of open matters at any one time), freelance lawyers generally have multiple ongoing projects on their plates. Contract lawyers are unlikely to receive mentoring from the LPO companies that technically employ them or the law firms for which they perform work. By contrast, attorneys who hire less-experienced freelance lawyers often mentor the freelancers. Reports about the poor working conditions and career dead-ends awaiting contract lawyers are legion. This is especially true now, as law graduates struggle with overwhelming student loan debt and a tight job market. Blogs such as Temporary Attorney: The Sweatshop Edition explicitly solicit horror stories and seek help expos[ing] the nasty sweatshops, swindling law schools, and opportunistic staffing agencies. Most commentators on the contract attorney life write anonymously, afraid of being blacklisted from work assignments. By contrast, freelance lawyers who contribute to the public discourse surrounding the changing nature of law practice consistently express high levels of satisfaction with their careers. As entrepreneurs, they are happy to speak openly about their work. This anecdotal evidence is consistent with the results of the Gallup Healthways Well Being Index, a 2009 survey of over 100,000 people in 11 job categories. That survey found that business owners had the highest overall well-being score, followed closely by professionals, on a composite measure of six factors, including emotional and 3

physical health, job satisfaction, healthy behavior, access to basic needs and self reports of overall life quality. 1 This evidence is also consistent with the results of a 2005 U.S. Bureau of Labor Statistics study that examined several types of contingent and alternative employment arrangements. The Bureau found that fewer than 1 in 10 independent contractors said they would prefer a traditional work arrangement. 2 By contrast, 56 percent of workers employed by temporary help agencies wanted a traditional work arrangement. 3 Legal Outsourcing Patterns Our broad experience with freelancers, solos, and small firms nationwide reveals that solos and small firms approach outsourcing in a vastly different manner than larger firms. Solos and small firms that outsource legal work overwhelmingly employ U.S.-based providers. In light of the significant additional (and, we believe, warranted) due diligence burdens on foreign-outsourcing lawyers spelled out in ABA Formal Op. 08-451, this preference for domestic providers is not likely to change. The preference for domestic outsourcing is also driven by the nature of the tasks that solos and small firms are most likely to outsource. Many tasks these lawyers need help with (such as court appearances and depositions) cannot be performed remotely. Even for legal research and writing, a local freelance lawyer who is familiar with local court practices can provide added value. The location-independent tasks that solos and small firms outsource tend to be of a fairly substantive nature, with a focus on legal research and writing. By contrast, the primary location-independent task that large firms outsource is document review. Since advances in technology have made document review increasingly systematized and repetitive, firms outsourcing document review have little incentive to hire highly educated U.S. lawyers, at U.S. rates, to perform this work. Moreover, the sheer size of many document review projects makes it more efficient for large firms outsourcing such work to rely on LPO companies or staffing agencies that can quickly assemble teams of attorneys, rather than looking to solo freelance attorneys. Large document review 1 Brett W. Pelham, Business Owners Richer in Wellbeing Than Other Job Types (Sept. 16, 2009), http://www.gallup.com/poll/122960/business-owners-richer-job-types.aspx. 2 U.S. Dep t of Labor Bureau of Labor Statistics, Alternative EmploymentArrangements and Worker Preferences (July 27, 2005), http://www.bls.gov/news.release/pdf/conemp.pdf, at T.11. 3 Id. 4

projects also require standardized technology and security measures, which can more easily be provided by a single staffing agency or LPO company employing multiple lawyers than by independent freelance lawyers. ABA Formal Op. 08-451 We are in general agreement with ABA Formal Op. 08-451. We recognize that the same principles that allow firms to send legal work overseas have many beneficial implications American lawyers. First, these principles allow freelance lawyers to perform substantive and rewarding legal work without the trappings and long work hours expected of associates and partners at traditionally structured law firms. Second, they allow freelance lawyers to work for law firms in jurisdictions in which they are not admitted, thus greatly expanding their work opportunities. Finally, they allow law students and law graduates awaiting admission to develop their skills while performing substantive legal work under a lawyer s supervision. Moreover, because legal ethics committees in most states have not yet issued opinions that squarely address outsourcing, Op. 08-451 provides some measure of guidance for lawyers around the country. Respectfully submitted, Melody Kramer Amanda Mineer National Association of Freelance Legal Professionals Lisa Solomon Lisa Solomon, Esq. Legal Research & Writing Legal Research & Writing Pro 5

About Lisa Solomon Lisa Solomon was one of the first lawyers to recognize and take advantage of the technological advances that make outsourcing legal research and writing services practical and profitable for law firms of all sizes. Through Lisa Solomon, Esq. Legal Research & Writing (www.questionoflaw.net), she assists attorneys with all their legal research and writing needs, including preparing and arguing appeals and drafting substantive motions and trial memoranda. Through Legal Research & Writing Pro (www.legalresearchandwritingpro.com), she shows other lawyers how to start and run successful practices as freelance attorneys and teaches lawyers in all practice areas how to write more persuasive briefs. Lisa can be contacted at Lisa@QuestionOfLaw.net or by phone at 914-595-6575. About the National Association of Freelance Legal Professionals The National Association of Freelance Legal Professionals (www.naflp.org) provides support, education, business and professional development for freelance lawyers and other freelance legal professionals who offer services to law firms as independent contractors. The organization was founded in 2006 by Melody A. Kramer and Amanda L. Mineer, sole practitioners in San Diego, California who run hybrid law practices, mixing direct work for clients with freelance work for other law firms. Melody and Amanda have been quoted in articles about freelance lawyering by the ABA (Perspectives), National Bar Journal, and FreelanceSwitch.com. NAFLP can be contacted at Melody@NAFLP.org, by phone at 858-362-3150 or by mail at 9930 Mesa Rim Rd., Suite 1600, San Diego, California 92121. 6

STACY SPANN: Dear Ms. Vera, I am writing to express my opinion regarding the outsourcing of legal work. I am a graduate of a very expensive, prestigious, ABA-approved law school. As the awesome career opportunities so highly touted by this institution never panned out for me, I depend on document review work to make a living - so do many other attorneys who have attended ABA-approved schools, taken their states bar examinations and played by the rules of being a lawyer in the U.S., including those laid off from big law and those who are unable to obtain jobs due to the oversupply of lawyers in the U.S. which is only getting worse every year. I am very much against the outsourcing of legal work not just because it makes my life more difficult, but because I do not see how an organization like the ABA, which is supposed to represent the interests of lawyers in the U.S. could support such an idea. Not only does outsourcing destroy opportunities for American attorneys, I do not see how foreign-educated attorneys in other countries can provide the same quality of services to American clients that we can, as we are trained in American law in American law schools. Why doesn t the ABA start supporting attorneys here in the U.S. for a change? Why does the ABA keep accrediting law schools every year, some of very questionable quality, so that those who have attended school and graduated have over 40,000 new graduates to compete with for the few jobs available? When the ABA starts representing my interests, I will join the organization again. As of now, the ABA does nothing but help save money for big law, help law schools lie to more and more potential students each year, helping them to a lifetime of student loan debt, and then support the outsourcing of any possible lucrative work overseas. Thank you for your consideration. Stacy A. Spann QuisLex, Inc. QuisLex would like to thank the ABA Commission on Ethics 20/20 for the opportunity to comment on the offshore outsourcing of legal services. The ABA Standing Committee on Ethics and Professional Responsibility s earlier recommendations on outsourcing in Formal Opinion 08-451 strongly re-enforced our commitment to a number of our standard practices, including our continued dedication to high standards of security and confidentiality, implementation of our proprietary Six Sigma-based measurable quality processes, and strict adherence to ethics requirements. Headquartered in New York and with state of the art, secure, execution centers in India, QuisLex provides services to its clients in North America, Europe and Asia with its more than 300 permanent employees. Most QuisLexians have LLBs/LLMs from world-class law schools in India. Several QuisLexians also have LLMs/LLBs/JDs from the U.K., Europe and the U.S. In addition, we have a number of crucial stakeholders who support our services, including our Quality, Security, Technology, Process, Training, HR, Recruiting, and Project Administration groups.

QuisLex has consistently focused on delivering a high quality work product to our clients in a highly secure and ethical manner. All our practices go to reinforcing these fundamental requirements. We do not practice law nor do we aid in the unauthorized practice of law in any jurisdiction. We have a robust, proprietary real-time conflicts database. Prior to accepting any engagement, we perform conflicts checks at the client, project and employee level to confirm that we do not have any conflicts that would prevent us from working on a given matter. We also have a proprietary ISO 9001 certified quality management system that ensures that our work processes are systematic and organized as opposed to ad hoc and reactionary. We have always upheld the highest levels of security and meet all of the below international requirements: ISO/IEC 27001:2005 certified data security and information security management system with more than 130 internationally accepted security controls SAS 70 Type II entity ISO 9001:2008 certified world-class training program and processes EU Safe Harbor self-certified for data privacy HIPAA compliant in accordance with HCCO BA privacy certification requirements The guidance that QuisLex has drawn from the various ethics opinions on outsourcing, beginning with the New York City Bar Association Opinion in August 2006, through the ABA Opinion in August 2008, and continuing with the recent Ohio Supreme Court Opinion validate our emphasis, from inception, on security, quality and processes. We have spent a great deal of time and effort acquiring reputable third party certifications, and are governed by stringent internationally accepted audit guidelines and rules. For example, we demonstrated compliance with more than 130 internationally accepted security controls in order to obtain ISO/IEC 27001:2005 certification and recertification for our data security and information security management system. We have also successfully completed periodic audits of these controls. In addition to ISO/IEC 27001:2005 certification, QuisLex has received an Auditor s Report with an unqualified opinion after an AICPA SAS 70 Type II examination. This demonstrates the establishment of effectively designed control objectives and control activities. Our stringent adherence to these internationally recognized standards and certifications demonstrates to our clients that we conform with the highest standards and best practices that they are used to seeing. This is extremely helpful to them as they perform their due diligence when deciding to outsource work to us. Once again, we wish to thank the Commission for the opportunity to be heard on this issue. Our clients have benefitted greatly from our ability to provide consistently high quality work in a secure manner utilizing processes which have become or are now becoming the industry standard. We look forward to continuing our dialogue with you and stand ready to provide additional information should you require it. Thank you. Andrew Goodman Executive Director of Litigation Services

MARK S. WALTER: In the past few years, I have often wondered whom the ABA represents? It can t be the Legal community. Because of the ABA s incompetent action; I just can t compete. First, I have to compete with unlicensed attorneys practicing in India. These unlicensed people charge ¼ th the market rate processing everything from Document Review to Document Production. No other country is this stupid. Try and import India Legal work. Here s a clue; you can t; it s illegal! I used to complain about the paralegal setting up shop or form books; they re nothing. Second, I have to compete with online shops, e.g. legalzoom.com, which take out the basics that used to drive my practice: divorces, incorporations, wills, or UCC1 filings. Third, Law Schools. I don t know where to start. It seems that they keep popping up and we don t need them. They do nothing but saturate the legal job market. A few Law School deans have stated that their schools aren t really needed. I have seen the fields of I.T., Accounting, and Law trashed because of incompetent management. Like a lot of practitioners I have to sit down and do the nefarious calculus. I need to decide if I can stay in business. I like practicing Law, but I can t make a living at it. DAVID C. WELLS: I have been a small firm or solo practitioner for my whole 8 years of practice, and generally speaking I am horrified by the concept of legal process outsourcing. To try to answer your questions, I have outsourced work to other *local* attorneys and firms when I was overwhelmed with work, when I needed particular expertise beyond my own, and when I needed assistance with tasks such as document review and brief preparation. I have never outsourced legal work outside of my own community. I have outsourced in the early stages of representation (research into a particular claim), during discovery (document review, etc.), and in trial preparation (consulting re: jury trial preparation). The idea of outsourcing always came from me, in recognition that there were certain things I could not do alone. I discuss the possibility of outsourcing some work to other attorneys with my clients at the beginning of representation, with the understanding that I maintain discretion to select an outsourced attorney, but that under no circumstances will I charge the client a higher rate than my own for another attorney s work. I have chosen the handful of attorneys to whom I have outsourced work based exclusively on personal relationships and reputation. My experience with outsourcing has been a mixed bag. I have outsourced research on a simple legal claim in an area outside of my comfort zone, only to receive a generic and unhelpful answer with a bill for $1,000, and I have had experiences that were as good as the one described was bad. The bottom line is that, by outsourcing legal work, I give up control over time and costs, and I generally find the result unacceptable for my clients. Now then, the idea of outsourcing legal process work overseas horrifies me for the following reasons: 1. Legal work, a highly specialized and personalized profession, is being sent thousands of miles away to persons who did not attend ABA-accredited schools, did not take any particular state s bar exam, and did not take the MPRE. It depersonalizes the profession and it opens up a Pandora s box of ethics risk. If I feel a loss of control by outsourcing within the same city, you re talking about sending work to other continents. 2. Persons practicing legal work overseas are outside the jurisdiction of both professional rules of discipline and criminal law on the state and federal level. It is only a matter of time before someone practicing overseas engages in insider trading, converts client

assets, or misuses privileged client information. When that happens, the lawyers here in the U.S. will be left holding the bag. 3. The ABA and law schools all over the country are still encouraging law school enrollment at higher and higher rates. Actively encouraging outsourcing leaves an increasingly population of unemployed, and unemployable, new lawyers. I have practiced on a self-employed basis for my entire career, but I am not blind to the building crisis of overqualified and underemployed lawyers in this country. In summary, it is not accurate to say that legal process outsourcing is a minefield. A better analogy is a room full of exposed mines, with lawyers and big firms foolishly tapping on the triggers. Sincerely, David C. Wells