Ethical Considerations

The following is a general overview of those considerations primarily as they relate to the Model Rules of Professional Conduct, with some discussion of relevant state ethics opinions. However, this is not a comprehensive analysis of each state’s position on the ethical issues discussed herein. As with just about everything else in the law, positions on these issues vary from state to state and must be researched independently as to each state. Ultimately, the hiring law firm, as counsel of record, is responsible for ensuring it is meeting its ethical obligations.

In general, so long as proper procedures are followed, outsourcing work to a qualified outside attorney can be a great way to ensure the hiring firm is meeting its ethical obligations to its clients. In fact, it could be the most ethical option in many circumstances as outsourcing to a qualified outside attorney can mitigate the many ethical pitfalls that busy law firms face when they find themselves overextended.

Rule 1.1 – Competence: Am I fulfilling my Rule 1.1 duties by outsourcing to The Law Office of David Sulzbacher?

In applying Rule 1.1 in the context of retaining an outside attorney to provide research and writing services, the American Bar Association (ABA) has determined “[t]here is nothing unethical about a lawyer outsourcing legal and nonlegal services, provided the outsourcing lawyer renders legal services to the client with the ‘legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation,’ as required by Rule 1.1.” 1 The ABA asserted also that “There is no unique blueprint for the provision of competent legal services,” and “Rule 1.1 does not require that tasks be accomplished in any special way.” 2 In other words, you, the hiring firm, remain ultimately responsible for providing competent  representation to your client, but how you provide that representation is up to you, and hiring an outside attorney for a portion of the work is a perfectly reasonable manner in which to provide the representation.

The hiring firm must also “reasonably believe that the other lawyers’ services will contribute to the competent and ethical representation of the client.” 3 When you retain quality freelance legal services such as those provided by The Law Office of David Sulzbacher, you increase your efficiency and productivity while reducing your costs. This necessarily improves the overall quality of representation you are able to provide to your clients. Your ability to competently handle your cases when you become overworked, on the other hand, diminishes rapidly. If you are faced with the choice of being overextended or outsourcing to a qualified outside attorney, the latter option is the way to go to ensure you are meeting and exceeding your Rule 1.1 obligations.

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Rule 1.4 – Communication: Do I need to tell my client I have retained The Law Office of David Sulzbacher to work on the case?

Rule 1.4, the duty of communication, ordinarily requires obtaining client consent before sending work to an outside lawyer. 4 It is always a best practice to keep the client informed as to who is working on the case, and there is no downside so long as the benefits to the client (i.e. high quality research and writing, increased productivity, greater efficiency, and potentially lower costs) are adequately explained. Here is a Sample Letter to Client that you can use on your own letterhead to advise your client you have retained the services of this law office.

What is actually required in terms of disclosure varies around the country to some extent, but in 2012, the ABA made it clear that consent should be obtained prior to putting an outside attorney to work on the case. 5  In August, 2012, the ABA took a clear position in the Model Rules, inserting into the comments “[b]efore a lawyer retains or contracts with other lawyers outside the lawyer’s own firm to provide or assist in the provision of legal services to a client, the lawyer should ordinarily obtain informed consent from the client.” 6

Prior to adopting the 2012 amendments to its Model Rules of Professional Conduct, ABA Formal Opinion 88-356 posited that clients are not ordinarily entitled to be notified regarding whether a temporary lawyer is working on their case. The ABA held that disclosure to the client is only required where the temporary lawyer is working independently, without “close supervision” of a lawyer from the hiring firm. If there is “direct supervision” of the temporary lawyer’s work by a lawyer in the hiring firm, no disclosure to the client is required. 7 However, in Formal Opinion 08-451, the ABA noted that Formal Opinion 88-356 primarily addressed the use of traditional contract attorneys who are more like temporary employees working on-site under direct supervision. When an outside or freelance attorney is involved, on the other hand, the attorney operates with greater independence, thus requiring disclosure to the client of the freelance attorney’s involvement. 8

Various state ethics committees have reached divergent results. Kentucky, Alabama, New York, and Ohio, for example, have determined unequivocally that the client must be informed of the use of a temporary attorney on the case, regardless of the level of involvement and supervision. 9 In California, however, disclosure is only required when the outside or freelance attorney’s involvement “constitutes a significant development in the matter.” 10 In analyzing whether retention of the outside attorney is a significant development, California looks at the following factors: (1) whether responsibility for overseeing the client’s matter is being changed; (2) whether the freelance attorney will be performing a significant portion or aspect of the work; (3) whether lawyer staffing (or related costs) has been changed from what was represented to the client; and (4) whether staffing is different from the client’s reasonable expectation. 11 The District of Columbia, Illinois, and Pennsylvania came up with similar fact- based inquiries to determine when disclosure is required. 12

Rules 1.2(a) and 1.5(b) provide additional reasons for erring on the side of disclosure. Pursuant to Rule 1.2(a), attorneys have a duty to consult with the client regarding the means employed to pursue the client’s objectives. The decision to hire an outside attorney to work on a case may be the type of decision that warrants consulting with the client prior to enlisting the outside attorney’s services. 13 Rule 1.5 requires communication with the client regarding the basis or rate of fees charged. Bringing an outside attorney on board likely constitutes a change to the basis or rate of fees charged requiring communication with the client. 14

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Rule 1.5 – Fees: Can I profit from the work performed by The Law Office of David Sulzbacher?

The short answer is “yes,” unless you are located in Maryland or Texas. Rule 1.5 imposes the fundamental requirement that the ultimate fees charged to the client for the outside attorney’s services be “reasonable.” 15 The ABA has concluded that no ethical rules are violated when a hiring firm bills the client in excess of the actual fees billed to the firm by the outside attorney. 16 In other words, there is nothing wrong with profiting from the services of The Law Office of David Sulzbacher, so long as the rate billed to the client is “reasonable.” The ABA reasons persuasively that “[t]his is not substantively different from the manner in which a conventional law firm bills for the services of its lawyers. The firm pays a lawyer a salary, provides him with employment benefits, incurs office space and other overhead costs to support him, and also earns a profit from his services.” 17 The Virginia Ethics Committee added that “the ‘spread’ between the salary and the fees generated ‘is a function of the cost of doing business including fixed and variable overhead expenses, as well as a component for profit.’” 18 In order for profiting from the services of an outside attorney to be reasonable, however, the client’s justifiable expectation that the hiring attorney supervises the work of the outside attorney and adopts it as his or her own must be met. 19

The ABA has also stated that there is no ethical requirement that the client be advised as to the details of the financial arrangement between the hiring firm and the outside attorney, reasoning that no such information is relayed to the client in the context of the conventional law firm arrangement. 20 In other words, you do not have to tell your client the rates charged by The Law Office of David Sulzbacher for the same reasons you do not have to tell your clients the salary and benefits packages you give to your associates. This holds true as long as the arrangement between the hiring firm and the outside attorney does not involve a direct division of the actual fee paid by the client, such as in the case of a firm agreeing to pay the outside attorney a percentage of a contingency fee. 21

If the outside attorney’s fees are passed on to the client as a disbursement rather than as fees for legal services, however, the foregoing does not apply. 22 If fees charged by this law office are treated as a cost, rather than as ordinary attorney’s fees, no markup is permitted by the hiring firm.

Most states that have considered the issue have agreed with the ABA that firms may profit from services provided by freelance attorneys. 23 However, as mentioned above, there are two outliers. Maryland concluded in MSBA Eth. Op. 92-19 (1992) that outsourced legal work should be billed as a cost, not as a legal fee. 24 Because the work is billed out as a cost, no markup is permitted. 25 No substantive analysis is provided in the opinion to support this conclusion. Similarly, Texas State Bar Opinion No. 577 concludes that marking up fees charged by an out of firm lawyer is precluded by the prohibition on fee splitting. 26 These unfortunate decisions ignore the reality of the outside attorney-hiring firm relationship. The outside attorney bills the firm for his or her fees, which the hiring firm is required to pay under the terms of their agreement, irrespective of whether or how much the client pays. There are therefore no fees being split, as the ABA correctly concluded. Furthermore, there is no persuasive reason set forth in the Texas opinion for treating the outside attorney as different from an in-firm associate with respect to billing the client.

The upshot of it all is that Texas and Maryland have unfortunately taken positions that make hiring and working as an outside attorney in those states problematic. It should be noted that there remains a possibility that states which have not yet taken a position on the issue could agree with Texas and Maryland, but the overwhelming weight of authority, including the ABA’s amended comments to its Model Rules, is on the right side of this issue, rendering further adverse opinions highly unlikely.

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Rule 1.6 – Confidentiality: Is my duty of confidentiality implicated by hiring The Law Office of David Sulzbacher?

This office keeps all information provided by the hiring firm strictly confidential in the same manner it would if it were representing the end-client directly.

As a matter of practice, this office only obtains access to the information required to complete the assigned project, which often will not include confidential information. Nonetheless, the information provided may include confidential information for which the client’s consent would be required prior to disclosure.

Another confidentiality consideration to take into account is the security of the outside attorney’s file sharing and storing system. The Law Office of David Sulzbacher uses Sync.com for receiving and storing files, as it has been rated among the most secure cloud storage services for lawyers on the market.

My Freelance Legal Work Agreement (a sample of which is available here) also contains a confidentiality provision pursuant to which I agree to keep all information provided confidential, and you agree to only provide this office with the information required for the project at hand.

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Rules 1.7 and 1.9 – Conflicts of Interest: How do I avoid conflicts of interest when outsourcing to The Law Office of David Sulzbacher?

Even though an outside attorney does not communicate with the end-client, the client is deemed a client of the outside attorney’s for the purposes of Rules 1.7 and 1.9. 27 Accordingly, an outside attorney cannot work on cases for different firms where the end-clients could be deemed to be adverse to each other. 28 Likewise, an outside attorney cannot assume representation for one firm in a matter substantially related to (or the same as) a previous matter formerly handled for a different firm where the former and current client have materially adverse interests to each other. 29

The Law Office of David Sulzbacher keeps records of all matters on which work is performed, runs conflict checks in the same fashion as conventional law firms to avoid running afoul of Rules 1.7 and 1.9, and will decline work where a conflict appears to be present.

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Rule 1.10 – Imputation of Conflicts of Interest:  Will conflicts be imputed to my firm upon hiring The Law Office of David Sulzbacher?

Of critical importance to this office is avoidance of having conflicts imputed to or from hiring firms. The analysis of whether conflicts are imputed as between an outside attorney and a hiring firm turns on whether the freelance attorney is deemed to be “associated” in or with the hiring firm. 30 The most important factor in analyzing whether an outside attorney is “associated” in or with the hiring firm is whether the outside attorney has access to information relating to the representation of firm clients other than the client on whose matters the outside attorney is working. 31 The Law Office of David Sulzbacher goes one step further in ensuring that no “association” occurs by working with the hiring firm to ensure that only documents necessary for completion of the agreed upon project are disclosed. By limiting access to only the documents needed for the task at hand, The Law Office of David Sulzbacher is denied access to files that could create an association. This is easily accomplished with Sync.com or your preferred file sharing system. At the outset of the project, David will send you an email giving you access to a folder in his Sync.com account. You then simply upload the documents needed to complete the project to that folder.

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Rule 5.1: Responsibilities of Supervisory Lawyers: Am I responsible for monitoring the work I send to The Law Office of David Sulzbacher?

Rule 5.1(b) imposes on lawyers with direct supervisory authority over other lawyers the duty to take reasonable efforts to ensure that the lawyers being supervised are complying with the Rules of Professional Conduct. This Rule applies to the hiring firm – outside attorney relationship. 32 You, the supervising attorney, are therefore tasked with ensuring that you have delegated your work to an outside attorney who is competent to perform the work, and then to ensure that the final product is up to your standards. When you hire The Law Office of David Sulzbacher, you can be assured that the work is being performed by a competent professional who excels at legal research and writing tasks. But you do not have to take my word for it if you are unfamiliar with me or my work. The ABA recommends that hiring attorneys “consider conducting reference checks and investigating the background of the lawyer […] providing the services.” 33 The ABA does not require such reference checks, but rather only that you should “consider” performing such checks. In any event, you can see what other attorneys have to say about my services here or here, I can provide a list of references upon request, and you can read about my background, including reviewing my resume, here.

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Rule 5.5 – Unauthorized Practice of Law: Am I aiding and abetting the unauthorized practice of law if I retain The Law Office of David Sulzbacher to work on cases outside of Washington State?

The types of research and writing services this office provides ordinarily would not implicate Rule 5.5, as long as the hiring firm is licensed to practice in the jurisdiction at issue, supervises, adopts the work as his or her own, remains responsible for the work performed by the outside attorney, and does not hold the outside attorney out as someone licensed to practice in that jurisdiction. 34 Accordingly, I can provide my services to assist plaintiff’s and criminal defense attorneys nationwide.

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Professional Liability Coverage – What are the considerations with respect to malpractice insurance when I hire The Law Office of David Sulzbacher?

As you, the hiring firm, are ultimately responsible for the work, your malpractice carrier generally covers work sent to an outside attorney. However, your insurer should be notified of your use of an outside attorney. Hiring firms’ Insurers generally cover work performed by outside attorneys for no added charge. The Law Office of David Sulzbacher also has its own professional liability insurance policy, though all work provided by this office is to be covered by the hiring firm’s policy.
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1

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 08-451 (2008).

Id.

Model Rules of Prof’l Conduct r. 1.1 cmt. 6 (Am. Bar Ass’n 2012).

Id.

Id.

Model Rules of Prof’l Conduct r. 1.1 cmt. 6 (Am. Bar Ass’n 2012).

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 88-356 (1988).

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 08-451.

Oliver v. Board of Governors, 779 S.W.2d 212 (Ky. 1989); Ala. State Bar Office of Gen. Counsel, Formal Op. 2007-03 (2007); Ohio Bd. of Comm’rs on Grievances and Discipline, Informal Op. 90-23 (1990); Ass’n of the Bar of the City of New York Comm. on Prof’l and Judicial Ethics, Formal Op. 1989-2 (1989).

10 

Cal. State Bar Formal Op. 1994-138 (1994); Cal. State Bar Formal Op. 2004-165 (2004).

11 

Id.

12 

D.C. Legal Ethics Comm. Op. 284 (1998); Ill. State Bar Ass’n Op. 92-7 (1992); Pa. Bar Ass’n Legal Ethics and Prof’l Responsibility Comm. Op. 210-4

13 

See ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 08-451.

14 

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 00-420 (2000).

15 

Id.

16 

Id.

17 

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 08-451.

18 

Va. Legal Ethics Op. 1712 (1998).

19 

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 00-420.

20 

Id.

21 

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 88-356.

22 

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 00-420.

23 

Alaska Bar Ass’n Ethics Comm., Op. 96-1 (1996); S.C. Ethics Op. 10-08 (2010).

24 

Md. Ethics Op. 92-19 (1992)

25 

Id.

26 

Op. Tex. Ethics Comm’n No. 577

27 

Duet, Data Encryption in OneDrive for Business and SharePoint Online, Microsoft Technet (Aug. 4, 2016, 9:15 a.m.), https://technet.microsoft.com/en-us/library/dn905447.aspx.

28 

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 88-356.

29 

Id.

30 

Id.

31 

Id.

32 

Id.

33 

ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 08-451.

34 

Id.

35 

Id.; see also Ass’n of the Bar of the City of New York Comm. on Prof’l and Judicial Ethics, Formal Op. 2006-3 (2006).