Solo Practice

Legal Writing Expert Lisa Solomon Opines on ABA Opinion on Outsourcing

Last week, I posted about a recently released ABA Opinion 08-451 on the ethics of outsourcing.  At the time of the post, I didn't have the opinion and griped that the ABA would issue a decision of such potential consequence and fail to make it publicly available.  In the absence of the decision, I relied on a news summary which suggested that mark-ups on contract lawyer fees might not be permissible in some circumstances.

The opinion has since been made available - and you can access both the actual decision as well legal research and writing expert Lisa Solomon's extensive analysis at her Legal Research and Writing Pro blog.   On the issue of mark-ups, Lisa explains that lawyers may include a surcharge on contract lawyers' fees, so long as the overall fee is reasonable and the costs are billed as legal fees, rather than disbursements (i.e., expenses).  Where contract lawyer fees are billed as disbursements, the hiring firm is generally prohibited from marking up the cost, except to recover related costs such as supervisory costs and overhead -- i.e., a pro rata share office space for contract lawyers.  The opinion adds that where contract lawyers provide work offsite, it is unlikely that any overhead costs would be incurred.

Lisa applauds the ABA's decision, and now that I've been able to actually read it (yes, ABA and bar commissions, some of us actually read your opinions!), I agree.   Moreover, by making a distinction between disbursements and legal fees, the decision addresses one of my original concerns:  the substantial mark up of $30/hr contract lawyers who sometimes perform tasks that (in my view) aren't properly classified as legal work would not enjoy the benefit of the mark-up (unless the firm's retainer agreement permits it to add a surcharse to disbursements).  At the same time, by allowing lawyers to earn profit from contract lawyers performing real legal work, the ABA decision gives lawyers incentive to outsource, which frequently results in clients receiving better quality work at a lower cost.

By the way, if you are interested in building a contract lawyering practice, Lisa's Legal Research and Writing Pro site (and related products and coaching service) is the place to start.

Full post as published by My Shingle.com on September 01, 2008 (boomark / email).