Lawyer Raises Constitutional Question about Legal Process Outsourcing

Ann All

I wrote last spring about India's coming growth in knowledge process outsourcing, in particular in the area of legal outsourcing. As if to confirm the trend, Indian outsourcing giant Infosys Technologies launched a division devoted to legal process outsourcing in late 2007.


At least one attorney practicing in the U.S. took note of the trend and didn't like what he saw. Now Maryland lawyer Joseph A. Hennessey wants a federal judge to decide whether offshoring legal work constitutes waiving attorney-client privilege and Fourth Amendment protection from unreasonable search and seizure, since the U.S. government can conduct surveillance of communications between U.S. residents and foreign nationals.


Bethesda-based Newman, McIntosh & Hennessey LLP, Hennessey's employer, filed a complaint for declaratory judgment and injunctive relief in the U.S. District Court for the District of Columbia, reports The Maryland Daily Record. The law firm also wants the ethics committees of the Maryland State Bar Association and the D.C. Bar to issue an opinion.


The MSBA has declined to do so, both because the matter is in litigation and because it involves "political issues that are really not the purview of the committee," says the chairman of its ethics committee.


According to Hennessey's complaint, offshoring legal work "would nullify the reasonable expectation of privacy that American citizens -- litigating purely domestic disputes in U.S. Courts -- would have in the documents that they produce in the course of civil litigation."


President Bush and the Indian and American offices of Acumen, a legal outsourcing company that apparently pitched its services to Newman, McIntosh & Hennessey, are named as defendants in the complaint. Additional defendants include John and Jane Doe lawyers, whom the complaint defines as either competitors of Newman, McIntosh & Hennessey or opposing counsel. Hennessey said he wants to know whether opposing counsel would need to obtain his consent before outsourcing data that could be intercepted by the U.S. government and shared with its allies.


Addressing Hennessey's concerns, the VP of sales and marketing for LawScribe, a company that provides legal process outsourcing, says the sector's usual practices "almost make it a moot point." For instance, it's usually corporations rather than law firms that contract with outsourcers. Simply hiring such a provider qualifies as consent to any waiver of attorney-client privilege.


William A. McComas, a partner in Shapiro, Sher, Guinot & Sandler P.A. who writes about the law and technology, said law firms that outsource should consider moves such as requiring clients to sign a waiver before representing them. He noted that, to address client concerns about e-mail security, he began including in client retention agreements a statement that, unless he specifically informs clients otherwise, he will use e-mail to communicate about their cases.


Andrew M. Perlman, a Suffolk University Law School professor quoted in the story, says the federal court may decline to consider the matter because judges generally prefer to focus on areas in which there is no clear present dispute and the plaintiff is simply seeking an answer to a question.

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Jun 3, 2008 1:10 PM Kaviraj Singh Kaviraj Singh  says:
The New York State Bar Association has issued the guidelines / papers for legal outsourcing during the last years. Yes, we do agree that there are many that need to be addressed for legal outsourcing to India or elsewhere. Trustman is full service law firm based at Delhi, India.www.trustman.orgwww.delhilaw.firm.in Reply
Jun 4, 2008 11:28 AM Gary Zeiss Gary Zeiss  says:
It is my understanding that Mr. Hennessey sued the President and a broad cast of characters, among others, in this suit. That is a shame, as it turns the suit into a rather clownish exercise.I do think that the issue does need addressing, however, and I think that some of the LPO's who, essentially, poo-pooed this issue are making an error. Why? Because no one has really done an analysis of how the Patriot Act and other surveillance laws imposed since 9/11 really affect the business community.Furthermore, I don't think it is enough to simply say that the NSA/CIA/FBI don't have an interests in this information and that its gathering is unlikely - because that fails to answer the base question - what happens if they stumble across it?In our race to protect ourselves from "the terrorists," bad laws were enacted. The full effect of these laws won't be known until they are tested in the courts. While I agree, ultimately, that LPO businesses will survive and the law will be narrowed, I also think that legal certainty would both help the industry and its customers.I simply wish that getting that clarity wouldn't take the years necessary for even a good case to run its course.Best,Gary. Reply
Jun 13, 2008 10:16 AM Hiren Patel Hiren Patel  says:
My colleague Michael Geske prepared a response addressing NMH's claims. The approach NMH has taken and the requests they have lodged with the ethics committees and the DC court have consequences significantly beyond the LPO industry. The full text of Geske's response can be found here:www.aphelionlegal.com/News/NMHResponse.htm Reply
Jun 20, 2008 8:01 AM Gary Zeiss Gary Zeiss  says:
Mr. Geske certainly gives a spirited response to the NMH lawsuit - but it is a response that fails to address the underlying issue brought up by NMH - "is privilege waived when using offshore legal services?"The problem with Mr. Geske's responses is that it falls into the category of "everyone does it, and therefore it cannot be wrong." But it does not answer the question.While LPO services are growing, there is noted reluctance in the marketplace that is, in large part, caused by uncertainty regarding issues such as privilege, information security and privacy. Uncertainly breeds reluctance - it simply becomes too expensive to insure against the multitude of perceived risks.Absent a prohibition, clear direction from the bar associations and courts will likely help rather than hurt the LPO industry as it will provide certainty that can be priced into the model. While it would be better to get clear guidance without having to file suit, such guidance has been slow to come. Reply
Aug 15, 2008 1:03 PM Russell Smith Russell Smith  says:
-- any examples of actual or impending conduct within the District of Columbia by any of the parties;-- any relationship or interaction of any kind among any identified persons or entities in the District of Columbia or anywhere else, except for the unsuccessful solicitation sent by Acumen in India to NMH in Maryland;-- any monetary dispute or requested monetary relief that could support the amount in controversyrequirement for NMHs assertion of diversity jurisdiction;-- any legal or factual basis upon which this court could grant the sweeping declaratory and injunctive relief sought against millions of non-parties, such as every lawyer in the United States, and every foreign legal outsourcing company;-- any reason why NMH cannot avoid the speculative dangers it alleges by simply (a) continuing to refrain from using foreign legal outsourcing providers, and (b) seeking a protective order in any litigation where NMH believes that its clients data may be sent by adversaries to such providers;-- any legal or factual basis upon which the court could require the Executive Branch to prevent the waiver of Fourth Amendment rightsor safeguard the attorney-client privilege and client communications and client confidences and secrets;or-- any reason why protection is needed beyond the statutory protection already provided by Congress, under which no otherwise privileged wire, oral, or electronic communication intercepted in accordance with, or in violation of, the applicable government surveillance provisions shall lose its privileged character. See e.g.18 U.S.C. 2517(4);50 U.S.C. 1806(a).In short, as further discussed in the remainder of this brief, NMH has not come close to meeting the most basic requirements for standing or personal jurisdiction.


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