Business Ethics Issue - Essay Example

Business Ethics Issue Order No. 272682 No. of pages: 5 1st 6530 There’s no prohibition against off -shoring legal services. However from an ethical standpoint, whatever occurs, the lawyer remains responsible for the quality of that work. (Allan Hutchinson) This is the enlightened view of a highly distinguished research professor named Allan Hutchinson, who belongs to the Osgoode Hall Law School at Toronto. In fact he has voiced the opinion of a larger group of people in general, because this approach is quite consistent, when considering the steps taken in the United States by the Bar committees that are in Los Angeles County, San Diego County and also New York City. With a struggling Global economy that is without a doubt, most challenging, there always seems to be other opportunities that constantly present themselves when a crisis occurs. In the legal services industry, this opportunity came in the form of legal process outsourcing (LPO). Many years ago, this was a small idea that brewed in the minds of a small group of people in the United States, but now it has become not only a booming industry, but also one that is thriving and expanding. This industry has spread in the last few years, to some of the most common law jurisdictions in both Canada and the UK. By the year 2008, the LPO industry has given employment to about thousands of legal personnel, not only in India but also in many other parts of the world, to those who are in need of legal services. Forrester has carried out research and in its Valuenotes Study called “Off-shoring Legal Services to India’ (2005) states that the money involved in legal process outsourcing services run into millions - $61 millions to be precise and say that the amount could rise to 605 million by the year 2010. The present times, are rather challenging and in trying to find good solutions for the struggling economy, in addition to the lagging legal industry, the best option that would serve the purpose and solve problems would be to outsource some of the legal jobs to low cost jurisdictions. Though for years now, many businesses use this simple labor strategy and continue to spread in competitive environments, yet the ethical issue involved here is that, this strategy is used as a sort of tool or weapon in the arsenal of any progressive business unit and the legal department is no exception to this rule. Another ethical issue is the costing or pricing of legal services. The salaries for lawyers abroad, are excruciatingly high. For example, the cost a junior lawyer from Canada would be $150,000 per annum, and a law would cost about $ 100,000 per annum. Rich clients do not mind of complain of the high fees for legal services but the majority find it to be quite expensive. The solution to this problem is outsourcing of off- shore legal personnel to carry out the much simpler and routine legal tasks and thereby cutting their costs considerably. The other side of the picture is not too rosy because of the ethical issues involved. Due to off- shore outsourcing of legal jobs, a major part of the population who have educated themselves to be lawyers or other personnel carrying out other legal duties, find themselves at crossroads after their education, in finding a suitable well paying job in the legal industry in their own country. Ethically, these people have every right in looking forward to a good job within their own country, but unfortunately due to outsourcing jobs from their country to other countries in order to cut costs, they are deprived of these jobs. The Payment for legal jobs outsourced from other countries is very much less when compared to the country from where the jobs are being outsourced. The ethical issue that arises from this is whether or not they should lower their salaries in order to secure a job. It is pretty clear that the standard of living differs among different countries. The standard of living of one country may not suit all because each country has its own standard of living. Therefore it is unethical to ask the worker to lower his wages in order to suit a particular industry. If he lowers his wages will the cost of living be changed to suit his needs? Certainly not! So it remains a catch 22 problem involving ethical issues. In trying to address the key issues surrounding the LPO, such as conflict regarding interest, unauthorized practice of law and confidentiality, the Bar Committees of the United States and others had given permission to outsource legal work to lawyers of other countries. In making a reference about the Bar opinion in New York City, Bruce A. Green, member of the Section of Litigation’s Council and also a professor at Fordham University School of Law, stated that such rulings “take settled principles and familiar rules and apply them to a slightly different setting”. Recently, the Bar Association of America described outsourcing as “a salutary trend in a global economy”; and stated that “outsourcing affords lawyers the ability to reduce their costs and often the cost to the client, to the extent that the individuals or entities providing the outsourced services can do so at lower rates than the lawyer’s own staff.’ In lieu of the tremendous changes taking place in the fields of technology, globalization and commoditization, the area of the global legal landscape and the traditional approach servicing legal commodities is being challenged. Since technology is making the law quite open and transparent on one hand and the customer becoming more sophisticated on the other hand, there is an increasing demand for much greater value for their money. This scenario makes it all the more difficult for legal departments as well as thriving law firms to turn a blind eye or ignore the industry of the LPO. Outsourcing is nothing but a “make vs. buy” option quite familiar to manufacturers all over the world. Though off-shoring of legal work is a sensible and efficient manner of reducing costs and turning around time, there are a lot of risks as well as ethical issues to be considered before taking the leap. Off-shoring parties are expected to strictly follow the code of ethics that are specified by the state bars. Hence, when LPO companies disburse work to foreign–trained, internationally based attorneys, overseeing or supervising of these jobs becomes murky for foreign attorneys in the U.S. in case a U.S. lawyer candidate is made use of in a foreign location, the ethical issue of a U.S. licensure comes under valid consideration. In the 2006 formal opinion occasion, the City of New York’s Bar Association declared that, ultimately it becomes the responsibility of the lawyer for every work product that is produced by a foreign agent, regardless of the expertise and experience level of the agent in question. Similar conclusions concerning the offshore of the LPO have been arrived at in the Bar Associations of San Diego, Florida and Los Angeles. The other ethical issues involved are providing a truthful, competent and comprehensive representation of the work to the client, while strictly maintaining client confidence. This becomes difficult and poses a great challenge, because the U.S. lawyer has to send the clients information overseas if he needs the job to be done. The general rule is that in case a foreign attorney who does not have a U.S. license has to be closely reviewed and monitored by the U.S. lawyer assigned on the job. However there is no fool – proof way of finding out how far this duty is being carried out because the foreign agent carries out the preparation of the projects, thousands of miles away in his own office and is not under direct supervision. Also the issue of whether the client should be informed of using an off- shore agent and getting a consent is a valid point to be considered. Though there are no hard and fast rules in off-shoring work, it is always safe and in the best interest of the U.S. attorney to procure an informed consent from the client, since he is the person that would ultimately be held responsible for any breach of trust, liability of risk and confidence that may arise. In addition to all the above ethical issues involved another important point to be considered is the lack of high standards of regulation of the LPO industry which could pave the way for all the above ethical issues. References Assoc. of the Bar of the City of New York Comm. on Prof’l and Judicial Ethics, Formal Op. 2006-3 (2006) (discussing issues related to outsourcing in general and off-shoring in particular). Prof’l Ethics of the Florida Bar, Proposed Advisory Op. 072 (2008) (discussing ethical issues related to off-shoring and LPO). San Diego County Bar Assoc., Legal Ethics Op. 20071 (2007) (discussing ethic issues related to LPO). “Recession” “Depression” “Unemployment” “Melt Down” “Crisis”…… www.slaw.ca/2008/12/20/“recession”-“depression”-“unemployment”-“meltdown”-“crisis” Anita Ramasastry, Risky Business? How Multinationals’ Outsourcing Involving Customer Data Can Lead to Identity Theft and Other Fraud, FindLaw, July 10, 2006, http://writ.news.findlaw_coraasastrl2000710.html. Greg Chabon. The Rewards and Risks of Outsourcing Legal Work www.wcsr.com/resources/pdfs/Chabon_LegalProcessOutsourcing_Dec08.pdf Read More