American Bar Association Opinions Allow Firms to Earn Income from the Work Performed by a Freelance Attorney.
Posted on June 18, 2012
In the last decade, technology and globalization have changed our lives and how business is done. The practice of law has not been immune from these changes, as “outsourcing” by large law firms of document review to countries such India is no longer unusual and an alternative model for law firms has now evolved with the firm Clearspire in Washington, D.C. being staffed by lawyers working from “virtual offices” in the region.
The concept of outsourcing has spread to legal research and brief writing, where smaller firms send overflow work or that needing an otherwise unavailable expertise to freelance attorneys in the United States who work from virtual offices unburdened by the high overhead costs of running a formal legal practice.
The American Bar Association has released two formal Opinions that support a law firm’s outsourcing of work to a freelance attorney. ABA Opinions 00-420 and 08-451 provide that attorneys may ethically outsource work to a freelance attorney and that when billing the client, a surchage may be added to the freelance’s attorney’s fee when the total sum is considered a fee for legal services and the entire amount is reasonable. Opinion 00-420 provides:
Subject to the Rule 1.5(a) mandate that “a lawyers fee shall be reasonable,” a lawyer may, under the Model Rules, add a surcharge on amounts paid to a contract lawyer when services provided by the contract lawyer are billed as legal services. This is true whether the use and role of the contract lawyer are or are not disclosed to the client. The addition of a surcharge above cost does not require disclosure to the client in this circumstance, even when communication about fees is required under Rule 1.5(b). If the costs associated with contracting counsel’s services are billed as an expense, they should not be greater than the actual cost incurred, plus those costs that are associated directly with the provision of services, unless there has been a specific agreement with the client otherwise.
(Emphasis added). Opinion 08-451 gives further explanation:
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. This 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; the client generally is not informed of the details of the financial relationship between he law firm and the lawyer. Likewise, the lawyer is not obligated to inform the client how much the firm is paying a contract lawyer; the restraint is the overarching requirement that the fee charged for the services not be unreasonable. If the firm decides to pass those costs through to the client as a disbursement, however, no markup is permitted.
Thus, there are many benefits to a small firm from occasionally using the freelance legal writing service Appeals and Briefs by Michael Skotnicki, Esq., including the following:
- the client receives a quality brief prepared by a skilled litigator and experienced appellate attorney;
- the attorney in the firm who would otherwise perform the work is able to devote his or her time to other fee-generating matters; and
- the firm is generally able to add a surcharge to the reasonable fee charged and thus earn income from the work of the freelance attorney.
If you feel you need help writing or editing a brief, contact me through the web site for my freelance legal writing service, Appeals and Briefs by Michael Skotnicki, Esq., found either through clicking the logo on this page or via this link, www.appealsandbriefs.com.