Is a Law Firm Required to Notify its Client that it is Using a Freelance Lawyer to Assist on a Matter?

This blog post is the fifth in a series of eight updated posts summarizing the ethical rules that come into play when a law firm outsources legal work to a freelance/contract lawyer.  See Ethics Rule #1 (Conflicts of Interest), Ethics Rule #2 (Aiding and Abetting), Ethics Rule #3 (Duty of Competence), and Ethics Rule #4 (Client Confidences).

Freelance Lawyering Ethics Rule #5: Is a law firm required to notify its client that it is using a freelance lawyer to assist on a matter?

Take Away: A hiring lawyer generally does not have a duty to notify its client when he or she is using a freelance lawyer on a matter unless the representation constitutes a “significant development.”  Whether the freelance lawyer’s assistance constitutes a significant development may depend on a variety of factors, such as the extent of the contract attorney’s involvement in the case, the type of work the contract attorney is performing, and the expectations of the client regarding the representation. Clients never like surprises, so notifying a client that an experience freelance lawyer will be working on a particular matter is recommended.

Maintaining a balanced caseload can be a struggle for law firms.  Manageable cases can heat up unpredictably and can quickly become overwhelming.  Despite inevitable rushes and emergencies, law firms may be reluctant to outsource because of questions regarding client disclosure.

In general, law firms have a duty to keep their clients informed about any material developments in their case and to provide competent and diligent representation. California Rule of Professional Responsibility 1.4 states: “A lawyer shall keep the client reasonably informed about significant developments relating to the representation, including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed.” Similarly, Business and Professions Code section 6068(m) states that an attorney has a duty “[t]o respond promptly to reasonable status inquiries of clients and to keep clients reasonably informed of significant developments in matters with regard to which the attorney has agreed to provide legal services.” According to COPRAC Formal Opinion 2004-165, these authorities require a lawyer to inform a client that he has hired an outside lawyer or firm if the use of the outside lawyer or firm is a “significant development.”

Whether hiring a contract attorney rises to the level of a material development that requires disclosure to the client may depend on a variety of factors, such as the extent of the contract attorney’s involvement in the case, the type of work the contract attorney is performing, and the expectations of the client regarding the representation. COPRAC Opinion 2004-165. COPRAC Opinion 1994-138 enumerates examples of relevant factors in determining whether a firm is required to disclose the contract attorney relationship, including: (i) whether responsibility for overseeing the client’s matter is being changed; (ii) whether the new attorney will be performing a significant portion or aspect of the work; or (iii) whether staffing of the matter has been changed from what was specifically represented to or agreed with the client. Further, COPRAC Opinion 2004-165 held that the determination as to whether a development is “significant” is not only a function of the three factors discussed in Formal Opinion 1994-138, but also whether the client had a “reasonable expectation under the circumstances” that a contract lawyer would be used to provide the service.

SDCBA Opinion 2007-1 further analyzes COPRAC Opinion 2004-165, and finds that the question should not be limited to whether the service to be “outsourced” technically involves the practice of law – “to the contrary, the duty to inform the client is determined by the client’s reasonable expectation as to who will perform those services. Therefore, if the work which is to be performed by the outside service is within the client’s ‘reasonable expectation under the circumstances’ that it will be performed by the attorney, the client must be informed when the service is ‘outsourced’.”

Because a “significant development” depends on specific facts, best practices and the applicable ethical rules and opinions suggest that firms keep clients informed when using outside attorneys on their matters beyond small tasks such as basic research and writing. This may be as simple as including a provision in your client engagement letter.