May a Colorado lawyer outsource legal work to temporary lawyers licensed elsewhere or in a foreign country?

Plain-English summary

Opinion 121 supplements CBA Formal Opinion 105 by addressing temporary lawyers who are licensed only outside Colorado, including lawyers licensed in foreign countries. The Colorado lawyer must confirm that the provider is licensed and in good standing, is competent for the assigned work, and will be supervised in a manner consistent with Rules 1.1, 5.1, and 5.3. For a foreign professional, the lawyer must also determine whether the person belongs to a recognized legal profession; otherwise the person must be treated and supervised as a nonlawyer.

The hiring lawyer must determine whether the work constitutes the practice of law in Colorado and, if so, whether it is authorized, because Rule 5.5(a)(3) prohibits assisting unauthorized practice. The lawyer must also check the temporary lawyer's conflicts and decide, under the functional approach from Opinion 105, whether the lawyers are associated in a firm for Rule 1.10 imputation. Confidential information may not be disclosed merely for convenience, and the opinion follows ABA Formal Opinion 08-451 when the outsourcing relationship is attenuated.

Fees remain subject to Rules 1.5 and 5.4. Payment is not a division of fees when the firm must pay the temporary lawyer regardless of client payment and compensation is not tied to the amount the client pays. A markup is permitted, but the resulting fee must be reasonable, and no legal fee may be shared with a provider who is not a lawyer. Whether the arrangement must be disclosed depends on the circumstances and the client's expectations; the opinion concludes that outsourcing to an unaffiliated foreign lawyer will be a significant development requiring disclosure in most cases.

In practice

Under Opinion 121, outsourcing does not transfer the Colorado lawyer's responsibility for the representation or final work product. The arrangement must be evaluated through competence, supervision, confidentiality, unauthorized-practice, conflicts, fee, and client-communication rules, with closer scrutiny when the provider is remote, foreign-licensed, or not part of a recognized legal profession.

Common questions

Q: Must the Colorado lawyer verify a foreign lawyer's credentials?

A: Yes. The opinion requires reasonable steps to confirm that the person is a member of a recognized legal profession, is authorized to practice in that jurisdiction, and is competent for the assignment.

Q: Does outsourcing automatically require client consent?

A: Not in every case under this opinion. Disclosure is required when outsourcing is a significant development in the representation, and the Committee concludes that unaffiliated foreign outsourcing will meet that standard in most cases.

Q: May the firm mark up the temporary lawyer's cost?

A: Yes, but the total fee must be reasonable under Rule 1.5(a). The opinion notes that a large difference between the provider's compensation and the client charge can bear on reasonableness.

Q: When is payment to the temporary lawyer a division of fees?

A: The opinion treats payment as not dividing a fee when the firm owes the temporary lawyer regardless of client payment and the compensation is not a percentage of, or directly tied to, the client's payment. Otherwise Rule 1.5(d) may apply.

Background and rules framework

The opinion applies Colorado RPC 1.1, 5.1, and 5.3 to competence and supervision; Rule 1.6 to client information; Rule 5.5(a)(3) to unauthorized practice; Rule 1.10 to conflict imputation; Rules 1.5 and 5.4 to compensation; and Rules 1.2 and 1.4 to disclosure of significant developments. It incorporates the temporary-lawyer framework from CBA Formal Opinion 105.

Citations and references

Rules of Professional Conduct:

• Colo. RPC 1.1, 5.1, and 5.3 (competence and supervision)
• Colo. RPC 1.6 (confidentiality)
• Colo. RPC 5.5(a)(3) (assisting unauthorized practice)
• Colo. RPC 1.10(a) (imputed conflicts)
• Colo. RPC 1.5(a), 1.5(d), and 5.4(a) (reasonable fees, fee division, and nonlawyer fee sharing)
• ABA Model Rule 5.4 (foreign professionals and lawyer status)

Cases:

• Denver Bar Association v. Public Utilities Commission, 391 P.2d 467 (Colo. 1964), definition of practicing law
• People v. Easley, 956 P.2d 1257 (Colo. 1998), fee sharing with a nonlawyer
• In re Opinion 24 of the Committee on Unauthorized Practice of Law, 607 A.2d 962 (N.J. 1992), supervised nonlawyer work

Other opinions cited:

• CBA Formal Opinion 105: temporary lawyers
• ABA Formal Opinion 08-451: outsourcing legal and nonlegal support services
• ABA Formal Opinion 01-423: partnerships with foreign lawyers
• New York City Formal Opinion 2006-3: supervision of overseas legal-service providers

See also

• CBA Formal Op. 105: Temporary Lawyers
• ABA Formal Op. 08-451: Outsourcing Legal and Nonlegal Services
• ABA Formal Op. 477R: Securing Client Communications

Source

• Landing page: https://www.cobar.org/ethicsopinions
• Original PDF: Colorado Formal Ethics Opinion 121