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Can Outsourcing Violate Attorney-Client Privilege or Waive the Fourth Amendment?

Plenty of law bloggers are discussing a declaratory action by Bethesda, Md.-based law firm, Newman McIntosh & Hennessey, seeking a ruling on whether outsourcing privileged client documents for review to companies located outside of the country could result in a waiver of Fourth Amendment protection or attorney-client privilege. Joseph Hennessey, who drafted the motion, argues that foreign companies have no presumption of privacy because the National Security Agency can spy on them without constitutional constraints.  Thus, by sending client documents overseas, lawyers may waive their clients' Fourth Amendment protections against unlawful search, or compromise the attorney-client privilege.  The firm has also sought opinions from the District of Columbia and Maryland bars on whether lawyers who outsource documents overseas must disclose potential privilege waivers to their clients.

As Carol Shepard points out at Arborlaw, the case has enormous implications not just for the Newman firm, but for the entire practice of outsourcing.  She writes:

Here’s why this is a particularly interesting story to watch: A. large law firms are now relying heavily on the practice of outsourcing their legal document imaging and legal document review work to maintain their profit margins. B. The regulation of attorneys is almost entirely a matter of state law. I’m not aware of any federal controls over the attorney-client relationship or attorney-client privilege (except with regard to the recent encroachment on attorney-client communications in the representation of enemy combatants in connection with Guantanamo and Bush administration military tribunals).

At Ride the Lightning, Sharon Nelson asks, "This issue has long been a thorn, frequently debated by experts. You lower costs by foreign review but at what risk?"

I'm not sure the federal district court will address this question: Courts prefer to address real cases and controversies and dole out declaratory relief only narrowly.  From my review of the filings (available at the Newman Web site), the firm never states that it intended to outsource documents to Acumen, an India-based company, or had a contract in place to do so.  Thus, it's unlikely that the federal court is going to touch this matter.  By contrast, bar associations routinely respond to requests for guidance in this type of case, so we can expect a ruling from D.C. and Maryland on lawyers' obligations to their clients when offshoring documents. 

Posted by Carolyn Elefant on May 28, 2008 at 02:56 PM | Permalink | Comments (3)


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