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May 23, 2008

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emma summers

I don't understand why lawers like Mr. Hennessey are opposing this trend in outsourcing legal work. Besides being cheaper while at the same time maintaining the quality of our work, it forces us to focus on more important aspects of our work. Outsourcing has so many benefits.

Joseph Hennessey

Joe Hennessey has joined John J. Beins and Seth D. Goldberg to form "Beins Goldberg & Hennessey, LLP." John Beins and Seth Goldberg have significant expertise in litigating consumer class action lawsuits -- as well as other business litigation. John Beins, Seth Goldman, Anthony Newman, Ernie McIntosh and Joe Hennessey will be combining their various areas of expertise to identify those who have been victimized by the use of foreign legal process outsourcers. Newman McIntosh & Hennessey, LLP decided that rather than litigate an academic declaratory judgment action, investigations should be launched to identify those who have already suffered damages through the use of LPOs and to file class-wide actions to recover damages to vindicate privacy rights.

So, stay tuned -- we are not at the end of this issue, we are at the beginning.

Russell Smith

You can read the motion to dismiss at http://www.sddglobal.com/Acumen_SDDGlobal.pdf

Here's a summary:

WASHINGTON, D.C. , August 15, 2008 — In a closely-watched legal case, apparently designed by a U.S. law firm to place roadblocks in the way of the fast-growing legal services outsourcing industry in India, the Indian lawyers are fighting back. Newman McIntosh & Hennessy (“NMH”), a U.S. law firm worried about off-shoring of legal work, sued India-based Acumen Legal Services, along with U.S. President George Bush, in the Washington D.C. federal court. In response, Acumen today filed a hard-hitting motion to dismiss.

NMH is suing on the basis of speculation, unsupported by even a single example, that the U.S. government is intercepting all or most of the data sent by U.S. lawyers to foreign legal outsourcing providers, as part of an anti-terrorism campaign. Seizing on that speculation as an excuse, NMH seeks a court order against “all United States-based attorneys” who outsource legal work to India, and “all foreign legal outsourcing providers.”

Thanks to a motion to dismiss and supporting legal brief researched and drafted entirely in India, the NMH law firm is getting an unexpected taste of the kind of high-quality legal work that Indian lawyers can provide, even in the Washington D.C. federal court. In their brief on the motion to dismiss, the legal team for Acumen points out the following:

NMH’s requested declaratory and injunctive relief, in addition to having no legal or factual justification, would reach far beyond NMH’s obviously intended target, namely, low-cost foreign legal outsourcing companies, which NMH apparently perceives as competition. The requested relief could have a substantial adverse effect on the operations of all U.S. law firms that have foreign offices, and all U.S. corporations that need to use foreign counsel to transact business abroad. NMH’s requested ruling that any foreign electronic transmission of data between clients and attorneys, or between attorneys, constitutes a waiver of constitutional rights and discovery privileges, would amount to an untenable and unwarranted interference with global commerce.

Moreover, NMH’s request for an order requiring all attorneys in the United States, including in-house counsel, (a) to search for every instance in which they ever transmitted any kind of data to any foreign national, and (b) to send a notification regarding the same in every case, presumably to the owner of the data, would amount to one of the most onerous and unjustified burdens ever imposed by any court in a civil proceeding.

In addition, by requesting the Court to issue declarations answering seven hypothetical legal questions, purportedly because the NMH law firm “need[s] guidance,” wants “to gain certainty,” and “must understand” various points of law to help the firm “in an increasingly globalized legal services environment,” NMH seeks relief that is impermissible under well-established principles governing declaratory judgments. The NMH lawyers, in essence, are seeking to outsource their legal research tasks to this Court, and secondarily to Acumen, President Bush and their respective counsel.

NMH’s Complaint is extraordinary, not only for what it contains, but even more so for what it does not. Nowhere in the Complaint does NMH allege:

-- any example of an actual or impending injury to itself or to anyone;

-- any actual or impending violation of Fourth Amendment rights;

-- any instance of an actual or impending waiver of Fourth Amendment rights;

-- any basis for finding a waiver of Fourth Amendment rights, given that NMH does not allege that any Fourth Amendment rights are being violated by the supposed government interception of data;

-- any instance of an actual or impending breach or waiver of attorney-client privilege or confidentiality;

-- any actual or impending example of government interception of data;

-- any actual or impending instance of transmission of data to any foreign nationals by anyone;

-- any basis for NMH’s speculation that electronic transmissions to foreign nationals are more likely to fall into the hands of the government than are domestic transmissions, which are subject to possible domestic surveillance by law enforcement agencies;

-- any examples of actual or impending conduct within the District of Columbia by any of the parties;

-- any relationship or interaction of any kind among any identified persons or entities in the District of Columbia or anywhere else, except for the unsuccessful solicitation sent by Acumen in India to NMH in Maryland;

-- any monetary dispute or requested monetary relief that could support the “amount in controversy” requirement for NMH’s assertion of diversity jurisdiction;

-- any legal or factual basis upon which this court could grant the sweeping declaratory and injunctive relief sought against millions of non-parties, such as every lawyer in the United States, and every foreign legal outsourcing company;

-- any reason why NMH cannot avoid the speculative dangers it alleges by simply (a) continuing to refrain from using foreign legal outsourcing providers, and (b) seeking a protective order in any litigation where NMH believes that its clients’ data may be sent by adversaries to such providers;

-- any legal or factual basis upon which the court could require the Executive Branch to “prevent the waiver of Fourth Amendment rights” or “safeguard the attorney-client privilege and client communications and client confidences and secrets;” or

-- any reason why protection is needed beyond the statutory protection already provided by Congress, under which “[n]o otherwise privileged wire, oral, or electronic communication intercepted in accordance with, or in violation of, the [applicable government surveillance provisions] shall lose its privileged character.” See e.g. 18 U.S.C. § 2517(4); 50 U.S.C. § 1806(a).

In short, as further discussed in the remainder of this brief, NMH has not come close to meeting the most basic requirements for standing or personal jurisdiction.

Hiren Patel

My colleague Michael Geske prepared a response addressing NMH's claims. The approach NMH has taken and the requests they have lodged with the ethics committees and the DC court have consequences significantly beyond the LPO industry. The full text of Geske's response can be found here:

http://www.aphelionlegal.com/News/NMHResponse.htm

An LPO responds to this situation here: http://www.aphelionlegal.com/News/NMHResponse.htm

L.F.

This lawsuit and Hennessey's requests for guidance directed to the DC and MD bar associations fail to address broader implications to the practice of law. Hennessey's argument is that electronic communication to a foreign citizen residing oversees may waive both 4th Amendment protections and the attorney-client privilege. Here are two common practices completely unrelated to outsourcing work to India that fall within Hennessey's argument that - for whatever reason - Hennessey failed to include in his requests to the DC and MD bar associations:

1. Multinational law firms communicate privileged and confidential client information to foreign citizens residing oversees every time those firms staff lawyers from, say, a London office on an international transaction or arbitration. Based on Hennessey's argument, it is completely inconsequential that a foreigner may work for the same employer and that the electronic communication is completely internal to one organization.

2. Entities that engage in cross border transactions often need to hire local counsel in a foreign country to enforce contractual and other rights. To avoid being completely subject to the foreign nation's privilege rules, it is common for a business to hire American legal counsel, who will then hire foreign counsel on behalf of their client. If Hennessey is correct, then even in this situation, when American counsel sends privileged and confidential information to local counsel in a foreign country, the client may be waiving its claims of privilege and confidentiality to the underlying information - even if that information is necessary to prosecute a claim to recover damages or to enforce a judgment obtained in the U.S.

It seems pretty clear that Hennessey has set out to establish a major roadblock to the outsourcing industry, because he has conveniently ignored these parallel situations that are common practice. If the DC and MD bar follow Hennessey's recommendations, we should expect to see major fallout throughout the entire legal industry - not just the outsourcing industry. And given that the amount of money at stake in cross border transactions and in enforcing contractual rights or U.S. judgments overseas dwarfs the amount of money at stake with outsourcing, it will not just be outsourcing companies that lose out. It will be any law firm with a foreign office and any business in the U.S. that engages in foreign commerce.

Wiliam Bierce

This is a creative Constitutional and common-law lawsuit that focuses on the heart of the judicially regulated attorney-client relationship, the privileged communication. While contracts have generally resolved the issue of confidentiality for compliance with U.S., European and other foreign privacy and data protection laws in relation to transborder services, this lawsuit introduces the novel issue of the balance between the Homeland Security Act of 2002 and the common law tradition of attorney-client privilege.

This lawsuit may stimulate some new outcomes. Technological solutions might permit a coexistence of police powers and constitutional rights. International treaties on data security and privacy relating to personally identifiable data, health data, financial data and other "high value" data.

Beyond offshoring of LPO, the lawsuit raises another issue: what assurance can any U.S. attorney give to foreign clients about the confidentiality of their privileged communications? This is an old issue for those who have focused on such risks, not just plaintiffs' bar personal injury tort lawyers. Prudent American attorneys have been putting such a disclosure in their retainer agreements since 2002. Any judicial remedy should consider the bilateral trade in services, as American lawyers export their services to foreign clients seeking U.S. legal advice.

A.W.

Going by this and the law.com article about the same story (which i think came from the legal times, and definitely credits this blog for breaking this story), I'll add a few points of analysis.

First, this suit will be dismissed. There is no concrete injury.

Second, regardless of the first point, he is raising an excellent issue, and I will say to all the attorneys out there, it is your duty to disclose to your client if there is outsourcing going on and to warn them of the very real possibility that they are shedding their privileges if they do so.

Third, he is quite myopic in his viewpoint. He turns this into a bit of an anti-Bush rant, but the truth is no matter what US policy is, you don't have a real expectation of privacy overseas. First, the communications pass through international waters--no man's land, from a legal perspective. then it passes to another country that might or might not respect privacy too. It is crazy, for instance, for a lawyer to send information to china and expect it to be private. And even in countries that generally respect privilege, what happens when there are exceptions that don't exist in the U.S.?

To be blunt, if you send it overseas at all, you place your clients' privilege in jeapordy. Now, if your client is cool with that, then that is fine, but I think we all have an ethical duty to make sure they go in with open eyes.

tinasilvee

Outsourcing has so many benefits:
1) Cost Savings
2) Time Zone Benefits
3) Quick Turn Around Time
4) Standardizing Business Processes
and many more....

http://www.outsourcewebsite.com

Dr. Gene Nelson

Great job, Joseph Hennessey. I'll be honored to sign on as an amicus curae when the case advances to the appellate level, which I'm confident it will, given the big dollars at stake.

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