Freelance Law

Ten Things To Know About Freelance Law: #8 Billing Clients

In this post, I cover the hiring lawyer’s options when billing clients for freelance legal services.

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In the freelance law context, hiring lawyers can either pass the freelance lawyer’s invoice on to clients as legal fees or an expense.  Neither the Model Rules nor the Colorado Rules of Professional Conduct address this choice and it “does not seem to be a matter of ethics.”  American Bar Association Standing Committee on Ethics and Professional Responsibility, Formal Opinion 00-420, Surcharge to Client for Use of a Contract Lawyer, November 29, 2000.  Although the choice isn’t a matter of ethics, there are ethical obligations associated with billing freelance legal services as either legal fees or expenses.

A hiring lawyer can bill clients for freelance legal services as legal fees.  The guiding rule for legal fees is that they must be reasonable.  C.R.P.C. 1.5(a).  Notwithstanding this fundamental rule, lawyers can indeed make a profit from their legal services.  Indeed, lawyers *attempt* to make a profit from practicing law.  That is perfectly acceptable so long as the total legal fee is not unreasonable.  American Bar Association, Opinion 00-420.  

Under certain circumstances, the hiring lawyer can impose a surcharge on the freelance legal services.  A ‘surcharge’ is applied when the hiring lawyer charges the client more for the freelance lawyer’s work than the cost incurred by the hiring lawyer for obtaining the freelance legal services.  Id.  The hiring lawyer can impose a surcharge when the freelance legal services are billed to the client as legal services. Id.  The hiring lawyer can impose a surcharge whether or not the use of the freelance lawyer is disclosed to the client.  Id.

The hiring lawyer does not have a duty to disclose the surcharge if the hiring lawyer either supervises the freelance lawyer or adopts the work of the freelance lawyer as their own.  Id.  If the hiring lawyer imposes a surcharge on the freelance lawyer’s work, the client’s reasonable expectation is that the hiring lawyer has supervised the freelance lawyer.  Id.  Essentially, if the hiring lawyer has taken the time to supervise the freelance lawyer or taken the risk of adopting the work of the freelance lawyer, the surcharge is compensation. 

Many lawyers incorrectly assume that they must disclose to their clients the rate that they pay the freelance lawyer.  Both the Colorado Bar Association and the American Bar Associations, however, expressly reject that notion.  Both emphasize that the financial arrangement between the hiring lawyer and freelance lawyer does not need to be disclosed to the client.  This financial arrangement is analogous to the one between a firm and an associate.  The firm charges the client an hourly rate for the associate’s work.  Part of the hourly rate paid by the client goes to cover the associate’s salary and benefits, part of it goes to cover the firm’s overhead, and part of it goes back to the firm as profit.  The firm does not disclose this breakdown to the client.  Likewise, the hiring firm “does not have a duty to disclose to the client the amount paid to the [freelance] lawyer or the profits made from using the [freelance] lawyer as long as the financial arrangement does not constitute fee-splitting under Colo. RPC 1.5(d)” and the total fee is reasonable.  Colorado Bar Association, Formal Opinion 105, Opinion on Temporary Lawyers, May 22, 1999; American Bar Association Standing Committee on Ethics and Professional Responsibility, Formal Opinion 08-451, Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services, August 5, 2008.

Thus, the hiring lawyer can markup the freelance lawyer’s work as it would with an associate of the firm.  Freelance lawyers can be a profit source for the savvy freelance lawyer.  Hiring lawyers can free up time to spend on client recruitment or retention, or focus on the ‘rainmaking’ portions of their practice.

A hiring lawyer can also choose to pass on the freelance lawyer’s invoice to the client as an expense.  To avoid fee-splitting, many hiring lawyers agree to pay the freelance lawyer regardless of whether the client pays.  In that circumstance, the freelance lawyer submits an invoice to the hiring lawyer and the hiring lawyer pays the freelance lawyers.  As a cost incurred by the hiring lawyer, freelance legal services can be passed to the client as an expense if the hiring lawyer so chooses.  When billed as an expense, the hiring lawyer cannot impose a surcharge and the bill to the client cannot exceed the cost incurred by the hiring lawyer.  American Bar Association, Opinion 00-420.  Because freelance lawyers often charge a much lower hourly rate than lawyers in a firm directly representing clients, hiring lawyers can use freelance legal service to give their clients cost-effective access to justice and representation.  When serving a client of limited means, the hiring lawyer may wish to consider using freelance legal services.

In the next post, I will explore a hiring lawyer’s supervisory obligations.

 

Of course, rules and ethical obligations may vary by jurisdiction, and this post does not constitute legal advice.

Ten Things To Know About Freelance Law: #7 Confidentiality

In this post, I discuss confidentiality issues in the freelance law context. 

As discussed in earlier posts, freelance lawyers form an attorney-client relationship with hiring lawyer’s client, and all of the ethical obligations inherent in the attorney-client relationship are binding on the freelance lawyer.  Colorado Bar Association, Formal Opinion 105, Opinion on Temporary Lawyers, May 22, 1999.  One of a lawyer’s core ethical duties to clients is the duty to observe client confidentiality.  “A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation, or the disclosure is permitted by paragraph (b).”  C.R.P.C. 1.6(a).  Rule 1.6 has three applications in the freelance law context: disclosure to the client based on level of supervision, obligations of the hiring lawyer, and obligations of the freelance lawyer.

The level of supervision, if any, that the hiring lawyer exercises over the freelance lawyer directly impacts whether the hiring lawyer can share confidential client information with the freelance lawyer without the client's informed consent.  Outside of the limited confidentiality exceptions in paragraph (b), Rule 1.6(a) allows disclosure of confidential information either if the client gives informed consent or the disclosure is impliedly authorized. 

When the hiring lawyer supervises or works closely with the freelance lawyer, the hiring lawyer is impliedly authorized to share confidential information with the freelance lawyer as part of the representation.  That is because “client consent to the involvement of firm personnel and the disclosure to those personnel of confidential information necessary to the representation is inherent in the act of retaining the firm.  However, that statement is predicated on the assumption that the relationship between the firm and the [freelance] lawyer involved a high degree of supervision and control, so that the [freelance] lawyer would be tantamount to an employee.”  American Bar Association Standing Committee on Ethics and Professional Responsibility, Formal Opinion 08-451, Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services, August 5, 2008.

Conversely, when the hiring lawyer exercises little to no supervision over the freelance lawyer, the hiring lawyer must obtain the client's informed consent to the disclosure of confidential information.  “Where the relationship between the firm and the individuals performing services is attenuated, no information protected by Rule 1.6 may be revealed without the client’s informed consent.  The implied authorization of Rule 1.6(a)…to share confidential information within a firm does not extend to outside entities or individuals over whom the firm lacks effective supervision and control.”  Id.  (I will discuss supervisory issues in a later post).  The hiring lawyer must evaluate the level of supervision and determine whether client informed consent is necessary.  If informed consent is necessary, the hiring lawyer must provide the client with adequate information about the risks and alternatives.  C.R.P.C 1.0(e).

Rule 1.6 imposes additional obligations on the hiring lawyer.  “A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to representation of a client."  C.R.P.C. 1.6(c).   Rule 1.6(c) has two applications in the freelance law context.  

First, to avoid imputed conflicts of interest between the freelance lawyer and hiring lawyer, the hiring lawyer should screen the freelance lawyer from all information relating to the firm’s other clients for whom the freelance lawyer is not doing work.  Colorado Bar Association, Opinion 105; American Bar Association Standing Committee on Ethics and Professional Responsibility, Formal Opinion 88-356, Temporary Lawyers, December 16, 1988.  (I discussed screening in the previous post about conflicts of interest).

Second, the hiring lawyer should take steps to protect client confidentiality when outsourcing services, whether legal or nonlegal.  “Depending on the sensitivity of the information being provided to the services provider, the [hiring] lawyer should” evaluate the service provider’s practices to get a sense of the “operation and professionalism” of the freelance lawyer.  American Bar Association, Opinion 08-451.  To meet this obligation, the hiring lawyer should consider a confidentiality agreement with a freelance lawyer, either in a fee agreement or in a stand-alone agreement.  Id.  (I will cover fee agreements with freelance lawyers in the final post in this series).

In the attorney-client relationship, Rule 1.6(a) imposes obligation on the freelance lawyer.  If the freelance lawyer is deemed to be associated with the hiring lawyer’s firm under C.R.P.C. 1.10, the freelance lawyer cannot disclose information related to the representation of the firm’s clients, regardless of the source of the information.  American Bar Association, Opinion 88-356.  If a freelance lawyer has access to confidential client information for the firm’s clients, the freelance lawyer “must not disclose information relating to the representation of persons known to the [freelance] lawyer to be firm clients regardless of the source of the information.”  Id.  The freelance lawyer, however, has more limited obligations when not deemed to be associated with the hiring firm.  In that circumstance, the freelance lawyer is limited to “not revealing (1) information relating to the representation of any client for whom the temporary lawyer is working and (2) information relating to the representation of other firm clients only to the extent that the temporary lawyer in fact obtains the information as a result of working with the firm.”  Id.

Rule 1.6 imposes confidentiality obligations on the hiring lawyer and the freelance lawyer alike, and both lawyers should review their processes to ensure that they fulfill these obligations.

In the next post, I will cover how hiring lawyers can bill their clients for freelance legal services.

Of course, rules and ethical obligations may vary by jurisdiction, and this post does not constitute legal advice.

Ten Things To Know About Freelance Law: #6 Conflicts of Interest

In this post, I explore how conflict of interest rules apply in the freelance law context and offer guidelines for avoiding imputed conflicts.   It is crucial that both the freelance lawyer and hiring lawyer properly recognize and evaluate conflict of interest issues throughout their working relationship.  This is one of, if not the most, important topics in freelance law.

As discussed in the third post in this series, a freelance lawyer is bound by all of the Colorado Rules of Professional Conduct.  Thus, conflict of interest rules apply to freelance lawyers.  American Bar Association, Standing Committee on Ethics and Professional Responsibility, Formal Opinion 88-356, Temporary Lawyers, December 16, 1988; Colorado Bar Association, Formal Opinion 105, Opinion on Temporary Lawyers, May 22, 1999.

A lawyer shall not represent a client if there is a concurrent conflict of interest.  C.R.P.C. 1.7(a).  A concurrent conflict exists if the representation of one client is directly adverse to another client, even if the matters are unrelated.  C.R.P.C. 1.7(a); see also American Bar Association, Opinion 88-356; Colorado Bar Association, Opinion 105.  A concurrent conflict also exists if the representation of one client will be materially limited by the lawyer’s responsibility to another client, a third party, or the lawyer’s personal interests.  C.R.P.C. 1.7(a).   These conflicts of interest can be waived by a client who gives informed consent.  C.R.P.C. 1.7(b). 

A lawyer shall not represent a client if there is a conflict with a former client.  A lawyer who has represented a client shall not later represent another person in “the same or substantially related matter in which that person’s interests are materially adverse to the interests of the former client.”  C.R.P.C. 1.9(a).  Again, this conflict can be waived by a client who gives informed consent.  Id.

Before undertaking representation and forming an attorney-client relationship, the freelance lawyer must identify conflicts of interest, and, if necessary, obtain a waiver from the client(s).  The hiring lawyer must provide the freelance lawyer with all of the information necessary for the freelance lawyer to evaluate potential conflicts of interest, including the name of the client, opposing parties, related parties, and associated counsel. 

The real action in freelance law is the potential for conflicts of interest to be imputed between the hiring lawyer and the freelance lawyer.  If the hiring lawyer and freelance lawyer are deemed to be “associated in a firm,” then neither of them shall represent a client if either one of them practicing alone would be prohibited from doing so.   C.R.P.C. 1.10(a). 

Freelance lawyers and hiring lawyers have a co-equal interest in avoiding imputed conflicts of interest.   The stakes are high.  If the freelance lawyer is deemed associated with multiple hiring law firms, “then the current and former clients of each firm might be deemed the current and former clients of the [freelance] lawyer and all of all the other firms with which the [freelance] lawyer is associated.  In that situation, a firm could face disqualification if one of its clients were adverse to the client of another firm with whom the [freelance] lawyer is associated, even if the [freelance] lawyer did not work on any matter for any client.”  Colorado Bar Association, Opinion 105.   This situation serves no one’s interests—it doesn’t help the hiring lawyer or the freelance lawyer, and it certainly does not help the client.

Thankfully, by exercising some common sense and diligence, the freelance lawyer and hiring lawyers can avoid being deemed associated in a firm and having their conflicts imputed to each other.  

The freelance lawyer and the hiring lawyer should understand when a freelance lawyer will be deemed associated with the hiring lawyer’s firm.  There are three main factors in determining whether a freelance lawyer and hiring lawyer will be deemed to be associated in a firm. 

The first and “key factor in determining whether the [freelance lawyer] is associated with a firm” is the freelance lawyer’s “access to information regarding the firm’s other clients.”  Colorado Bar Association, Opinion 105; American Bar Association, Opinion 88-356. 

Second, “the manner in which the temporary lawyer is presented to and perceived by clients, courts, and third-parties is another important factor in determining whether the temporary lawyer is associated with a firm.” Id. 

Third, both the American Bar Association and the Colorado Bar Association have adopted the functional analysis approach, which examines “the facts and circumstances involved in the relationship between the temporary lawyer and the firm.” Id.

There are some concrete actions and best practices that the freelance lawyer and hiring lawyer can take to prevent imputed conflicts.

DO

·       Screen the freelance lawyer from any confidential information related to the hiring firm’s other clients.  Password protect files if the freelance lawyer has access to the firm’s server.  Better yet, only provide the freelance lawyer with the information necessary for the representation of each client;

·       Document the steps taken to ensure effective screening;

·       Keep accurate records of all matter and clients that the freelance lawyer has worked on;

·       Maintain separate working environments;

·       Hold the freelance lawyer out as an independent contractor working for the firm on a limited basis;

·       Issue the freelance lawyer a W-9/1099.

DON’T

·       Discuss client matters that the freelance lawyer is not working on in front of the freelance lawyer.  Don’t involve the freelance lawyer in “all firm” meetings where other clients are discussed;

·       Allow the freelance lawyer access to other clients’ files;

·       Allow the freelance lawyer to use the firm’s letterhead;

·       Hold the freelance lawyer out an employee, associate, or of counsel;

·       Imply that the freelance lawyer is associated with the firm.

By following these guidelines, the freelance lawyer and hiring lawyer should be able to avoid the appearance of being associated in a firm and prevent imputed conflicts.

In the next post, I will consider confidentiality issues in connection with freelance legal services.

Of course, rules and ethical obligations may vary by jurisdiction, and this post does not constitute legal advice.

Ten Things To Know About Freelance Law: #5 Disclosure to Client and Informed Consent

In this post, I explore the factors that a hiring lawyer must consider in determining whether there is a duty to inform the client of the use of a freelance lawyer and the specific steps that the hiring lawyer should take when such a duty exists.  Lawyers often want to know whether they need to or should tell their clients about the use of a freelance lawyer.  This post teases out the specific times when disclosure is required and the times when disclosure is not required, but may be warranted or advisable.

There are three major considerations in the disclosure analysis: (1) the financial arrangements between the hiring lawyer and freelance lawyer, (2) the level of supervision the hiring lawyer exercises over the freelance lawyer, and (3) the impact the use of a freelance lawyer has on the representation.

First, the hiring lawyer and freelance lawyer must consider the financial arrangement between them.   A client must give informed consent to fee-splitting.  C.R.P.C. 1.5(d).  The rule provides that “where there is a division of fees between lawyers not in the same firm, it is permitted” only if the lawyers assume joint responsibility or the division of the fee is proportional to the representation, the client gives informed consent in writing, and the total fee is reasonable.  Id. 

Because the freelance lawyer and hiring lawyer are, by definition, “not in the same firm,” many lawyers incorrectly assume that the rule requires disclosure whenever a freelance lawyer provides legal services.  Although it is true that the freelance lawyer and hiring lawyer will not be of the same firm, it does not necessarily follow that the freelance lawyer’s compensation is a “division of fees” that requires informed client consent.

The lawyers must determine whether “their financial arrangement constitutes a division of fees.” Colorado Bar Association, Formal Opinion 105, Opinion on Temporary Lawyers, May 22, 1999.  “A division of fee is a single billing to a client covering the fee of two or more lawyers who are not in the same firm.”  Id.   Fee-splitting in the freelance law context usually arises when the freelance lawyer’s “compensation is directly tied to or dependent on the client’s payment of fees.”  Id.  Examples of fee-splitting are when the gross fee paid by the client is split between the hiring lawyer and the freelance lawyer, when the freelance lawyer takes a portion of contingent fees, or the freelance lawyer takes a portion of non-contingent fees paid by the client.  If the financial arrangement constitutes fee-splitting, client disclosure is required.

It is more likely, however, that the financial arrangements between the hiring lawyer and freelance lawyer do not constitute fee-splitting and do not trigger disclosure.  Generally, these financial arrangements arise when the hiring lawyer or firm is obligated to pay the freelance lawyer regardless of client payment.  Examples of these arrangements are when the hiring lawyer pays the freelance lawyer an hourly rate, a flat rate by day or week, or a fixed fee per deliverable.  Colorado Bar Association, Opinion 105.  If the financial arrangement does not constitute fee-splitting, client disclosure is not mandated by Rule 1.5(d).

Second, the hiring lawyer must evaluate the level of supervision, if any, exercised over the freelance lawyer.  Both the American Bar Association and Colorado Bar Association Ethics Opinions agree that if the freelance lawyer works independently and without the close supervision of the hiring lawyer, the hiring lawyer must disclose the use of the freelance lawyer to the client.  American Bar Association, Standing Committee on Ethics and Professional Responsibility, Formal Opinion 88-356, Temporary Lawyers, December 16, 1988; Colorado Bar Association, Formal Opinion 105.   Where the hiring lawyer does not supervise the activities and work of the freelance lawyer, “the client, by retaining the [hiring] firm, cannot reasonably be deemed to have consented to the involvement of an independent lawyer.”  American Bar Association, Opinion 88-356.

Conversely, there is no duty to disclose if the hiring lawyer directly supervises the freelance lawyer’s activities and work or adopts the freelance lawyer’s work as their own.  American Bar Association, Opinion 88-356; Colorado Bar Association, Opinion 105.  There is no disclosure duty because “the client who retains a firm expects that the legal services will be rendered by lawyers and other personnel closely supervised by the firm.  Client consent to the involvement of firm personnel and disclosure to those personnel of confidential information necessary to the representation is inherent in the act of retaining the firm.”  American Bar Association, Opinion 88-356.

Third, the hiring lawyer must evaluate whether the use of a freelance lawyer constitutes a significant development in the representation.  A lawyer must “keep the client reasonably informed about the status of the matter.”  C.R.P.C. 1.4(a)(3).   Comment 3 to the rule explains that this includes “significant developments affecting the timing or substance of the representation.”  This a fact-dependent inquiry.  If a freelance lawyer provides substantive and ongoing litigation support, that is probably a significant development in the representation requiring disclosure and consent.  If a freelance lawyer provides a limited amount of legal research on a straightforward issue, that is probably not a significant development in the representation requiring disclosure and consent.

Although there are a few bright line rules requiring disclosure, there are no rules prohibiting disclosure.  Many of the rules of professional conduct promote and encourage open communication and transparency in the attorney-client relationship.  The hiring lawyer should use professional judgment to assess the client’s reasonable expectations and the nature of the freelance lawyer’s services.  If the hiring lawyer believes that using a freelance lawyer would affect the client’s expectations, the hiring lawyer should disclose the use of the freelance lawyer.  Colorado Bar Association, Opinion 105; Colorado Bar Association, Formal Opinion 121, Use of temporary lawyers and other professionals not admitted to practice in Colorado (“outsourcing”), June 16, 2009.

If the hiring lawyer determines that a duty to disclose exists, the client must give informed consent.  Informed consent requires that the hiring lawyer communicate “adequate information and explanation” about both the risks and alternatives to using a freelance lawyer.  C.R.P.C. 1.0(e).  If informed consent is required, the hiring lawyer must promptly notify the client.  C.R.P.C. 1.4(a)(1).  When communicating about the risks of using a freelance lawyer, the hiring lawyer may wish to discuss imputed conflicts of interest, competency, supervision, and confidentiality issues.  When communicating about the alternatives to using a freelance lawyer, the hiring lawyer may wish to discuss their workload, availability, fees, and specialization.

Many lawyers incorrectly assume that they must notify their client every time they involve a freelance lawyer in a case.  Instead, the hiring lawyer must evaluate their financial agreement with the freelance lawyer, the level of supervision exercised, the nature of the legal services, and client expectations, and promptly inform their client if necessary.

In the next post, I will explore issues related to conflicts of interest in the freelance law context.

 

Of course, rules and ethical obligations may vary by jurisdiction, and this post does not constitute legal advice.

Ten Things To Know About Freelance Law: #4 Unbundled Legal Services

In this post, I discuss how freelance law is an analog to unbundled legal services or limited scope representation.  

In Colorado, a lawyer and client may agree to limit the scope of services or objectives of the representation the lawyer provides to the client.  C.R.P.C. 1.2(c).  The limitation on either the scope of services or objectives must be reasonable and the client must give informed consent.  Id.  This arrangement between lawyer and client is referred to as limited scope representation, unbundled legal services, or simply ‘unbundling.’ 

The traditional “full bundle” of legal representation consists of “gathering facts, advising the client, discovering the facts of the opposing party, performing legal research, drafting correspondence and documents, negotiating, and representing the client in court.”  Colorado Bar Association, Formal Opinion 101, Unbundling/Limited Scope Representation, New Opinion Approved May 21, 2016.  In contrast to the full bundle of services, “limited scope representation takes four forms: (1) providing limited litigation assistance to self-represented litigants in court cases; (2) ghostwriting pleadings or briefs for self-represented litigants; (3) providing non-litigation advice to self-represented litigants; and (4) transactional assistance.”  Id.

Several rules provide authority for limited scope representation.  Colorado Rule of Professional Conduct 1.2(c) is the main authority for limiting the scope or objectives of the representation.  The Rules of Civil Procedure additionally deal with limited scope representation.  A lawyer may provide unbundled legal services to a pro se party by filing a notice of limited appearance for specified proceedings and may file a notice of completion of limited appearance, which terminates the lawyer’s appearance without further action by the lawyer or the court.  C.R.C.P. 121 §1-1(5).  Lawyers may ‘ghostwrite’ pleadings for a pro se party subject to certain specific limitations.  C.R.C.P. 11(b).

The United States District Court for the District of Colorado, however, specifically excludes Colorado Rule of Professional Conduct 1.2(c) from the standards of professional responsibility in federal district court in Colorado.  D.C.COLO.LAttyR 2(b)(1).  The District of Colorado permits limited scope representation only upon a court order that defines the scope of the representation.  D.C.COLO.LAttyR 5(a)(2).

Freelance law mirrors unbundled legal services in several respects.  As with freelance lawyers, all of the Colorado Rules of Professional Conduct apply to a lawyer providing unbundled legal services, regardless of the limited scope or temporary duration of the representation.  Colorado Bar Association, Formal Opinion 101.

With unbundled legal services, the client and lawyer pick and choose the services that the lawyer will provide from the traditional full bundle of representation.  Freelance law operates in much the same way—it is ‘a la carte representation.’  The freelance lawyer essentially provides unbundled legal services to the client.  The main difference between freelance law and unbundled legal services is that in freelance law, there is an intermediary between the freelance lawyer and the client—the hiring lawyer.  The hiring lawyer can retain the freelance lawyer for very limited legal services, such as drafting one pleading or researching and analyzing one issue. 

As with unbundled legal services, the freelance lawyer and hiring lawyer should carefully define the scope of the representation and services that the freelance lawyer will provide.  Id.  A well-drafted fee agreement will note the specific tasks that the freelance lawyer will undertake.   With both unbundled legal services and freelance legal services, it is crucial that all of the parties understand and communicate who is responsible undertaking certain actions, meeting deadlines, ensuring filing, and arranging service.  When a freelance lawyer and hiring lawyer work together, they should take care to ensure that these responsibilities clearly delineated in writing.  I will discuss fee agreements in the freelance legal services context in more detail in another post. 

Freelance lawyers, like lawyers who provide unbundled legal services, must ensure that they provide competent representation and should ensure that the agreement with the client does not place limitations that would impair this obligation.  “For example, a lawyer should not agree to limit the time allotted to the client’s case such that the lawyer could not provide sufficient advice on which the client could rely.”  Id.

Freelance legal services offers many of the benefits of unbundled legal services, including flexibility and reduced cost to the client.  Id.

In the next post, I will discuss when the hiring lawyer must disclose the use of a freelance lawyer to their client.

 

Of course, rules and ethical obligations may vary by jurisdiction, and this post does not constitute legal advice.

Ten Things To Know About Freelance Law: #3 Who is Working for Who

In this post, I discuss the attorney-client relationship within the freelance law context. 

It is crucial that both of the lawyers involved in the freelance law relationship understand the nature of the attorney-client relationship.  Although the freelance lawyer is retained by the hiring lawyer, the freelance lawyer does not represent the hiring lawyer or provide legal services on their behalf.  Rather, the freelance lawyer provides legal services to the hiring lawyer's client and forms an attorney-client relationship with that client.  An attorney-client relationship is formed regardless of the limited scope of the representation or the temporary nature of the representation.  Therefore, the freelance lawyer has an attorney-client relationship even if he or she never meets with or speaks to the client, or the hiring lawyer never discloses the use of the freelance lawyer to the client. 

Colorado Ethics Opinion 105 is unambiguous on this point: "an attorney-client relationship exists between the [freelance] lawyer and the client(s) represented by the engaging law firm for whom the [freelance] lawyer provides services...notwithstanding the temporary nature of the relationship or the interposition of the law firm."  The Opinion further states "a [freelance] lawyer represents the client of the employing lawyer or law firm."  Colorado Bar Association, Formal Ethics Opinion 105, Opinion on Temporary Lawyers, May 22, 1999.  

Because the freelance lawyer forms an attorney-client relationship, all of the obligations flowing from that relationship are binding on the freelance lawyer.  "The [freelance] lawyer must consider and observe all ethical duties arising from the attorney-client relationship" and "the application of various provisions of the Colorado Rules of Professional Conduct is determined based on such attorney-client relationship."  Colorado Bar Association, Formal Opinion 105.

Freelance lawyers must therefore i) act competently; ii) evaluate whether representation of a client represents a conflict of interest with a current or former client; iii) assess confidentiality issues and maintain confidentiality and attorney-client privilege; and iv) evaluate financial arrangements with both the hiring lawyer and the client.  I will discuss each of these issues in turn in later posts. 

In the next post, I will discuss how freelance law is analogous to limited scope representation or unbundled legal services.

Of course, rules and ethical obligations may vary by jurisdiction, and this post does not constitute legal advice. 

 

 

 

 

 

 

 

 

Ten Things To Know About Freelance Law: #2 Pros and Cons of Freelance Law

 

In this post, I will consider the pros and cons of using freelance legal services, from the perspective of the hiring lawyer. 

A freelance lawyer can serve the needs of the hiring lawyer and their client in many ways.  The American Bar Association recognizes that “the outsourcing trend is a salutary one for our globalized economy.”  American Bar Association Standing Committee on Ethics and Professional Responsibility, Formal Opinion 08-451, Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services, August 5, 2008. 

A freelance lawyer may provide cost-effective representation to a client of limited means who might not otherwise be able to afford a lawyer.  When a hiring lawyer bills their client for freelance legal services as an expense rather than a legal fee, they must pass it on without any markup or surcharge.  Because freelance lawyers usually charge a much lower hourly rate than lawyers associated with a firm and directly representing clients, the client benefits from this arrangement.

Conversely, the hiring lawyer can markup the freelance lawyer’s time or impose a surcharge.  This becomes a source of profit for the hiring lawyer.  There are ethical constraints on the imposition of a surcharge for a freelance lawyer’s work, which I will discuss in another post.  But, subject to ethical obligations, profiting from a freelance lawyer’s work allows the hiring lawyer to bill more hours and generate a higher profit.

Improved workload management is an important benefit of using freelance legal services.  Colorado Rule Of Professional Conduct 1.3 states that “a lawyer shall act with reasonable diligence and promptness in representing a client.”  Failure to exercise the required diligence can have serious negative consequences for both the lawyer and the client.  Engaging a freelance lawyer allows the hiring lawyer to outsource overflow work to another lawyer and maintain diligence and promptness.

Although freelance lawyers can work with any size law firm, solo practitioners and small firms can really benefit from the increased capacity and flexibility that a freelance lawyer offers.  One of the major problems facing solos and small firms is that they do not have the option to spread the workload over more lawyers during busy times.  Freelance lawyers give solos and small firms the option to increase their capacity without the long-term commitment and expense of adding an associate or partner. 

Finally, freelance lawyers may offer very specialized legal services.  The hiring lawyer can take advantage of the freelance lawyer’s expertise and experience for a discrete matter.

Although freelance legal services may be a boon for both the hiring lawyer and their client, there are some potential drawbacks. 

First, the hiring lawyer may have a duty to supervise the freelance lawyer.  I'll discuss the hiring lawyer's supervisory obligations in detail in a later post.  

Second, the hiring lawyer may have a duty to disclose the use of a freelance lawyer to their client, and using a freelance lawyer might not fit with client expectations.  I'll discuss the duty of disclosure and informed consent in another post.  If a client expects that their lawyer will be the only person handling their case, they may object to the use of a freelance lawyer.  A key feature of a successful freelance law relationship is that the hiring lawyer accurately measures and manages client expectations. 

In the next post, I will discuss the attorney-client relationship. 

 

Of course, rules and ethical obligations may vary by jurisdiction, and this post does not constitute legal advice. 

 

 

Ten Things to Know About Freelance Law: #1 Basics of Freelance Law

In this post, I will cover the basics of freelance law: the lawyers involved and the arrangements that they may choose to make for the provision of legal services.

Freelance law is essentially when a non-employee lawyer is retained by a lawyer or law firm to provide legal services on behalf of their clients.  The American Bar Association states that “the term contract lawyer…mean[s] any lawyer or law firm who is not employed permanently for general assignment by the lawyer or law firm engaged by the client.”  American Bar Association Standing Committee on Ethics and Professional Responsibility, Formal Opinion 00-420, Surcharge to Client for Use of a Contract Lawyer, November 29, 2000.  According to the Colorado Bar Association, “a temporary lawyer represents the clients of the employing lawyer or law firm.”  Colorado Bar Association, Formal Opinion 105, Opinion on Temporary Lawyers, May 22, 1999.

The non-employee lawyer may be called a temporary lawyer, contract lawyer, or freelance lawyer.  Although these terms all mean the same thing and the ethics opinions use them interchangeably, they may carry slightly different connotations.  Contract lawyer seems to be a more dated term and may imply that the lawyer is working through a placement agency or other third party.  Freelance lawyer is a more updated term and may imply that the lawyer does not work through an intermediary. 

Lawyers choose to do freelance legal work for many reasons.  For some, childcare or home-life balance considerations are paramount and freelance work provides flexibility.  Other lawyers simply do not want to be tied to a traditional brick-and-mortar practice because they want to travel or be able to work from anywhere.  Some lawyers freelance for a limited time while in between more traditional jobs or freelance as a way to supplement their primary income source.  For others, freelance work is their main income source or how they plan on practicing long-term.

The freelance lawyer is only half of the freelance law equation.  The other half is the lawyer or law firm that hires the freelance lawyer.  This lawyer may be called a retaining lawyer, engaging lawyer, employing lawyer, hiring lawyer, or outsourcing lawyer.  Again, these terms all mean the same thing and the ethics opinions use the terms interchangeably.

A freelance lawyer and hiring lawyer can choose to work together in a wide variety of ways.  The hiring lawyer could use a legal services placement agency to retain a freelance lawyer, such as when a firm outsources a document review project.  Or, the hiring lawyer could directly engage the freelance lawyer as an independent contractor.  The freelance lawyer could work onsite, using the hiring lawyer’s office space and equipment.  Conversely, the freelance lawyer could work completely remotely and never share a physical space with the hiring lawyer.

The freelance lawyer and hiring lawyer could have a close and ongoing relationship and work together on many client matters.  (I will discuss when a freelance lawyer is deemed “associated with a firm” for conflicts purposes in another post).  Or, the freelance lawyer and hiring lawyer could have an attenuated or one-time relationship, with the freelance lawyer providing legal services for only one client or one matter.

The freelance lawyer might work exclusively for the hiring lawyer during their relationship.  This is often the case when the freelance lawyer works full-time on a discovery or document review project for a few weeks or months.  Or, the freelance lawyer may work for many hiring lawyers simultaneously.

The freelance lawyer and hiring lawyer have many options to craft their relationship to best serve their needs and the client’s needs.

Next week, I will consider the pros and cons of freelance legal services.

 

Of course, rules and ethical obligations may vary by jurisdiction, and this post does not constitute legal advice. 

 

Ten Things To Know About Freelance Law: Introduction

Have you ever wondered what freelance law is all about?  Some lawyers immediately grasp the nature of freelance legal services, while others are unfamiliar with this business model.  In either case, both the freelance lawyer and the hiring lawyer should carefully consider a few issues before deciding to work together. 

Over several weeks, I will explore various aspects of freelance law and freelance legal services.  I'll cover some of the logistics involved in freelance legal services and discuss the major ethical considerations.  This series, called “Ten Things To Know About Freelance Law,” will cover:

·       The Basics of Freelance Law

·       Pros and Cons of Freelance Law

·       Who is Working for Who

·       Unbundled Legal Services

·       Disclosure to Client and Informed Consent

·       Conflicts of Interest

·       Confidentiality

·       Billing Clients for Freelance Legal Services

·       Supervision of a Freelance Lawyer

·       Fee Agreements with a Freelance Lawyer

I am a Colorado freelance lawyer and serve Colorado lawyers, so I will consider American Bar Association Ethics Opinions, the Colorado Rules of Professional Conduct, and Colorado Bar Association Ethics Opinions.  Of course, rules and ethical obligations may vary depending on jurisdiction, and these posts do not constitute legal advice.

I hope you’ll follow along.

-Sarah