Tuesday, January 5, 2010

Indian law on Ethics, Confidentiality and Conflict of interest.

Ethics, Confidentiality and Conflict of Interest are three most bonafide contentions in the mind of a strategist looking for a long-term outsourcing relationship at an offshore location like India. Infact legal profession has always had a cautious approach in wake of any paradigm shift from conservatism to liberalism. When in 1992, the e-mail usage became popular and there were talks about attorney's using e-mail to communicate with their client's, the legal professionals unanimously ruled out such possibilities. The contention throughout the legal profession was that Attorney-Client communication generally involved interchange of confidential data and thus fell within the Attorney-Client privilege doctrine and that being so, attorney's should discourage e-mail communication with their client's as this may not be a secure and confidential means of communication. However, even though at a snails pace the fraternity not only accepted these electronic mails as a secure medium of communications but also started effectively deploying it.

Interestingly, offshore outsourcing, like any other field, is also not devoid of associated risks and impediments. But when the risks are countered head on and the benefits are overpowering enough then the results make histories. The Year 2009 laid a very strong foundation of the LPO industry when some of the biggest names jumped into the offshore outsourcing bandwagon. This trend is projected to continue in 2010, the details of which is discussed in a previous post and is not repeated for the sake of brevity.

In this article we would cover India's answer to any contention regarding Ethics, Confidentiality and Conflict of Interest. Though not directly binding the LPO professionals, the Bar Council of India Rules, to a minimal, are indicative of the fact that India has similar laws governing lawyers on important aspects like Confidentiality and Conflict of Interest. In India, The Advocates Act 1961 and the Bar Council of India Rules govern the practice of Law and professional ethics. Let us proceed to analyze the Indian and U.S. provisions on some important aspects of Professional Ethics.

Unauthorized Practice of law

The U.S. Model Rule 5.3 addresses a lawyer's responsibility to supervise non-lawyer assistants thereby placing the ultimate responsibility on the US attorney for any deliverable. Likewise, the Indian Counterpart is bound by a similar provision contained in the Bar Council of India Rules. Part VI – Rules Governing Advocacy – Chapter II – Standards of Professional Conduct and Etiquette – §IV – Sub Section 37 of the Rules state that, "An advocate shall not permit unauthorized practice of law by any agency". This Rule read along with §29 of The Advocates Act 1961 recognizes advocates duly registered with the Bar Council as the only class of professionals eligible to practice law and bind them with a duty to discourage UPL (Unauthorized practice of law).

Conflict of Interest

The U.S. Model Rule 1.7 outlines the basic rule regarding Conflict Of Interest, namely that "a lawyer shall not represent a client if the representation involves a concurrent conflict of interests" i.e. representation of one client would negatively impact simultaneous representation of another client. The Bar Council of India Rules, Part VI – Rules Governing Advocacy – Chapter II – Standards of Professional Conduct and Etiquette – § IV – Sub Section 14 checks Conflict of Interest in Indian legal profession. The Rule states that "An advocate shall, at the commencement of his engagement and during the continuance thereof, make all such full and frank disclosures to his client relating to his connection with the parties and any interest in or about the controversy as are likely to affect his client's judgment in either engaging him or continuing the engagement".


In U.S., confidentiality of client's information is governed by Model Rule 1.6, which states, "a lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent…………", the elaborate discussion to this is in the Formal Opinion 2006-3 (NY). The NY Opinion recommends US attorneys, looking to outsource their legal process to offshore jurisdiction, to ensure that foreign non-licensed workers understand the heightened duties imposed on attorneys in US (emphasis applied). This makes it all the more necessary and desirable for us to understand the Indian perspective for it. Although, India does not have a legislation specifically dealing with confidentiality of data, nevertheless, the Bar Council of India Rules - Part VI – Rules Governing Advocacy – Chapter II – Standards of Professional Conduct and Etiquette – § IV – Sub Section 24 states that, "an advocate shall not do anything whereby he abuses or takes advantage of the confidence reposed in him by his client". This needs to be read together with - Part VI – Rules Governing Advocacy – Chapter II – Standards of Professional Conduct and Etiquette – § IV – Sub Section 19 – " an advocate shall not act on the instructions of any person other than his client or his authorized agent". The joint reading of both these provisions reflects the Indian Lawyer's statutory requirement to abide with client's confidentiality.

These rules are indicative of the fact that legal profession in India is no less a noble profession. Indian lawyers have similar Professional Ethics and have Disciplinary Committees guiding them. Now when the Indian LPO's hire these lawyers, they undergo formal induction to be trained and made attuned to the different aspects of the LPO functioning. They are further made to acclimatize with the corporate working environment, confidentiality and responsible behavior as mandated. Essentially, these concepts of Confidentiality, Ethics and Conflict Of Interest are instilled within the DNA of these LPO professionals. Even otherwise there is no difference between a US based Contract Attorney and an Offshore Attorney. To illustrate, when a New York based attorney hires an attorney from outside NY but within US to do some portion of his work then by the virtue of definition the latter is not an attorney vis-à-vis the former's jurisdiction. Now the same impediments of Confidentiality, Conflict of Interest and Unauthorized Practice of Law is sustained in retaining a Contract Lawyer as from India as much from outside NY. Inter alia this is a plain and simple view of answering the bonafide contentions in the mind of an individual looking to offshore location like India to outsource his legal processes.


Neha said...

Yes,how true.confedentiality and data security are a major concerns for the LPO industry in
India. We weretaught about confidentiality and security measures to be taken by us regarding the projects handled by us. Even our team mates wouldnot come to know about any projects an individual wold be given to head. were taught elaboratel regarding the ABA rules, fifth amendment and the US Constitution regarding the various privileges for example the attorney client privlege, the workproduct and the like. We were also HIPAA compliant company. I do not think the small players are even aware regarding the HIPAA compliance. We were strictly prohibited to take any electronic data device inside our operational areas. We were every day brain washed regarding thestrict cofidentiality matters.

Passport Office BC said...

But why these rules are not adopted in India by GoI where the confidential personal information is sold out for a consideration to the marketing agency by allowing devices to move into computors department.Sometimes we fails to understand the source from where an agent is sending us emails asking for buying insurance product

Parvez said...

What about UK based clients. The article mainly deals with ABA rules but doesnt shed much light on the issues that would be faced by the UK law firms. It would be useful if more can be discussed about confidentiality and conflict issues relating to the english law firms as the tides are changing and more UK law firms are accepting to the idea of LPO more so with the advent of new concept of alternative business structure in the Legal Services Act.

vakils to lpo said...

@Neha - I agree intoto with your contentions. Infact in a blog post on recession, I raised some of these issues

@Passport office BC - corruption in Govt. offices is a separate issue and is being fought at different levels by all govt. be it India or US.

@ Parvez - I appreciate your concerns, I am working on the UK laws and very soon you will find new post on that.

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