Avoiding Conflicts of Interest When Leveraging Third-Party Legal Document Automation Providers

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By Ian C. Schick, PhD, JD, CEO & Co-founder of Specifio (originally posted here on Oct. 1, 2018)

As outsourcing certain legal work to third-party service providers gains popularity within law firms, it is important for lawyers to fully understand the potential risks of conflicts of interest, as well as guidelines for avoiding these issues in the future.

There is always the potential for conflicts of interest and misuse of private information when legal work is outsourced to a third-party lawyer or law firm representing an opponent or competitor of the lawyer’s client. Likewise, there is also the risk of these issues when outsourcing work to non-attorney service providers, including automated services, which is the focus of this conversation. For example, a conflict may arise when two parties use the same document automation service and the system uses confidential information from one party to help complete the work product for the other party.

Attorneys cannot outsource their ethical obligations.

Similar to how an attorney must ensure there is no conflict of interest that would prevent representation, lawyers are responsible for confirming third-party services do not perform work in a way that creates a conflict. It is important to minimize the risk of conflicts by making a reasonable effort to learn about the service provider’s assurances. [ABA Standing Committee on Ethics and Professional Responsibility, Formal Opinion 08–451.] For example, the outsourcing lawyer should investigate the service’s procedures for managing and obviating conflicts.

There are a couple questions an attorney should ask prior to outsourcing work to a legal document automation company. What are the handling and storage procedures for client information? And are there any employees of the service provider that may have access to this information? If such access exists, there is a potential for conflicts and, in such cases, background checks, non-disclosure agreements, and other precautions may be advisable.

Various bar associations have concluded in their official opinions that:

“The attorney must also recognize that he or she could be held responsible for any conflict of interest that may be created by the hiring of [a third-party] Company and which could arise from relationships that Company develops during the attorney’s relationship with Company.” [Florida Bar Opinion 07–2 (2008); also see Los Angeles County Bar Association, Opinion 518 (2006).]

As document automation technology grows more prevalent and sophisticated in the legal sector, it is becoming more important for automation providers to develop their own set of high ethical standards around preventing conflicts. For a company that handles sensitive information, like patent applications, these standards are even more acute.

Full automation is among Specifio’s answers to avoiding potential conflicts and other ethical issues. Specifio’s fully-automated patent drafting service has no human intervention, meaning no person at Specifio is ever exposed to confidential information, preventing conflicts of interest from occurring at the human level. In addition, due to the fact that we do not train our machine learning models on confidential information or store information long-term, there is zero chance of one party’s confidential information being used in another party’s patent application.

Legal ethics guidelines are still catching up to today’s dynamic legal sector, which is rapidly evolving due to advancing technology. However, it is crucial that both the outsourcing lawyer and third-party service providers observe ethical guidelines that help protect confidential client information and avoid conflicts of interest issues.

For more information on Specifio’s automated patent drafting service, visit our website or email us at info@specif.io.

DISCLAIMER: The views and opinions expressed in this article are those of the author and (1) are not provided in the course of and do not create or constitute an attorney-client relationship, (2) are not intended as a solicitation, (3) are not intended to convey or constitute legal advice, and (4) are not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. The hiring of an attorney is an important decision that should not be based solely upon Web site communications or advertisements.

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