PANGEA3 LLC

I’ve always expected challenges to the legality of offshore legal process outsourcing, but a growing number of state and local bar association opinions (four as of this writing) have largely negated unauthorized practice of law challenges. Now comes a challenge from a Maryland law firm that lacks in legal substance and compliance with the Federal Rules of Civil Procedure, common law pleading requirements and the federal jurisdictional statutes.

Apparently motivated by a cold email solicitation from an India-based LPO provider, the law firm of Newman McIntosh & Hennessey, LLP became so concerned about protecting their clients’ Fourth Amendment rights that it filed complaints with both the Maryland and Washington, D.C. Bar Associations, and commenced an action against the LPO industry and President Bush in the D.C. District Court. Assumingly out of grave concern that it is unable to take steps to protect its clients’ confidential information, Newman McIntosh & Hennessey wants the federal courts and the D.C. and Maryland Bar Associations to give it blanket protections against the purportedly tangled web of offshore legal process outsourcing and electronic surveillance.

The whole thing is absurd but it’s received so much attention that it requires a cogent response.

Newman McIntosh & Hennessey’s Fourth Amendment argument is clever but specious because it relies on a faulty premise: that the Fourth Amendment does not apply to communications between a delegating U.S. attorney and an offshore LPO, and that the NSA will inevitably intercept the attorney’s transmission of clients’ documents to the offshore LPO without any recourse for the firm’s client. That proposition falls on its face. Surely, the complaint isn’t that the NSA can lawfully intercept a communication or electronic transmission from a U.S.-based attorney to an LPO – in essence spying on a U.S. citizen or entity – without complying with the Fourth Amendment, the Foreign Intelligence Surveillance Act and other applicable statutes?

Practically speaking, I cannot think of a situation in offshore legal process outsourcing where the NSA could intercept the transmission of documents between two foreign nationals sitting at two international points (and outside the jurisdiction of the Fourth Amendment and FISA). Ninety percent of Pangea3’s work is completed remotely, with attorneys in India accessing databases hosted in the United States. For example, if a document review is hosted in the U.S., then every electronic transmission has a jurisdictional basis in the U.S. and the privacy of the data is protected by the Fourth Amendment. As a result, the NSA cannot intercept any such electronic transmission without good cause. Conversely, if the review takes place completely offshore, then any communications with counsel would necessarily involve a U.S.-based attorney (or agent thereof) and again the Fourth Amendment protects such communications.

But let’s assume for the purposes of this discussion that the NSA is intercepting all offshore communications, including privileged communications (of course the consequences of that scenario are astounding), as I understand it, Newman McIntosh & Hennessey is claiming that the attorney-client privilege would be waived because a party transmitting otherwise-privileged communications overseas would know that the government (in this case, a non-privileged party) will see it, and therefore has not taken the requisite steps to protect the privilege. Even if this unlikely scenario were to occur, the Omnibus Crime Control and Safe Streets Act of 1968 would protect the information. Among other things, the OCCSS Act preserves the privileged character of all otherwise-privileged electronic communications that the federal government intercepts. You’ll find the relevant section of the OCCSS Act at 18 U.S.C. s. 2517(4)(”No otherwise privileged wire, oral, or electronic communication intercepted in accordance with, or in violation of, the provisions of [Chapter 119. Wire and Electronic Communications Interception and Interception of Oral Communications] shall lose its privileged character.”).

Moreover, as the American Law Institute has recognized, “[m]odern American authority generally does not insist that the client be able to exclude all possibility that eavesdroppers will overhear the communication.” Restatement (Third) of Law Governing Law §71 (2000) comment citing generally C. Wolfram, Modern Legal Ethics §6.3.7, at 264-65 (1986) “Confidentiality is a practical requirement. Exigent circumstances may require communications under conditions where ordinary precautions for confidentiality are impossible. The privilege applies if the communicating person has taken reasonable precautions in the circumstances.”

Accordingly, an attorney who transmits or receives an otherwise privileged communication internationally does not and will not waive any existing privilege so long as the attorney takes reasonable steps to preserve the privilege. Even if the NSA intercepted the communication, the privileged character of the information is retained.

Ironically, I’m not certain what Newman McIntosh & Hennessey believes to be the greater threat. Is it the NSA’s alleged interception of every electronic communication via the purported ECHELON program, or offshore legal process outsourcing? I’d like to think that it is the former and not offshore legal process outsourcing in and of itself. Ironically, the firm doesn’t ascribe any fault to LPOs such as Pangea3. The complaint does not allege that LPO providers are not capable, nor is it concerned that an LPO provider cannot assist the firm in carrying out its professional responsibilities to the firm’s clients.

Instead, the LPO provider’s apparent greatest fault is only that it is a foreign national (albeit one that is seeking to assist with U.S. litigation matters) and the NSA’s computers sit between the provider and its U.S.-based client. However, judging by the vitriolic postings I’ve read on some of the blogs since this complaint was filed, I’d say that Newman McIntosh & Hennessey is feeding upon a misplaced hostility towards offshore legal process outsourcing that simply ignores the plain facts and established applicable law.