the first thing we do, let's outsource all the lawyers: an essay

THE FIRST THING WE DO, LET'S OUTSOURCE ALL THE LAWYERS: AN ESSAYAuthor(s): Patrick McFaddenSource: Public Contract Law Journal, Vol. 33, No. 2 (Winter 2004), pp. 443-453Published by: American Bar AssociationStable URL: http://www.jstor.org/stable/25755277 .

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THE FIRST THING WE DO, LET'S OUTSOURCE ALL THE LAWYERS*: AN ESSAY

Patrick McFadden

For the rest of the decade, no issue will pose a greater challenge or concern to employees of the Federal Government than outsourcing. The Bush ad

ministration's current proposal to outsource 850,000 jobs will dramatically alter the size and composition of the workforce directly employed by the Federal Government. There is no compelling reason why government lawyers should be exempt from consideration in this outsourcing process. The same

arguments that support outsourcing of other services support outsourcing of

government legal services.

Dovetailing with the trend towards outsourcing of government jobs is a

growing problem in the Government's recruitment of young lawyers. Rising law school costs and the failure of government salaries to keep pace with

private-sector compensation are steadily eliminating government work as a

viable career path for many law school graduates. "Between 1991 and 2001, tuition at state law schools for in-state residents jumped 140%. Meanwhile,

private law school tuition increased 76%."* Over the same time period, sal aries for lawyers in private practice increased by 80 percent, while salaries for federal government lawyers increased by only 43 percent.2 This stunning

I. Introduction. II. The Advantages of Outsourcing

III. Public versus Private Interests...

443 444 448 451 453

IV. Cost Control V. Conclusion...

I. INTRODUCTION

1. Equal Justice Works et al., From Paper Chase to Money Chase: Law School Debt

Diverts Road to Public Service 12 (2002), available at http://www.napil.org/news/index. php?view

= detail&id = 5573. 2. Id. at 14.

Patrick McFadden ([email protected]) is a third-year law student at the George Washington University School of Law.

*Witb apologies to William Shakespeare's Henry VI, Part 2, act 4, sc. 2. This title is in no way meant to minimize the seriousness of the discussion of outsourcing of government employees or to be disrespectful of those employees.

443



444 Public Contract Law Journal Vol. 33, No. 2 Winter 2004

divergence in compensation has unfolded at a time when more than half of federal employees may be eligible to retire over the coming five years.3 Com bined with the possible advantages of outsourcing, this situation strongly sug

gests that the outsourcing of legal services would provide significant benefits for the Federal Government.

Trends in law school debt loads due to skyrocketing tuition, combined with the growing disparity between private- and public-sector salaries, will only

make it more difficult for the Government to attract and retain the best at

torneys available. Due to a diminishing pool of potential recruits, it is unlikely that government agencies will be able to continue to compete successfully

with private firms in terms of quality of service. If the Government will have

difficulty attracting and retaining the most qualified individuals, the public interest will suffer in the form of understaffing or by the inadequate experi ence or qualifications of newly minted government lawyers.

This essay advocates the outsourcing of many government legal services

currently performed "in-house." It is an attempt to spur debate regarding the

primary concerns involved in legal outsourcing, including protecting the pub lic interest, conflicts of interest, and cost control.4

II. THE ADVANTAGES OF OUTSOURCING

The first and most obvious potential advantage of outsourcing legal ser vices is cost savings. One traditional justification for outsourcing of any gov ernment service is economic efficiency. While savings have not always been as great as projected or anticipated, opening government service to compe tition with private contractors is generally seen as providing better value for the Government.5 Privatization of prisons, for example, has yielded some of the promised benefits of contracting out.6

Value includes not only the absolute cost, but also the quality of service. At its most basic level, the decision to outsource government attorneys is not

3. Id. at 10. 4. This Note does not address the distinction between outsourcing of uniformed and civilian

lawyers. It also does not address the question of whether law firms or other contractors might best perform outsourced government legal work.

5. See, e.g., Office of Management and Budget, Competitive Sourcing: Conducting Public-Private Competition in a Reasoned and Responsible Manner 2 (2003) ("Both the

public and private sectors have conducted independent studies to document the effects of public private competition. Each has reached the same conclusion: subjecting in-house operations to

competition consistently generates cost savings?anywhere from 10-40 percent on average, re

gardless of whether the competition is won by a private contractor or the government."). 6. See generally Developments in the Law?The Law of Prisons, 115 Harv. L. Rev. 1838 (2002).

It is worth noting, however, that one way private contractors reduce cost is by seeking to reduce overhead. There may be certain positive externalities associated with the very government in efficiencies outsourcing would seek to eliminate. Those externalities may serve socially desirable

goals, such as advancement for traditionally disadvantaged groups or providing peacetime op portunities for veterans.



The First Thing We Do, Let's Outsource All the Lawyers 445

so different from the "make-or-buy" decision that corporations face with re

spect to the size of their in-house legal departments. Firms consider a number of factors in deciding how to strike the right balance between making and

buying legal services.7 Private attorneys with significant, specialized expertise in various sectors

can provide improved service to government agencies.8 Even departments with significant specialization?such as the Department of Justice's Antitrust Division?can benefit from outsourcing legal services. The Antitrust Divi

sion, for example, benefited enormously from the decision to hire a private sector attorney, David Boies, to represent government interests in the Micro soft litigation.9

Competition between private attorneys for government projects also will

improve service because agencies will be able to effectively fire their attorneys. If an agency is unhappy with the cost, direction, scope, or quality of the legal services being provided by a contracting attorney, the agency can fire that

lawyer or decline to hire him or her in the future.10 Accountability is enhanced in this sense by the fact that contractors are repeat players. They have every incentive to perform efficiently and deliver excellent services because they hope to receive future government contracts.11

Agency lawyers, on the other hand, are currently largely insulated from such pressures. It is difficult to fire a government employee simply because an agency thinks someone else could do the job better. This breeds ineffi

ciency.12 On the other hand, if legal services were outsourced, relief from

7. See Carlos M. Hernandez et al., Specialized Approaches to Outsourcing Legal Work, in Suc cessful Partnering Between Inside and Outside Counsel (Robert L. Haig ed.), WL SPART NER ? 26:6 (updated October 2003).

8. Again, using a company's make-or-buy decision with respect to legal services may be illustrative. See Florence A. Davis et al., The Make or Buy Decision, in Successful Partnering Between Inside and Outside Counsel (Robert L. Haig ed.), WL SPARTNER ? 3:3 (updated October 2003) (noting that one major investment bank leaves certain issues to outside counsel because "the constant exposure of the outside firms to new issues and new developments makes them both more proficient and efficient in handling those matters").

9. See Howard M. Erichson, Coattail Class Actions: Reflections on Microsoft, Tobacco, and the

Mixing of Public and Private Lawyering in Mass Litigation, 34 U.C. Davis L. Rev. 1,17 (2000) ("By all accounts, David Boies' performance at trial was an important factor in the government's trial

victory."). 10. See Developments, supra note 6, at 1883 ("Market mechanisms, such as governments' ability

to rescind or decline to renew private firms' contracts, and more generally, the potential for bad

publicity to cause a drop in firms' stock prices, further increase private prison companies' ac

countability."). While the threat of a drop in stock prices would not be applicable to law firms, bad publicity that hurt a firm's future ability to attract clients could serve as an equally effective

incentive for accountability and high quality of service. 11. Mat 1870. 12. See id. at 1885 ("It is well known that public bureaucracies have different incentives and

attitudes toward change than do private companies. Companies concerned about winning a bid,

retaining their contracts, maintaining their stock price, or just being marginally more protected against prisoner lawsuits seem more likely to overcome their institutional stasis."). See also id. at

1883 ("A private prison may have its contract rescinded. This possibility is not always as easy as

it sounds?the private prison industry is a somewhat concentrated oligopoly, though that may




ineffective representation would be a simple matter of hiring a different

lawyer.

Efficiency also would be served by the more judicious use of legal re sources. Agencies do not currently fully internalize the costs of government attorneys. The use of an attorney who is an agency employee presents no

immediate cost to an agency.13 This problem is even more acute when the Government is represented by the Department of Justice, whose attorneys are literally "free" labor for the agency represented. As virtually any economist would agree, subsidization of a service can lead to overconsumption of that service.14 This is because a subsidy that lowers the price of the good or service below its marginal cost will make that good or service artificially inexpensive. Government legal services provided to the agency for no immediately appar ent cost can be viewed as subsidized legal services. Government agencies pre sumably overconsume legal services because they do not have to bear the full costs of such services.

A very strong microeconomic argument can therefore be made that the failure to force agencies to fully bear the costs of the attorneys they use results in overconsumption of legal services. A more socially efficient allocation of resources would occur if agencies were required to fully internalize the costs of obtaining legal services, balancing the costs of those services against their

potential rewards. This is particularly true in the area of litigation. Litigation is a very ex

pensive type of legal service, and the area where subsidization of government consumption of legal services is most problematic.15 By encouraging agencies to consider other, less expensive, alternatives, the forced internalization of

legal expenses might discourage litigation in disputes where the stakes were

relatively low. While government attorneys may consider the costs of litiga tion in considering whether or not to compromise a case, they are directed

only to compromise a case where the cost of collection exceeds the amount

change with increased privatization. But as long as more than one firm is operating and the

government continues to run part of the prison system, someone will be available to take over a

dysfunctional prison, making the government's threat to rescind a contract somewhat credible."). 13. See, e.g., Joseph J. Petrillo, Are the Feds Courting Uncivilized Thoughts with Private Counsel?

Gov't Computer News, May 26, 1997, available at http://www.gcn.com/archives/gcn/1997/ may26/petril.htm ("Legal representation in litigation is free for the contracting officer. Of course, agency budgets pay for lawyers, paralegals and support staff, rent offices, and buy law books and

computers. But these resources are available to procurement staff without accounting for their use or their cost.").

14. See, e.g., Jay A. Soled, Taxation of Employer-Provided Health Coverage: Inclusion, Timing, and

Policy Issues, 15 Va. Tax Rev. 447, 483-84 (1996) ("In an efficient market, the price of an item reflects the expected utility of purchase. A subsidy, however, allows an item to be purchased for less than its true price, thereby undermining efficiency. Moreover, the artificially lower price induces overconsumption.").

15. See, e.g., Kathleen Waits, Work Product Protection for Witness Statements: Time for Abolition, 1985 Wis. L. Rev. 305, 323 ("Litigation is very costly, in both economic and human terms.

Academics and even lawyers tend to forget that every opinion is more than words on a page or a citation in a treatise. It represents expense and probably misery for everyone involved, and for

society at large.").



The First Thing We Do, Lets Outsource All the Lawyers 447

recoverable.16 If agencies did not have access to "free" legal services, they would consider not only whether the total cost of litigation would be more than the amount recoverable, but also whether this expenditure is the most efficient use of scarce agency resources.

The potential for overzealous agency pursuit of litigation is only exacer bated by the type of lawyer who may be representing the Government cur

rently. For example, litigation may not be a presumptively unattractive choice for the type of attorney or law student the Department of Justice seeks to recruit. One reason lawyers and law students go to work for the Department of Justice is the opportunity to litigate.17 The Department's website states the

following:

As a result of the demanding caseload, new attorneys are immediately involved in

handling significant litigation for the Division. Unlike their counterparts in the private sector, Civil Division attorneys receive substantial responsibility for cases from the start. They determine strategy and tactics, prepare pleadings and briefs, and manage discovery and trial proceedings. In some instances attorneys handle cases alone while, in others, they share responsibility with another attorney or team of attorneys. Typically, during the first year with the Division, a new attorney may expect to have "first chair" litigation responsibility, either at the trial level or in the appellate courtroom.18

While undoubtedly effective as a recruiting tool, this language is unnerv

ing. The emphasis on the amount of responsibility a lawyer will hold in liti

gation clearly caters to a certain type of lawyer or law student?one who wants to be in a courtroom. The culture fostered by such recruiting is arguably conducive to scorched earth, win-at-all-costs litigation strategies, but it dis

courages settlement possibilities. Instead of engaging in cost-benefit analysis as to the worth of litigating disputes, Department of Justice attorneys may prefer to go to court.

Particularly in civil litigation, where the only issue on the table may be

money, there is little reason for the Government to adopt a win-at-all-costs

litigation strategy without engaging in the type of cost-benefit analysis used in private-sector decision making. Lawyers recruited by law firms without the

Department of Justice's emphasis on trial practice may be less likely to em

brace combative and costly litigation strategies without considering other al ternatives.

If the lack of direct cost to agencies and the type of lawyer recruited by the Department of Justice do create a propensity to litigate, this propensity obviously creates direct costs to taxpayers in the form of increased litigation

16. U.S. Attorneys'Manual ? 4-3.200. 17. See Daniel Marcus & Jeffrey M. Senger, ADR and the Federal Government: Not Such Strange

Bedfellows After All, 66 Mo. L. Rev. 709, 711 (2001) (adapted from remarks by Daniel Marcus, Earl F. Nelson Memorial Lecture at the University of Missouri-Columbia School of Law (Nov. 9,

2000)) ("Another barrier to setdement we face is that many young lawyers come to the Justice

Department because we offer trial experience that they cannot get elsewhere."). 18. Civil Division, Dep't of Justice, The Role of the Civil Division and Its Attorneys, at

http://www.usdoj.gov/civil/brochure/brochure.html(last visited Dec. 22, 2003).




expenses. It also, however, has indirect costs. By forcing the Government's

private-sector opponents to spend more in defense of government litigation, the Department hits the private sector in the wallet twice in the same trans

action: once through the expenditure of taxpayer dollars to pursue litigation and a second time in forcing private opponents to rack up large legal bills of their own.

III. PUBLIC VERSUS PRIVATE INTERESTS

Of course, possible cost savings and improvement in service are not the

only relevant factors in considering the option of outsourcing legal services. Government attorneys carry significant responsibilities in serving the public interest. There are legitimate concerns that the farming out of government

legal work to private-sector attorneys would not adequately protect the public interest. Whether due to inadequate cost control, conflict of interest, or fa

voritism, there is an almost instinctive concern over the energy or rigor with which private attorneys might protect and serve the public interest.19

These considerations are not novel, however. The Federal Government has contracted out for legal services in the past, and will continue to do so. A successful program of outsourcing legal services would pay careful attention to lessons learned from prior outsourcing programs in other contexts.

The Federal Deposit Insurance Corporation's (FDIC) practice of contract

ing out for legal services provides an example of mechanisms put in place to ensure that private attorneys provide legal services in an ethical fashion that maintains the public interest as the ultimate goal of government lawyering. Professor Luneburg's analysis of government contracting for legal services examines the FDIC's practice in detail.20 One interesting approach the FDIC took to minimize the possibility of unnecessary billing for duplicative research

projects was to create a "brief bank" of previously conducted major research

projects.21 The FDIC also provided outside counsel with detailed instructions for representing the agency.22

At a more general level, there is an understandable concern that govern

19. See Jody Freeman, The Contracting State, 28 Fla. St. U. L. Rev. 155, 172 (2000) ("Many people have a viscerally negative reaction to the idea that some government functions?those

they view as symbolically important or inherently governmental?might be contracted out to

private parties, notwithstanding the possibility that private actors may perform those functions more cost-effectively.").

20. William V. Luneburg, Contracting by the Federal Government for Legal Services: A Legal and

Empirical Analysis, 63 Notre Dame L. Rev. 399 (1988). 21. Id. at 456 ("These documents are made available to outside counsel, who are, accordingly,

cautioned not to embark on a significant research project until it has been determined whether the materials in the brief bank contain relevant information.").

22. Id. ("Retained attorneys are given a variety of instructions regarding their conduct of the case in the written guidance documents supplied by the FDIC. Specifically, outside counsel are advised to avoid multiple representation of the firm at meetings or depositions, rotating lawyers knowledgeable about FDIC matters and using FDIC work to train personnel.").




ment lawyers, motivated by more than merely a paycheck from the Govern

ment, may feel a higher sense of duty and service to the public interest than

private lawyers. Government lawyers are arguably motivated at least in part by the opportunity to serve their country. Proponents of keeping government lawyers "in house" would certainly argue that this results in a higher standard of ethical conduct, as well as greater fidelity to the public interest, among government attorneys.

The reality is that ensuring lawyers are motivated to represent their clients' best interests is a complex question that evades facile stereotypes of private sector attorneys as mercenary and ethically bankrupt. The reality of a lawyer's

motivations is more multidimensional.23 Formally belonging to an organiza tion is not necessary for a lawyer to be strongly motivated and loyal to that

organization.

Many private-sector attorneys feel a strong sense of loyalty to their firm's

long-term institutional clients. Attorneys at law firms also have strong mon

etary incentives to perform in an efficient, timely, and responsive manner.

Their performance is further motivated by personal ambitions and a desire to advance in their firms. Lawyers also are motivated by personal loyalty to their co-workers and their firm. Finally, private attorneys have existing ethical

mechanisms in place requiring them to pursue the best interests of their cli ent.24 These motivating factors and ethical mechanisms would remain in place as the Government contracts out for legal services. In short, it is not necessary for a lawyer to belong to a government agency to conduct herself or himself in a responsible, ethical, and efficient manner.

Most corporations, for example, have internal legal departments, but also

rely on the services of outside counsel. Those corporations place their faith in the ethical behavior and zealous advocacy of outside lawyers. Why should the Federal Government be unable to make similar use of outsourced attor

neys? Private companies monitor the work product of their outside counsel to ensure effective, efficient, and responsive advocacy. Monitoring of out

sourced attorneys by the government agencies they represent would serve the same purpose.

Contracting out for legal services also could result in problems such as

corruption and conflicts of interest. Initially, there is the ubiquitous concern

of corruption entering the source selection process if more legal services were

contracted out to private attorneys. Concerns over outright favoritism, nep otism, or corruption in this process, however, would certainly not be unique

23. See Mary A. McLaughlin, Beyond the Caricature: The Benefits and Challenges of Large-Firm Practice, 52 "vand. L. Rev. 1003, 1012 (1999) ("We want to do excellent legal work?both because we believe that it will help our clients 'win' and also because we are professionals. We take pride in that excellence.").

24. See, e.g., Model Rules of Prof'l Conduct R. 1.3 cmt. 1 (2002) ("A lawyer should pursue a matter on behalf of a client despite opposition, obstruction or personal inconvenience to the

lawyer, and take whatever lawful and ethical measures are required to vindicate a client's cause

or endeavor. A lawyer must also act with commitment and dedication to the interests of the client

and with zeal in advocacy upon the client's behalf.").




or novel to legal services contracts. Ethical guidelines could be put in place to address such concerns.25

There is also the possibility of direct conflicts of interest. Private attorneys already deal with conflicts of interest in their daily practice, and again, have

existing legal and ethical mechanisms in place to police those conflicts.26 These mechanisms certainly could be strengthened contractually in the event

the Government decided it required additional protection from the possibility of direct conflicts.27

Organizational conflicts of interest also could be an obstacle. This might be of particular concern if the attorneys were hired through a large contractor

providing a variety of services and potentially having many different subcon tractors. Nevertheless, there are existing mechanisms for addressing such con

flicts.28 Furthermore, conflict mitigation plans29 used by current government contractors could easily be applied to contractors providing legal services or to large law firms. Different groups or divisions of attorneys in a firm or

company could be screened or sequestered to prevent unauthorized flow of information.30

Government agencies considering hiring private attorneys might be even more concerned with the possibility of issue conflicts?that is, conflicts of interest arising from a lawyer's area of practice rather than his or her particular clients. Would private lawyers zealously advocate the public interest if it ran counter to the generalized, rather than specific, interests of their firm's cli ents? For example, would an outside lawyer with a significant antitrust prac

25. See John C. Coffee Jr., "When Smoke Gets in Your Eyes": Myth and Reality about the Synthesis of Private Counsel and Public Client, 51 DePaul L. Rev. 241,245 (2001) ("Nonetheless, the simplest solution may be an ethical one that does not seek to change the structural control over the

litigation decision. The American Bar Association (ABA) has adopted the Model Rules of Pro fessional Conduct, which contain Model Rule 7.6 (R.P.C. 7.6), which restricts 'pay to play' prac tices and effectively bars attorneys and law firms from accepting government legal engagements if they made or solicited political contributions 'for the purpose of obtaining the business.'").

26. See Ronald D. Rotunda, Ethical Problems in Federal Agency Hiring of Private Attorneys, 1 Geo. J. Legal Ethics 85, 88-89 (1987) ("For example, if the government hired a private attorney to collect a debt, and the debtor was the son or daughter of the private attorney, a

possible conflict of interest would exist and the attorney must either refuse to accept the case or must disclose the conflict and secure knowing consent if the conflict is to be waived. The lawyer, in short, would follow normal procedures; the fact that the client is the federal government rather than a local business would raise no special problems and would affect neither the result nor the

method of handling the conflict."). 27. See Erichson, supra note 9, at 35 ("Given the distincdy public role of the government

lawyer, it can be troubling to see government entities hire private litigators to pursue matters of

public importance... These concerns, however, are not unique to government's litigation func

tions, but rather apply to virtually every example of government outsourcing. Thus, accountability and corruption concerns should be addressed as matters of decision-making authority, bidding processes, and government ethics regulation, and need not be addressed ... as a particular prob lem of public and private lawyer roles.").

28. See FAR 9.505. 29. See, e.g., Thomas J. Madden et al., Organizational Conflicts of Interest, Briefing Papers, July

1994, at 8. 30. See id. (noting that "In this regard, law firms have become very adept at the use of'Chinese

walls' to protect against conflicts of interest in the attorney-client context.").




tice charged with representing the United States in a landmark antitrust suit be sufficiently aggressive in pursuit of that action? Or would attorneys in that situation possibly pursue artificially narrow holdings to avoid setting prece dents that would be unfavorable to their firm's as-yet-unidentified future clients?

In one landmark antitrust suit, David Boies's client, the United States,

appeared to have no such difficulty entrusting Mr. Boies with their represen tation in the Microsoft antitrust case. That case might be seen as a paradig

matic example of a potential issue conflict, given Mr. Boies's extensive anti trust practice. Not only did such conflicts fail to materialize,31 but Mr. Boies's

representation in this case was much heralded.32 More fundamentally, attorneys representing the Government would make

tactical, not policy, decisions. An attorney representing private parties makes tactical and procedural decisions while the client makes decisions about the broader scope and goals of the litigation.33 Agencies would retain control over

policy objectives that litigators, whether employed by the Government or not, are poorly qualified to define.

IV. COST CONTROL

An additional concern of farming out legal services to outside lawyers is

controlling costs. Because most lawyers bill by the hour, there is concern that

the Government would have no ability to contain the cost of legal services. Outside lawyers, so the argument goes, would have no incentive to work

efficiently, instead hoping to maximize the number of hours they spend on

any given project in order to maximize their fees. One obvious response to this concern is that it is not unique to government

representation. Nongovernmental entities that retain outside counsel also must be concerned with the specter of unrestrained gluttony on the part of their attorneys, who attempt to bill as many hours as possible for any given project, resulting in the costs for legal services spiraling out of control.34 Private-sector companies, however, factor this concern and the resultant

31. Erichson, supra note 9, at 35-36 ("The use of David Boies as trial lawyer in the govern ment's Microsoft case, for example, did not create any serious trouble in terms of the roles of

public and private lawyers. There was no indication that Boies functioned differendy in that

matter than if he had been a full-time Justice Department employee, except that he had more

experience in complex trials than any of the Justice Department antitrust lawyers."). 32. See supra note 10. 33. See Model Rules of Prof 'l Conduct R. 1.2(a) (2002) (" [A] lawyer shall abide by a client's

decisions concerning the objectives of representation and ... shall consult with the client as to

the means by which they are to be pursued."). 34. See Douglas R. Richmond, The New Law Firm Economy, Billable Hours, and Professional

Responsibility, 29 Hofstra L. Rev. 207, 209 (2000) ("An alarming number of partners from blue

chip firms have been criminally prosecuted or professionally disciplined, or both, for billing fraud.")




monitoring costs into their make-or-buy decision for legal services.35 To argue that this problem would be worse for the Government than for the private sector, one must accept as an underlying assumption a particularly spectacular inability of the Government to monitor costs.36 As part of a legal outsourcing program, agencies would have to carefully monitor periodic billing state

ments, much as private companies are forced to do.37 Such careful monitoring would, of course, necessitate the maintenance of

a small, though informed and reasonably sophisticated, legal staff to ensure

continued efficiency and adequacy of performance.38 Any candid discussion of outsourcing legal services must concede that monitoring costs would almost

certainly diminish, perhaps dramatically, some of the cost savings theoretically achievable through outsourcing.39

Competition among firms for government legal services contracts also could help minimize the risk of billable hours spiraling out of control. In

theory, since law firms and the agencies they represent would be repeat players with future contracts on the line, firms would have a strong incentive to pro vide fair value for their billing.

Another possible solution would be to change the contract vehicle to avoid

creating incentives for contract attorneys to maximize time spent on projects. The type of contract used for the provision of government legal services does not have to be a time-and-materials contract simply because that's how it's

generally done in the private sector.40 For example, any significant legal project could be divided into a series of

discrete tasks. Contracts could be awarded on the basis of a firm-fixed price for the satisfactory completion of each task.41 Admittedly, some monitoring

35. See Richard J. Rawson et al., Fee Arrangements, in Successful Partnering Between Inside and Outside Counsel (Robert L. Haig ed.), WL SPARTNER ? 8:2 (updated October 2003) ("Inside counsel and other managers of the corporate client's purse strings have sought to more

effectively monitor the cost-effectiveness of their outside lawyers through methods such as bud

geting, bill review and fee audits."). 36. Actually, I would concede that assertion as an initial matter. Nevertheless, if agencies had

to cover the cost of legal representation out of their own budgets, their abilities to control the

allegedly profligate billing habits of private attorneys would likely blossom with startling rapidity. 37. The type of mechanism for monitoring and feedback can affect the costs of monitoring.

See Luneburg, supra note 20, at 408 ("Written status reports may be required, although some

corporations seem to think that this is not a cost-effective way to maintain control and supervi sion. It may create billable attorney time which can be saved by a phone call.").

38. See, e.g., Insourcing versus Outsourcing, ACCA Docket (Sept./Oct. 1996), WL 14 ACCA Docket 70, 71-72 ("It was our consensus, however, that even if the company is looking to out source more of its legal work, there would still be a need for someone from within the company, probably a lawyer, to manage the outside function.").

39. Jonas Prager, Contracting-Out: Theory and Policy, IS N.Y.U.J. Int'l L. & Pol. 73, 99-100

(1992) ("In fact, proper monitoring may be so costly as to reverse the advantage of contracting out.").

40. See, e.g., Douglas R. Richmond, In Defense of the Billable Hour, 14: 2 Prof. Law. 1 (2003) (terming the hourly billing method "one of the principal measures by which lawyers are com

pensated by their clients"). 41. Law firms may be uneasy about such a contract vehicle because of the possibility of legal

projects requiring greater effort than initially foreseen, but this is a reality confronted by any government contractor bidding on the basis of a firm-fixed price. If law firms wanted the work,




would still be required, but the fear of private attorneys abusing time-and materials contracts by double billing the Federal Government could be sub

stantially mitigated by this approach.

V. CONCLUSION

This essay has attempted to address some of the advantages of privatizing legal services, as well as some of the difficulties that would be encountered by a massive outsourcing of attorneys. It is my contention that the possible bene fits of outsourcing legal work in terms of cost savings, improved service, and

more pragmatic decision making regarding litigation strategies more than

outweigh the concerns of such outsourcing. Regardless of one's views on the subject, however, it is imperative that both

private lawyers and federal agencies begin to think about the challenges of such privatization. The push to outsource a substantial number of government employees cannot summarily exclude attorneys and be considered consistent or efficient. Now is the time to decide what ethical and financial precautions need to be taken to maintain high standards of performance and contain costs.

they would have to accept the possibility that, from time to time, they would underestimate the amount of work a task required.



the first thing we do, let's outsource all the lawyers: an essay

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