INTERNATIONAL LAW is rapidly developing as an independent field in practically every country as the isolated legal markets of generations past give way to a global market. In such a climate, issues raised by international law are intertwined with every-day domestic practice, both in the United States and abroad. Most practitioners, no matter how specialized their practice area and market, encounter international legal issues, whether by questions raised by clients with international interests or by required compliance with practice-relevant international agreements or standards.
United States law schools now often require students to take at least one international course, and most have study abroad programs, certificate programs or international law journals. (1) As a result, new attorneys have greater exposure to international legal issues before entering practice. Despite these trends, questions concerning the professional liability exposure of U.S. lawyers engaged in international practice continue to be ignored both in the classroom and in the pages of law reviews. (2)
Determining when a U.S. lawyer handling international issues has taken action that may give rise to professional liability exposure requires a thorough determination of the laws of relevant jurisdictions. Further complicatingmatters, "international lawyers" may be divided into three categories (which sometimes overlap), each facing different challenges: (i) attorneys who work abroad; (ii) those who work domestically servicing international clients; and (iii) domestic attorneys who outsource legal work to foreign legal service providers. This article considers the professional liability challenges faced by United States lawyers in each of these categories, addressing the possible bases for professional liability, the impact of foreign law differences and certain limited ways to reduce the cost of potential liability. (3)
Working in the International Arena
United States attorneys working abroad and domestic attorneys working with international clients encounter similar legal issues, and many laws apply to both without regard for their actual geographical locations. However, for purposes of establishing professional liability, differences exist between these two classes of lawyers, and these differences may act to limit or increase the likelihood of being faced with civil action.
The United States attorney abroad is often an in-house attorney working for a multinational that either conducts business in the United States or is headquartered in the United States. For foreign companies, an expatriate attorney may be responsible for compliance with applicable United States law, expediting the employer's entrance into the United States market, financial or real estate issues or international trade. These attorneys are generally physically located outside the United States but are responsible to their client for matters of United States law. Expatriate attorneys working at a foreign law firm or a foreign office of a United States firm will have a greater variety of clients, but their practice areas and potential causes of liability are similar to those of expatriate in-house counsel. Accordingly both will be treated similarly.
Jurisdiction is an overlooked cause of concern of professional liability for the U.S. lawyer working abroad. The international lawyer (living and/or working abroad) needs to consider which countries may assert jurisdiction over his legal work, and accordingly, which laws and professional liability rules to which he is subject. While lawyers abroad may not anticipate that the United States would assert jurisdiction over their actions, on the basis of nationality alone most United States lawyers working abroad will be subject to United States law. Lawyers practicing abroad may also be subject to the laws and/or professional liability standards of other jurisdictions. Under public international law, three different theories allow a country to assert jurisdiction and apply their laws over persons. These are nationality, territoriality and universality. (4) Territoriality, the most familiar of these, is geographically oriented, providing that "[a] nation has the right of sovereignty within its borders." (5) A person is subject to the laws and jurisdiction of the country in which they are physically present regardless of their nationality, meaning that the lawyer abroad is subject to the laws of the country in which he practices. The nationality theory, the most important theory for United States lawyers abroad, provides "that citizens are subject to the laws of their country, no matter where [in the world] the citizens are." (6) The United States can assert jurisdiction and hold its citizens responsible for violations of United States law whether or not they are within the country's borders and regardless of whether such actions were legal in the country where they took place.
While sovereign state governments alone traditionally have the right to assert jurisdiction under the nationality theory in exercising laws, especially criminal statutes, United States courts have developed ways to assert personal jurisdiction over U.S. citizens abroad. Federal courts utilize the "minimum contacts" standard applicable for interstate cases for this instance and similar rules have been adopted by various states. (7) It is important to note, however, that federal courts have also found that they cannot assert diversity jurisdiction over a U.S. citizen domiciled abroad. (8) Under the minimum contacts test, the lawyer's contacts must be shown to be continuous, systematic and substantial. (9)
Under these theories, the United States attorney abroad with requisite minimum contacts to a state or the United States may be subject to the laws and jurisdiction of multiple countries at any one time. The attorney abroad must concern himself both with compliance to the laws of the country he is in as well as with the laws of the United States.
Bases for Professional Liability
Because an attorney abroad must comply with the rules of professional conduct of multiple jurisdictions, an attorney should consider all bases of professional liability that may arise. In addition to the rules of professional liability associated with the jurisdictions in which he or she is licensed to practice, the attorney engaged in international work may be subject to additional rules. For example, ordinary activities may implicate ethical considerations related to issues of confidentiality, conflicts, consent and outsourcing as such rules are formulated under the Model Rules of Professional Conduct. Tort liability for malpractice, negligent referral, and negligent supervision may arise from such common practices as translations and advising joint ventures. International lawyers must also consider their contractual and fiduciary duties (whether based on an employment contract for the in-house counsel or an engagement letter for the firm-based attorney).
Professional Liability and the Model Rules of Professional Conduct
Most attorneys engaged in the practice of international law are licensed in one of a handful of states, including New York, the District of Columbia, California, Texas and Florida. These states, like most U.S. jurisdictions, have adopted professional conduct rules based upon the Model Rules of Professional Conduct (Model Rules). (10) While attorneys necessarily must review and consider the rules of professional conduct relating to the jurisdiction(s) in which they are licensed, this analysis applies the Model Rules to address common challenges that arise in the practice of an international lawyer.
The practice of legal outsourcing provides an increasingly common basis for ethical considerations arising under the Model Rules. For the purposes of this article, legal outsourcing is the practice of engaging foreign attorneys and non-lawyer assistants based overseas (foreign legal service providers) to conduct United States and/or foreign legal work. Ethics rules generally apply when an attorney hires a foreign attorney, whether for preparation of work to be completed in the United States or to act as local counsel on a matter in a foreign jurisdiction. These rules apply with equal force to the actions of the foreign attorney, whether he works on his own, in a firm, or with other local attorneys.
Attorneys with an international practice often work collaboratively with foreign attorneys, and in the legal outsourcing context, United States attorneys will be responsible for the actions of foreign attorneys. Model Rule 5.1 addresses the responsibilities arising from management of other attorneys and provides scenarios in which one attorney may be responsible for the actions of another attorney. Under Model Rule 5.1(a) a law firm's responsibility to enact measures to ensure the firm's conformance to the Model Rules will apply equally to an attorney or firm which has engaged another firm to outsource services. (11) Model Rules 5.1(b) and (c) offer additional guidance on ways that failure to properly monitor intemational work lead to ethical violations.
Model Rule 5.1 (b) states that any "lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the" Model Rules. (12) As a result, an United States attorney must take reasonable steps to ensure that any foreign lawyer or non-lawyer assistant for which he has any supervisory responsibility conforms to the Model Rules. In the outsourcing context, the Ethics Committee of the San Diego County Bar Association, citing Model Rule 5.1(b), has opined "[r]etaining [an outside firm/company] does not relieve the attorney from the duty to act competently. The attorney retains the duty to supervise work performed ... [when] that work is outsourced." (13) Failure to monitor outsourced legal services (or local counsel, if the relationship is...