The Ethics of Outsourcing Lien Resolution: What to Know

Personal injury law firms live in the courtroom. Their core focus is proving causation, liability, and damages not negotiating with Medicare, ERISA plans, or hospital billing departments. Yet, as every law firm knows, cases don’t truly end at settlement. They end when liens are resolved, and final disbursement is made.

And here lies the dilemma: lien resolution is time-consuming, highly technical, and fraught with risk. Increasingly, law firms turn to outsourcing as a solution. But the question many lawyers ask is, is it ethical to outsource lien resolution?

The answer is yes, when done correctly.

Ethics Matter in Outsourcing

Outsourcing lien resolution isn’t just a business decision. It’s a professional responsibility decision. Mishandling liens can expose clients to ongoing claims, delay disbursement, or even trigger penalties such as Medicare’s double damages provision. Worse, it can expose the attorney to malpractice risk.

The ABA and state bar associations recognize that outsourcing is both permissible and often beneficial, so long as lawyers follow specific ethical safeguards.

ABA Guidance on Outsourcing

ABA Formal Ethics Opinion 08-451 provides clear direction: lawyers may outsource legal and non-legal support services, but they retain ultimate responsibility. That means:

• Supervision: Attorneys must oversee outsourced lien resolution work and ensure it meets professional standards.
• Confidentiality: Client information must remain protected, just as if it were handled in-house.
• Reasonableness of Fees: Costs must be transparent, reasonable, and disclosed to the client.

In short, outsourcing requires active oversight to ensure compliance with ethical obligations.

State-Specific Ethical Rules

Many states echo the ABA’s position, often adding their own guidance:

• New York allows outsourcing as long as fees are disclosed and result in a net client benefit.
• Ohio and Utah emphasize obtaining informed client consent and ensuring costs are both reasonable and transparent.

This growing consensus makes it clear: outsourcing is not only permissible but also practical, provided ethical safeguards are followed.

Ethical Outsourcing Benefits Clients

At its core, outsourcing lien resolution ethically is about client protection. Done properly, it:

• Maximizes Client Recovery by ensuring liens are challenged, audited, and negotiated effectively.
• Reduces Risk by avoiding errors that could trigger legal or financial exposure for both client and attorney.
• Enhances Trust by giving clients confidence that every dollar possible is preserved in their recovery.

Final Thought

Trial lawyers shouldn’t hesitate to bring in lien resolution experts, so long as they do so ethically. By supervising outsourced work, securing client consent, and partnering with trusted providers, firms can meet their professional obligations while achieving better results for their clients.

At Synergy, ethical lien resolution is at the heart of what we do. We partner with trial lawyers nationwide to reduce risk, improve client outcomes, and protect the integrity of every settlement we are involved in.