To Use Or Not To Use Contract Attorneys, That Is The Question

Document review is the most painful part of being a first-year associate paying his or her dues. So it’s hard to believe some attorneys actually choose to perform document review as their full-time job.

These attorneys are part of a new collective of temp lawyers—lawyers for hire on a contract basis to exercise a limited amount of legal work (i.e., reading e-discovery, drafts of contracts, and endless client email chains). For many recent law school grads in a hiring glut, one way to tackle those hefty student loans is to accept temporary work—wherever you can get it.

But as a firm, how much of an asset are contract lawyers?

“About 10% of all private practice jobs accepted by last year’s law school graduates were reported as temporary, a steady increase from 5.4% in 2007, according to the National Association for Law Placement.”

Because many bright law school graduates are still without work, the number of temp lawyers is on the rise. Law firms are quick to seize these drones, as document review is timely, tedious, and usually expensive.

“At De Novo Legal, founded 11 years ago, document review work, by hours, was up more than 40% so far this year, said CEO Robert Singer. It has document review centers in Washington, D.C., New York, Dallas and Houston.”

The pay is meager compared to the typical annual salary provided a first-year attorney. It can be as little as $15 per hour versus the $200 billable hour for a salaried lawyer.

“Temporary legal staffing in the U.S. is projected to increase by 25% cumulatively over the next two years, according to Staffing Industry Analysts, a temp-industry tracking group. The hourly rates that temp agencies charge for contract attorneys are just a fraction of what a first-year associate at a big law firm typically bills per hour.”

In addition, the work is ad hock, as a case or trial can settle in any given day.  But, for a hiring partner on a budget, quick turnover is exactly what makes temp lawyers attractive and inexpensive trained eyes for a firm’s fast-paced needs.

Although temp lawyers are a bargain-basement deal for law firms with copious amounts of doc review, the practice of hiring outside the firm can be unsettling for some clients. It’s important to explain to your clients why temporary attorneys are a more affordable option for their case than in-house help.

Otherwise, you may face a malpractice lawsuit similar to the one filed by a former client of McDermott Will & Emery on June 2. The lawsuit cited the law firm’s use of contract lawyers as malpractice, alleging that the firm did not sufficiently review the work done. The lawsuit also alleged the firm marked up its fees for such services.[1]

Hiring contact attorneys also opens up law firms to personnel lawsuits. “In 2004, Preston Gates & Ellis, now K&L Gates LLP, agreed to pay $700,000 to settle a certified class-action lawsuit filed on behalf of more than 300 lawyers, who were employed by the firm to review electronic records. The suit alleged that the firm acted improperly by not paying the employees time-and-a-half for overtime, or compensating them for rest breaks. The firm declined comment,” reports the WSJ Law Blog.

So if you’re considering hiring temp lawyers for that 200,000-page document review, you’ll likely get very capable, but economically overlooked recent law school graduates. At the same time, your policies regarding breaks, overtime, and pay, in addition to the transparency with which you discuss their services with your clients, should be carefully considered.

Read more about contract attorneys in yesterday’s Wall Street Journal article.

If contract attorneys are not for you, attend C4CM’s training on how to find the right full-time candidate for your firm. “Dud or Dreamboat: A 5 Step Process to Hiring the Right Candidates.

-WB

[1] WSJ Law Blog.

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