A year or two ago, South Florida legal recruiter Abbe Mald Bunt was able to place attorney clients with new jobs “in a minute.”
Now, she’s referring most clients — primarily experienced associates who were laid off — to legal staffing agencies for “contract work.”
“I’m just hoping they will get some viable employment,” said Bunt, who said she is “flooded” with résumés these days.
Bunt is not alone. As law firms downsize, laid-off attorneys and new law school graduates unable to find jobs have been turning to an option they may never have imagined at law school: becoming contract attorneys — hired guns for $35 an hour.
Yet in the past couple of months, even that field appears to be showing signs of a slowdown.
Blogs devoted to the topic of contract attorneys are rife with complaints about the lack of work, particularly in New York and Washington; sudden ending of jobs that were supposed to be long term; and the demise of such formerly standard perks as free lunches and car fare.
“The combination of the economic climate as well as the year-end and the change in administration has had an impact on our business,” said Andy Jewel of Hudson Legal, which has offices in 11 cities. “With the change in administration, any government investigation or other regulatory work is generally put on hold until the new people are in place. Work has been slow.”
Also cutting into their business is the growing popularity of outsourcing to India. Hudson Legal has countered with an ad campaign that encourages law firms to “onshore,” and choose U.S. staffing companies where there are no security or privacy concerns and where they operate in the Eastern time zone.
Several legal staffing companies have closed or are about to close in Washington, according to one staffing company owner who declined to be identified, as well as blog reports. One company that recently closed its Washington office is Atlanta-based Cambridge Partners.
Bonnie Klein, director of contract legal services for Cambridge, called the Washington market “saturated” and said the economy was partially to blame for her company’s closing its Washington office about three months ago. The Atlanta market is also “very slow,” she said.
However, the company, using lessons learned from Washington, is opening a New York office in a strategic partnership with another firm. “We expect a lot of work associated with the bailout will boost business in New York,” Klein said.
Contract, or temporary, attorneys are hired to assist law firms or companies with specific jobs and are paid hourly rates. The work, which is either done at the staffing company’s offices or at the client’s offices, is low-level document review. The going rate in New York and Washington is $35 an hour, and about 10% below that in places like Chicago, Atlanta and Los Angeles.
Contract attorneys appear a discontented lot. A host of blogs have popped up railing about life as a contract attorney, including Temporary Attorney: The Sweatshop Edition; Document Review, Texas Style; Black Sheep of Philly Contract Attorneys; and My Attorney Blog: The Life of a Contract Attorney in Temp Town, Washington D.C.
Resounding with complaints about working conditions at temp agencies — including cockroaches and a lack of air conditioning — nosediving fees and tax nightmares, as well as advice about which agencies to avoid, the blogs do not paint a pretty picture of life as a contract attorney.
One Washington attorney who did not want to be identified said that he worked as a contract attorney for a year after first moving to Washington “because it was the quickest thing I could do.”
The attorney worked for several staffing firms and was sent out to several law firms. Some places he worked were acceptable and some bad, he said. At one job, he was not allowed Internet access and had to sign out to go to the bathroom. At another job, he was allowed to listen to music on the Internet, which made the 14 hours a day he was “looking at boring e-mails” bearable.
All in all, the attorney — who has since landed a government attorney job — called contract attorney work a good stopgap for new graduates or someone new in town, but definitely not a career path.
“I can’t imagine a firm hiring anyone who had spent five years doing document review,” he said.
But another contract attorney who works at Ryley Carlock & Applewhite in Phoenix has a different perspective. More of a staff attorney — but without most benefits — George Hopwood has worked at the firm for three years, since moving to Phoenix from the Northeast.
Ryley Carlock has an entire document-review department and treats lawyers there more as employees but without benefits, inviting them to company parties and housing them in offices at the firm. The group includes retired judges, new law school graduates and midcareer lawyers like Hopwood.
Despite the fact that he has to buy his own health insurance, Hopwood said he enjoys the work. He says the pay — somewhere between $35 to $45 an hour — can translate into six figures for hard workers. And he likes the work, gets to interact directly with clients and enjoys the flexibility of being able to take several-week breaks between projects if he desires.
But Hopwood, who is single, acknowledges that the work might not be right for lawyers with families to support who need full benefits and more job security.
“Would someone want to do this for a total career? Maybe not,” he said. “For folks just starting out, they may want to do it for a few years. But I think it’s a really good and emerging field, and it works really well for me.”
Matt Clarke, a shareholder at Ryley Carlock, said his firm started its document-review department in 2005 in an attempt to maintain a more fair, healthier way of doing document review.
Most of the 40 attorneys in the department are veteran attorneys — retired in-house counsel, former judges and partners and law school instructors. These attorneys are essentially full-time employees with all benefits except health insurance. In addition, the firm may hire 10 to 20 temporary attorneys for big jobs.
“I’ve read the blogs, and we just felt it was not healthy for us, for the profession or the clients if there’s a bad environment,” Clarke said. “We decided, let’s do it different, to compete with the . . . agencies. I hope our document-review attorneys feel part of the firm.”
Clarke said he asks the attorneys at annual meetings if they would prefer health insurance or “a few more bucks an hour.” The majority chose higher rates, he said.
Pressure to cut rates
Several of the largest staffing agencies contacted by The National Law Journal acknowledged being pressured by law firms — which are being squeezed by their clients — to lower rates. Most acknowledge that they are starting to succumb to that pressure, but trying to hold the line at $35 an hour in the big cities.
“There does seem be pressure to have the rates drop, either directly from the corporate clients or from law firm clients,” said Richard Osman, co-owner of Lexolution, a New York-based legal staffing agency. “We do what we have to do. Our margins have come under pressure. We work with clients to help them in this environment.”
But Osman said his firm is “sharing the burden” with contract attorneys by decreasing his profit margins.
Rob Singer of New York-based De Novo Legal Services agreed that “there will be continued pressure on costs. The firms that will succeed are those that are producing quality yet still are able to be creative on pricing.” Singer has witnessed meals, car fare and other perks disappear in recent months.
Jeannette Derby, owner of Legal eStaffing in Washington, also is feeling pressure to lower rates. But law firms can usually persuade the clients that $35 an hour is worth it for quality, experienced attorneys, she said. Still, Derby acknowledges having paid $32 an hour on some jobs, she said.
Howrey is one law firm that uses a large number of contract attorneys — and acknowledges pushing staffing agencies for better rates as of late. The Washington-based firm has a minimum of 75 contract attorneys on the job on any given day and has had as many as 350 with large merger matters.
“We use them in the discovery process,” said Ralph Allen, chief operating officer of Howrey. “We don’t normally put a $300-an-hour or $400-an-hour associate on first-level document review. We have a process where staff attorneys and associates are monitoring and driving this process, supervising these folks. It lowers the costs for our clients tremendously.”