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They are the invisible work force. Without them, large, complex civil litigation and merger-and-acquisition work would grind to a halt. But these anonymous workers never appear in official law firm head counts, and many large firms hesitate before acknowledging that they even exist. At any given time, hundreds of people are working as temporary contract attorneys in the D.C. area, says Robert Joseph, who owns and runs a legal placement service � Law Resources � in the District. And right now, he says, business is booming. “Virtually all of the big firms use them,” he says. “It is very common.” Over the past decade, the use of contract attorneys has grown exponentially as an increasing number of firms began to accept the idea of using attorneys as temporary workers. “The idea used to scare them,” Joseph says. “Now, the psychological barriers have fallen.” Joseph says that when he started in the temp business 20 years ago, there were only two agencies locally that provided contract lawyers. Now there are 16. “We aren’t sharing the same slice of pie,” he says. “[The use of contract lawyers] has grown and continues to grow.” Today, large firms routinely bring in a small army of attorneys to handle the discovery process, determine privileged communications, and review documents in large, complex cases. These temporary workers allow for flexibility where firms can bulk up quickly without an arduous hiring and training process, and when the case is over, the firms don’t have to worry about letting people go or the prospect of associates sitting idle. Using contract attorneys also can be lucrative for firms. Basic hourly rates paid to contract attorneys are substantially lower than the salary and benefits package that firms pay associates, and some law firms, temp agencies say, go further by including a sizable markup in the rates they turn around and charge their clients. Hiring contract attorneys also frees up associates for more substantive work so that firms can bill them out at higher rates, says Janice James, head of attorney placement for Pat Taylor & Associates. James says she knows of a couple of firms that have each hired close to 100 or more contract attorneys this past summer, although she wouldn’t identify them. Robert Lavet, senior vice president and deputy general counsel for Sallie Mae, says that clients such as his company are wary of being overcharged for temp work. “The way that law firms use and bill contract attorneys is always a concern. “If a law firm wants to use contract attorneys, there is an appropriate use for them,” Lavet says. “But our feeling is we don’t want to be marked up.” He says that Sallie Mae is familiar with all the agencies that place contract workers and could simply hire them directly instead of paying a law firm markup. PAYING THE BILL The rule of thumb, Janice James of Pat Taylor says, is that the firms bill their clients at around three times the rate they pay the agency. “They are billed out as timekeepers,” James says, “so they are either doubling or tripling our rates to account for overtime and overhead.” But the agencies agree that the rates can vary depending on the firm, the type of work the lawyers were brought in to do, and on what the client is willing to pay. Law Resources’ Joseph says some of the firms with which his agency works bill their clients at three times the agency rate or with a small markup to cover overhead costs. And there are some that don’t mark up at all, says Joseph. Some firms, he says, see it as an ethical issue. Money, too, can be a draw for the attorneys who do temp work. Attorneys who do lower-level document review work make anywhere from $25 an hour, for those who recently passed the bar, to $50 an hour, for those with experience. A huge demand this spring for temps pushed rates up a few dollars, says Joseph. Now, most lower-level attorneys make about $30 an hour. More substantive work beyond document review can command up to $125 per hour plus the markup the temp agency receives. “For highly experienced attorneys with specialized skills, we are talking in the six figures [annually],” says Yvonne Distenfeld, president of another temp agency, Lawyers On Call. There is also a chance for overtime pay. James says firms want her temps to work from 70 to 80 hours per week. Once overtime is factored in, a lower-level temp can be making around $40 an hour. “Sometimes, they are making more than the associates that are managing them,” she says. Lavet of Sallie Mae says that, as a client, he knows that some firms do mark up the rates they charge. But Sallie Mae includes specific contract language when the company retains outside counsel that states the company will not pay the additional fees. Hiring temps, he says, should not be “a profit-making center” for a law firm. Chris Ryan, general counsel for iCode, a business management software provider in Dulles, Va., says firms that want to keep a client’s business wouldn’t try to gouge a client over temp fees. “I can’t imagine a client that would put up with that,” Ryan says. In the past, Ryan has asked to see contract attorney time sheets and agency invoices for the work. SUPPLYING THE DEMAND Arnold & Porter hires contract attorneys at least twice a year, depending on the number of mergers and acquisitions the firm is involved in, says James Sandman, the firm’s managing partner. Mostly the firm uses these attorneys to handle document review in major anti-trust cases, when the government has made a request for documents under the Hart-Scott-Rodino Antitrust Improvement Act. The act allows the government to request information about a merger before it is approved and can involve a deluge of documents. Jones Day also relies on contract attorneys to help out on labor intensive antitrust work. “We always have Hart-Scott-Rodino stuff going on,” says Mary Ellen Powers, the partner in charge of the D.C. office of Jones Day. She says the firm will hire up to 100 attorneys for contract work, but “it is very project-oriented. It ebbs and flows.” The use of contract lawyers also gives firms the ability to hire a lot of attorneys in the beginning of a project and pare down either gradually or all at once after discovery is over. “We can bring in contract attorneys pretty quickly as demand requires, more quickly than we can hire on our own,” says David O’Brien, the partner in charge of hiring contract attorneys at Crowell & Moring. Crowell & Moring uses five or six contract attorneys on a regular basis, but will ramp up that number as the need dictates. O’Brien says the firm uses the attorneys mainly for document review, determination of privileged documents. and, in some circumstances, for privilege log creation. “We use them for privilege log creation sparingly. We closely supervise that,” O’Brien says. None of the law firms contacted by Legal Timesfor this article would disclose information about the rates at which they bill their clients for temporary lawyers. BIG TICKETS Mergers and acquisitions and complex civil litigation make up about 90 percent of the work contract lawyers do, according to Law Resources’ Joseph. Antitrust litigation typically carries a demand for temps, and right now, pharmaceutical work and environmental litigation are fueling the market. With the recent recall of the arthritis drug Vioxx, Joseph believes that many local firms will be involved in these suits, generating even more demand for pharmaceutical work. However, when the economy goes south, bankruptcy and other litigation work picks up, making temporary workers consistently in demand, says Distenfeld, of Lawyers On Call. In contrast to firms like Arnold & Porter and Jones Day, Wiley, Rein & Fielding has used only a small number of temps in the past because the firm doesn’t do the kind of work, like large document searches, that traditionally lends itself to hiring contract workers, says its managing partner, Richard Wiley. For the most part, he says, “we have been able to cover our needs with our staff.” Still, Wiley says he has encouraged his firm on occasion to use contract attorneys in some of its other practices like insurance and international trade. “I personally have no problem with it. You can get some good people that way,” he says. “I am favorable to do it in the right instances.” Most lawyers doing contract work are either looking for permanent jobs or are recent law school graduates waiting to pass the bar exam. (Some firms allow contract lawyers who have yet to pass the bar to take on a full range of legal work. Others restrict these nonbarred lawyers to certain types of nonprivileged work.) Yet some law firms ask for experienced specialized contract attorneys to handle more-sophisticated matters involving international trade, investment banking, and securities. “Substantive contract work is still a relatively minor thing in D.C.,” says Joseph from Law Resources, “but in New York, it is huge.” Distenfeld says agencies like hers specialize in such high-level placements. Her agency also provides temps as fill-ins for lawyers on maternity leave or temporary disability and places lawyers at firms that experience a short-term workload increase. One example where contract lawyers can save the day due to a short-term work crunch: In the midst of a major real estate deal where, by the time a firm could bring in and train its own attorneys, the deal would be done. The demand for contract lawyers doesn’t seem likely to slow down any time soon. Distenfeld says that demand is high at the moment for contract lawyers with a background in intellectual property. She says she can’t find enough qualified temps for all the IP work coming her way.

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