My Attorney Blog

As I mentioned previously, the current market rate for non-foreign language contract attorney work in the Washington D.C. area is $35 an hour with time and a half for overtime. However, I’ve noticed a few projects out there trying to convince contract attorneys to accept a less attractive flat rate with no overtime. While the flat wage rate is slightly higher at around $38 to $42 an hour, you are deprived the overtime benefit of time and a half, which is how contract attorneys usually make the bulk of their money.

An interesting issue that I’ve been wondering about is whether some of these flat rate agencies and law firms are violating the Fair Labor Standards Act (FLSA) by not providing its employees time and a half compensation for time worked beyond 40 hours.

Does FLSA Require Contract Attorneys To Be Paid Overtime?

I’m not attempting a complete legal analysis but my understanding of FLSA in the matter boils down to the following. Under the FLSA ,workers who are not otherwise exempt from the statute are guaranteed the right to overtime pay, or time and a half for every hour worked beyond the normal 40 hour work week. For white collar workers such as attorneys, three basic tests determine whether they are exempt from FLSA overtime requirements. If they fulfill the three basic tests, they are exempt and thus not required to receive overtime pay. If they are not exempt, they are eligible for overtime.

To be exempt from overtime, contract attorneys must satisfy the following tests:

1. Salary Level Test – Firstly, employees earning less than $23,600 per year ($455 per week) cannot be exempt. Average contract attorneys are almost certainly exempt since they are likely to earn more than the threshold.
2. Salary Basis Test - Secondly, employees must be paid a set salary and not an hourly wage in order to be exempt. However, the FLSA actually excludes lawyers from this requirement, and thus lawyers may be considered exempt even if they are paid hourly.
3. Duties Test- Thirdly, a worker cannot be denied overtime pay unless his or her duties are primarily administrative, professional, or executive in nature.

My Opinion

I think as an initial matter, contract attorneys are not independent contractors, since we are at-will employees of the agency or law firm that employs us.

Under the tests outlined above, I believe contract attorneys are exempt from the overtime requirements of the FLSA. The only question regarding overtime exemption is the third duties test of whether contract attorney work is considered professional in nature. Can we really consider document review work to be professional in nature and not merely clerical? I submit that it is. While document review does not entail mind blowing legal skills to say the least, it does require understanding of legal procedure and terminology. The legal skills and analyses required are dependent on the type of project and on the level of expected interaction between contract attorneys and managing associates. As contract attorneys, we support the project and oftentimes may be called upon to provide our legal opinion to the team and draw upon our prior experience, e.g. discussing privilege claims issues.

Additionally, as licensed professionals, we are also subject to all applicable standards of practice and conduct while on the job. Therefore, even if it is document review, it constitutes the practice of law and ethical violations such as over-billing could lead to bar sanctions.

Thus, while I don’t believe contract attorneys are statutorily required to receive overtime compensation, I do note that it has become common expected practice for document reviewers to be paid in such fashion. Currently, I don’t think there is industry consensus about whether contract attorneys are exempt from overtime requirements under FLSA. How the overtime compensation trend got started I’m not sure, but most contract attorneys today request overtime compensation and agencies predominantly oblige. I think law firms and agencies agree to pay the extra overtime now for competitive reasons rather than legal obligation. Like some commentators have pointed out, we are a finite resource.

I’m disappointed to report that the D.C. contract market is beginning to noticeably slow down. But keep your spirits up because there are still ongoing projects and a few are still in the market pipeline. When 9/11 occurred, the contract attorney market saw a major contraction and halt in the number of projects. Major contract attorney market recessions have historically lasted several months before ultimately recovering. If you are currently on a project, be diligent in your work and stay on board for as long as possible, and you may ride out this one. For those seeking employment and looking for projects, I truly sympathize. The market situation is affecting us all.

I’m sure many contract attorneys are also members of The Posse List, and if you haven’t already done so, I highly recommend registering for their e-mail listserv. They protect the identities of their members and offer plenty of contract attorney employment related information. You may have already read the recent market status e-mail from them, but here is the excerpt:

Yes, it is very slow. Things have tightened up for a few reasons, and the mega-attorney projects are far and few between. We believe it’s based on the following reasons:

1. The financial market turmoil has put a number of projects on hold. We discussed the situation with our contacts at various DC and NYC law firms (associates and staff attorneys we have known a long time who are in the loop on projects that will need contract attorneys) and they pretty much hone to the same line: “the deals that must be done by fiscal/calendar year end December 31 are in progress. Everything else can wait”. If you monitor DealBook, Deal Digest, and Deal.com you get the same story. Postings for contract attorney work on Craigslist and Monster.com are also down for DC, NYC, LA, San Francisco, and Chicago.
2. The new changes in the DOJ/FTC review process (instituted last year) have cut-down on the number of attorneys needed for projects, as well as the review time needed for those projects. For example, Google/DoubleClick, a huge deal, got done with a total of 80 attorneys on both sides. (later corrected to 90 on the Google side and 40 on the DoubleClick side)
3. We monitor Hart-Scott-Rodino filings, and they are also way down. Angela also tracks corporate activity through SEC filings via our Edgar search programs and activity is quiet.

   That does not mean nothing is going on. Based on D.C. Posse member feedback, we count between 10-15 projects out there, though all are small. NYC Posse members rang in with about 10 projects. There are not a lot of complex litigation reviews around but we counted about 3 in D.C. and 5 in NYC based on Posse member feedback. And there are a lot of small (1-3 attorney) projects.

   NOTE: We do not get/hear about/see everything. When the market is this slow, agencies can staff internally. And of course there’s Intel out in Falls Church.

   Markets will fluctuate. We saw this “dry” pattern post-9/11 through mid-2002. Our busiest listserv right now is foreign language, with Europe a close second. There are two large (comparatively speaking) reviews in Brussels: one in progress and about to ramp up. And before you swamp us with emails, the first prerequisites: you need to be an EU national with either a U.S. law degree or a U.S. LLM. Those projects are posted to our Europe listserv. Go to [The Posse List] to see/subscribe to our various listservs.

   The good news: of the 10 D.C. law firms we spoke with, we guesstimated they’d generate about 8-10 projects between now and end of the year. One of those DC law firm has 3 projects in the pipeline.

   The NYC firms saw about the same, but none are big projects. We will see it when we see it. As indicated, these were guesstimates.

If you’re an attorney, particularly if you’re a contract attorney, you must have heard or read about the recent Wall Street Journal Article regarding the lagging state of the legal employment market. There has been much debate and rumbling among contract attorneys on the matter. If you’re a new law school graduate or if you’ve been struggling to find legal employment, I’m sure the article confirms what we’ve all known for some time. Unless you attended a top tier school and you’re in the very top percent of your class, your legal employment life is going to be extremely harsh or even non-existent. Furthermore, even if you’re a top student from a top tier school, there is no real guarantee that your path will be paved in gold.

I’m currently a contract attorney. On my projects I encounter attorneys from all legal backgrounds and graduates from all law school tiers. However, whenever I bump into someone who was a great student from a top tier school like Georgetown Law, I always stop to think about how far the legal profession has fallen. Even these top tier law school graduates lament to me about how tough the market is and how difficult it is to find proper full time employment. They too are finding it extremely difficult to rise above the sea of attorneys. Many end up changing professions altogether or choose to perform temporary contract attorney work. Some toll away in jobs that pay the same as that of clerical workers as they struggle to find a way out. The drowning pain is further compounded by the often crushing student loan debt numbering in the six figures that frequently accompanies law graduates.

Too Many Law School Creating Too Many Law Graduates

There are simply too many lawyers out there and law schools are facilitating this never ending deluge of new attorneys by continuing to graduate more and more lawyers. Unlike other major professions, there are over 4 tiers of law schools and new law schools are added every year to keep up with the demand of students who blindly want to become lawyers. Many of these law school hopefuls hope to chase the commonly hyped fantasy of landing a big time job at a law firm working 40 hours a week and making millions. These law school hopefuls need to know that the legal market already has more than it can handle. There are better academic and professional options out there. Did you know there are only 1/3 as many medical schools as there are law schools? Do we really need so many lawyers? If law school bound college students only knew.

I’m glad the Wall Street Journal article was published. It helps to shed public light on a serious epidemic in the legal profession. An attorney is still a prestigious profession but when you have over saturation, it loses its prestige and you become a dime a dozen. You have all of these easy political science, English, and history majors enrolling in law schools because they don’t know what else to do with their majors. It will take time, but hopefully such discussion will cause a shift in the legal profession for the better. Despite my usual optimism, I don’t have much hope for this. There are too many stakeholders such as a large firms and law schools that will never want the lawyer making machine to slow down.