Contract Attorney Work and Overtime Pay: What's the Deal With That?
Our recent post about contract attorney work, part of Non-Top-Tier Law School Week here at ATL, generated almost 200 comments. We're happy to report that we have more for you on that front.
Here's a question from a contract attorney reader:
I've done some contract attorney work (doc review, ick) in the past and have been offered jobs that pay a flat fee of $35-$45 an hour, but want 60 to 80 hours a week.The Fair Labor Standards Act seems to say that professionals (attorneys) are only exempt from OT pay when they're salaried. We contract attorneys, obviously, don't fall within that category. It also seems to say that it's illegal for an employer to make an employee waive that right to overtime pay.
Any idea why it is that so many major law firms can hire contract staff for flat rates and make them work overtime without OT pay?
More after the jump.
Our tipster continues:
FLSA basically says that everyone gets overtime except those who fall under an exemption, one of which is for professional employees, which explicitly includes "Any employee who is the holder of a valid license or certificate permitting the practice of law or medicine or any of their branches and is actually engaged in the practice thereof" (29 CFR 541.304). In addition to being a professional, there are other requirements to meet the exemption (including being paid on a salary basis, which we aren't, but that requirement is waived for lawyers).The only wiggle room I see there is whether we are "actually engaged in practice" of law. That's the thorny part. I did talk to a woman at a large New York temp agency who said that ALL paralegals must receive OT pay for overtime work. There is a clear distinction between paras and licensed attorneys. I'm not sure what the rule is for JDs...
I'm admitted and not making OT. i think there's a decently strong argument that doc review isn't "practicing" by any measure.
Well, that's debatable. Are all those hapless junior associates in Biglaw, earning their $160K while spending months on end doing doc review, not "practicing"? If the FLSA definition of the practice of law is the same as it is for professional responsibility purposes (and we don't know whether it is or not), then the "practice" of law is defined very broadly. If document review calls upon you to exercise some legal judgment or apply legal knowledge -- e.g., is this document responsive, based on the facts and legal theories in the case; is this document subject to attorney-client privilege -- then it might constitute the practice of law.
But does any of this matter? Our tipster goes on to note:
Good luck finding the firm to sue 1/3rd of the firms in the city. Also good luck finding plaintiffs (who would have to be ready to be blacklisted from any firm that was brought into the suit).As the WSJ piece nicely reminds us all, it's hard enough to find work as it is...
Any thoughts on the subject of contract attorney work and overtime pay? Please share them, in the comments. Thanks.
Earlier: Contract Attorney Work and Overtime: What's the Deal With That?
(59) Comments
uno
First!
And my firm tells us not to employ them more than 35 hours a week to avoid the OT, or if we have to, they get paid OT
I worked as a contract attorney and did receive overtime pay. Maybe it's just the agency that tipster is with?
You're supposed to be professionals. You want overtime? Give me a break.
If contract attorneys get overtime, then all associates below third or fourth year should get overtime too.
Shut up, you whiners. If you work 80 hours/week @ $45/hour x 50 weeks, you'll gross $180,000. FOR DOING NUMBNUTS DOC REVIEW!
I've also received OT pay as a contract attorney, however I did not work directly for a firm but rather a temp agency. Maybe that's the difference.
Why shouldn't they want overtime since they don't get benefits? All first years in BIG LAW are basically monkey scribers so it's not like it's more taxing or difficult than doc review.
correct me if I'm wrong, but a contract attorney is not an employee of the firm, but rather an independent contractor and therefore has no rights to any employee benefits at all. Si?
Maybe K attorneys should unionize, put on orange vests, and start whistling at female case assistants; that, or stop whining and remember that your services are only worth what people want to pay you for them.
Yeah, that independent contractor argument worked well for Microsoft, it only cost them 124 million.
Doc review gets overtime at least here in CA - the agencies I have used when hiring temp lawyers have clearly specified it, and I have friends taking time off from BigLaw that are doing it and have mentioned overtime repeatedly.
If you're not getting paid overtime and being asked to work more than 40 hours a week, on an hourly basis, to do doc review, you're getting screwed.
Most jobs pay OT. Just don't accept the jobs that don't. The OT is how us doc reviewers make 6 figures and pay our loans back. However, it is considered the practice of law in NJ.
Some firms/projects will cap hours to avoid overtime, but in the six months that I did contract work, I always got overtime for time over 40 hours. In DC at least, the range was usually around $30 for licensed attys, $35+ for DC licensed attys.
TWELTH, bitchzs!
Hey, 12:07 - speaking of, what ARE "case assistants" or "project assistants"? My firm has an army of these, but not in my group. I really have no idea what they do, but I have a good theory on what the hiring criteria are.
Haha, ya and I'm always thireenth!
12:11, Honestly, I have no idea, except that apparently they don't do transactional work and are therefore of no use to me, especially since my secretary is spectacular. I feel you on the hiring criteria though.
The contract attorneys my firm hired definitely got overtime. So the associates managing the case review had to set limits, i.e., only work 8 hours a day and do not do overtime unless you receive explicit permission.
There's a lot about the arrangement of contract attorneys that may be appealing to some: (1) Lots of flexibility (they can travel for six months, rarely work weekends, and often leave at a reasonable hour) and (2)Pretty high pay (11 hours a day M-F calculated at 8 hours x $45, 2 hours of 1.5x OT pay at $67.50, and 1 additional hour of 2x OT pay after 10 hours at $90 = $2925 a week, or a gross of $140K per year).
11:49 - you're supposed to be a lawyer, so you should have at least a passing familiarity with the concept of abiding by labor laws.
i get benefits as a contract attorney
also, its funny that lat keeps posting a contract but being document review has nothing do with contracts
also, you should do exposes on all the various contract attorney departments that exist in NYC--it's a ridiculous world out here
Contract attorneys are not independent contractors, they are at will employees of the temp agency that employs them and signs their checks. One of the basic requirements for contractors is that they be licensed practitioners, and as such are subject to all applicable standards of practice while on the job. Therefore, even if it is mindless document review, it constitutes the practice of law and ethical violations such as over-billing could lead to bar sanctions.
Having been both a Biglaw associate and a contract attorney, I can assure you that each job bears its own burdens. As a biglaw assocaite I suffered the stresses of working biglaw. As a contract attorney, I slept well every night despite the knowledge that the project could end at any time leaving me scrambling for my next paycheck.
I worked one contract job where the wage changed three times, hours changed several times, we had overtime pay for some of the time and everything was in constant flux. Not necessarily great, but that year I earned over $100,000 sitting in a chair clicking a mouse while I listened to books on tape on my ipod.
Contractors run the entire gambit from very intelligent people who would be good attorneys anywhere and had a few things break the wrong way or don't like practicing law to people who shouldn't have been admitted to whatever TTT they attended. It is a very broad field and one likely to become larger because it is very difficult to justify a first-year associate's billing rate for a mindless task when that associate's rate has been inflated to offset an inflated salary.
In DC, the going rate is 35$/hr to 40 hours, then time & a half ($52.50) for hours past 40/wk. The gigs that don't offer overtime pay for overtime work are usually a straight $45/hr. So, you don't get overtime pay, but get $10 more per hour for the first 40 hours.
$45/hr is better to 53 hours, worse if you work more than 53. Not working at all is also worse than $45/hr past 53 hours/wk.
Do the math and make your choice.
12:14 - Trying reading about the "Professional Exemption." Lawyers are professionals and are exempt from overtime. If you're getting OT, it's because the employer thinks you're not working as a lawyer.
Here's the difference: temporary attorneys aren't guranteed to work more than 40 hours a week, and, since most of their contracts are only for two or three months, they often go for weeks between jobs. So, while on paper a contract attorney can earn more than a first-year associate with their overtime pay, they never get enough hours to actually do so. Furthermore, since there really aren't "second-year" contract attorneys, they're sort of stuck in a dead-end job.
Don't get me wrong, I've done contract work, too, and it paid my bills. Having said that, I don't think that associates at big firms really have a right to play the aggreived "I can't believe these lousy contract attorneys earn more than I do!!" card, because that's looking at only one small part of the total picture.
I have a question for contract attorneys, and while I think I know the answer, I am seeking confirmation: Are you responsible for your own CLE fees, Attorney registration fees, etc.? I would guess the answer is yes, but am curious.
Professional Exemption doesn't apply to K attorneys. As other posters have pointed out, K attorneys don't have a contract directly with the assigning firm, they have a deal with a fancy temp agency.
And unless that deal is salaried, more than 40 hours/week = overtime.
To qualify for the learned professional employee exemption, all of the following tests must be met:
* The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
* The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
* The advanced knowledge must be in a field of science or learning; and
* The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
Can someone post the going rate for contract attorneys in the Los Angeles area?
12:51 - I'm not a K attorney yet, but I am looking and interviewed with temp agencies (I am also taking Jersey CLE) - I have to pay for it and for my dues
12:55 - You are ignorant. Please shut your mouth. Whether the employer is a law firm or not is irrelevant.
1:02 - Exactly. If an employer pays a contract attorney overtime, it's because the employee does not "exercise . . . discretion and judgment" or the JD is not actually required to do the job.
Essentially, if the employer thinks a monkey could do it, he pays overtime. It has nothing at all to do with the contractual status of the IC/employee.
If that scam worked, don't you think every employer would use temp agencies to avoid OT? Microsoft got burned to the tune of multiple millions for trying to pretend their employees were ICs or Temps.
re: 12:18's post
There have been a couple of articles in the last 2 years about the "staff attorneys" at big law firms. Most of the big firms hire "staff attorneys" at slightly less than 2/3 of associates' pay (but with all the benefits) to do document review work. They are not contract attorneys--they're usually full time employees of the firm, with six month reviews. In 1Q 2006, Skadden paid $90k each. It's cheaper for the firms than dealing with the temp agencies. "Contract attorneys" get brought in at these firms for the overflow. Other firms use contract attys exclusively.
And all the firms should hope that their doc review attys are using independent legal judgment when flagging privileged and other "hot" documents. Unflagged docs usually are only spot checked in the 2nd review.
If a temp agency pays contractors overtime it has f**k all to do with the legal test involved and everything to do with what the market will bear.
Amen, 2:00.
1:26:
No. If an employer pays overtime, it is b/c the employee is not "compensated on a salary or fee basis." K attys are paid by the hour, no?
2:02 - You are putting the cart before the horse.
The firms/agencies pay on an hourly basis because the can't pay contract attorneys on a salary basis. They are non-exempt employees and must be paid overtime. The easiest way to keep track of that and to reduce costs is to pay by the hour.
If firms thought they could pay a salary to temps and force them to work 12-15 hours a day, they would. Just like they do with their associates.
Temping on a long term basis is never good. How can one survive without benefits of any kind, health, vacation, 401K, flex spending.
You at that point would be better off working as a PERM paralegal or legal secretary. After a few years you can make upwards to 80-85 base, not including overtime. With overtime you can make really good money. Plus the quantifiable benefits.
Ah, but people won't listen. They're too prideful and hung up on title, or that "they've worked too hard" etc. So go without benefits is what I say. The money is good. with OT you can easily crack 6 figures. Easily.
Do Contract attorneys have malpractice insurance, and if so, do they buy it themselves or are they covered by the agency?
Also, I've heard that (at least here in NYC), some temp firms do offer medical insurance after a certain number of hours worked (something around three months or so). Anyone else hear this or something similar?
I met with a Temp Agency last week - you get everything:
- Weekly salary
- Paid time off
- helath, dental and vision
- accidental and disability insurance
- qualified transportation expenses
- 401K
- life insurance
This is all through the temp agency, not the firm that the K attorney works for
I got OT as a contract attorney, but I don't know where this $45/hour talk is coming from. Most I ever heard in Philly was $35, and that was after two years on the job. New York paid even lower, since there was a greater supply of unemployed lawyers.
Read 1:02 again slowly, compensation may be either on a salary or fee basis so long as the amount paid exceeds $455/week. There is plenty of case law to support this interpretation. Contractors are almost surely exempt, and I would love to see the opinion where a judge writes that time spent on document review by an attorney does not constitute work requiring specialized knowledge or skill. Even if they were not exempt, temp agencies would pay them whatever the market will bear.
I worked as at a temporary staff attorney doing document review on a large project at a large law firm (AmLaw100). I was hired directly by the firm, and I was paid the going rate for an associate my level in my city, divided by 2000 hours (the billable req't). No benefits.
I did NOT get paid OT. But still, in those 6 months I earned more than the associates of my seniority because I was paid for every hour I worked above and beyond the 2000 min.
Not a bad gig, but I left for something more permanent.
2:26--the catch is, similar to COBRA temp agencies charge you A LOT MORE for those same bennies than you'd pay if you were an employee of a law firm.
"If contract attorneys get overtime, then all associates below third or fourth year should get overtime too."
They do. It's called a bonus.
Does your contract assignment require you to actually work in the office? If not, then
1. hire a buddy to farm some of the work out for you, (you don't know someone who wouldn't want to pick up an extra few hundred bucks on the side?)
2. pay him 15$ less per hour than you receive for the work.
3. profit.
Oh yeah and don't forget
4. quit whining. "boohoo, i have too much of an opportunity to make money, poor me"
(1) Correct, there's no "professionals" exemption if you're paid hourly.
(2) It doesn't matter if the contract atty is formally an employee of the temp agency rather than the law firm. If s/he works at the firm exclusively for an extended period, the law firm is a joint employer under extensive FLSA case law.
(3) I was a P-side attorney before I became a professor; trust me when I say that there would be zero problem finding a plaintiff-side law firm in NY willing to sue every big boy firm in NY or elsewhere. I'd be shocked if even 1 in 4 plaintiff-side firms expressed reservations about suing a big law firm.
(4) The obvious problem is that not many lawyers want to sue a big firm. But teh statute of limitations is 2-3 yrs, so a lawyer works as a contract atty but then leaves the practice of law, or gets a plaintiff-side job, would be an ideal plaintiff with less to lose by suing.
Isn't the idea that they pay OT because that will motivate contract attorneys to sit at their computer for more than 40 hours a week. Every hour that a contract attorney works is gravy to the firm, even if it is OT. The firm will bill that hour at a slightly lower rate than a first year attorney, but they will pay out less to the temp firm than they take in. No firm, in their right mind, would not pay OT because this just lines everyones pockets, from the firm, to the temp agency, to the contract attorney. Win, win, win.
3:23/Scott Moss: Just as legal secretaries and paras would love to unionize and don't or their efforts fail--
such is the plight of a contract atty that would "love" to sue NYC BIGLAW. You would just never do it, it is career suicide even if you thought you were working in a capacity that would insulate you from that. Helllllo. The legal world is small. Burning bridges of any kind is not advised.
I just can not get over how this post can generate so many comments from the all-mighty biglaw crowd, and yet not one can provide a succinct answer to the question. Are K-lawyers who are employed by a temp agency "exempt employees" under FLSA? I really do have to wonder where the rampant tierism comes from.
Very likely a FLSA violation. The law firm may not be liable, but the middleman who hired the contract attorney is. I've seen far weaker FLSA cases get to trial. There's a reason the vast majority of law firms pay overtime or max work at 35 hours/week.
4:00 - It's not law school. There is no simple answer. Whether someone is exempt from overtime requirements depends on their job duties (whether they're really acting like lawyers or are just doc review drones) and the manner in which they are paid. Most employers have selected not to fight that fight and pay hourly and try to limit OT to keep costs down, rather than risk backpay claims.
"I just can not get over how this post can generate so many comments from the all-mighty biglaw crowd, and yet not one can provide a succinct answer to the question. Are K-lawyers who are employed by a temp agency "exempt employees" under FLSA? I really do have to wonder where the rampant tierism comes from."
Shut the hell up. If you could read, you would have your "succint answer." For the simple reason that temps don't get paid salary, they cannot be exempt employees under FLSA.
The rampant tierism is probably based in part on reading comprehension like yours.
The salary level and salary basis requirements do not apply to practitioners of law or medicine. See 29 C.F.R. 541.304(d). Practicing lawyers don't have to be paid minimum wage, overtime, or the $455 per week salary required for other exempt professionals. They can make us work for free....
From The Destruction of Young Lawyers by Douglas Litowitz:
"In fact, a group of contract attorneys recently sued a big firm under the FLSA even though that law doesn't apply to attorneys, under the theory that the "monkey work" they were performing was so routine that it did not constitute the practice of law." (81)
Los Angeles going rate is usually $35/$52.50 for overtime, though I have heard of jobs that start at $30. If you speak a foreign language you may be able to get more. And there is room for upward mobility to a degree if you get put on a really big case--doc review in a big case can take 2+ years. If you get in early on one of these projects you can take on more of a supervisory role and move closer to the $45/hour range. Of course the project will inevitably end and you'll likely be back at $35 when your next project starts.
In Los Angeles, the going rate for K attorneys, if you are highly skilled and former biglaw, is $70 to $90/hour.
K attorneys are not exempt under the FLSA because they don't meet the salary test (i.e., they are paid by the hour).
In Los Angeles, the going rate for K attorneys, if you are highly skilled and former biglaw, is $70 to $90/hour.
K attorneys are not exempt under the FLSA because they don't meet the salary test (i.e., they are paid by the hour).