2021 Legal Staffing Trends: Déjà Vu for Contract Attorneys?

Leslie A. Firtell

The saying “history doesn’t repeat itself, but it often rhymes” holds true in the field of legal recruitment. The growing demand for contract lawyers after the pandemic is reminiscent of what happened in the late 1990s after the recession at the beginning of the decade. I entered the legal services industry in 1997, just as contract employment was growing in importance.

The recession of the early 1990s saw many law firms lay off junior associates. By 1997, these firms were involved in a large number of multi-billion dollar conduit stocklending deals.

The problem was they didn’t have enough middle-level staff to do the due diligence. Her enormous need for real estate and corporate attorneys led her to seek out contract attorneys.

Fast forward to 2021, and we see a similar surge in contract workforce demand as the economy re-opens. There’s a lot to do, but due to similar circumstances to the 1990s – law firms have fewer lawyers on staff after the crisis – there aren’t enough people to do the job.

The Thomson Reuters Institute’s Peer Monitor Index for the fourth quarter of 2020 confirms that many law firms fired lawyers in 2020, with the average law firm employing 1.6% fewer lawyers by year-end. After a little over a year since the pandemic began, many law firms are now doing better, but many initially cut their salaries and staff because they feared the economic impact of the pandemic. But it’s not just that. There is also a growing trend for lawyers to give up their permanent, full-time contract work positions.

Technology and burnout are driving the trend

The legal industry has learned an important lesson from the pandemic: Working remotely from lawyers can be as good as working in the office. And while no one expects the work-from-home model to completely replace the traditional on-site model, the proven success of the past year and more has led lawyers to weigh their career options.

They think about it: thanks to the power of technology, they now have the choice to work remotely wherever they want and enjoy the flexibility they just haven’t experienced in their full-time office jobs.

The money for contract labor isn’t bad either. If someone earns $ 125 an hour and works 40 hours a week as a contract attorney, their annual gross is $ 260,000. In cases in which the contract lawyer is employed by the ALSP, he is also entitled to benefits. All in all, it’s no wonder that so many gifted lawyers are seriously considering or have already switched to contract work.

What made so many of them reevaluate their living conditions? Burn out. When lawyers left their offices to work from home, the lines between work and family quickly blurred.

When they were not working, they would teach at home or take care of their young children or take care of other household chores. The working hours assumed a certain fluidity, which in most cases resulted in lawyers being connected practically around the clock and available for clients and colleagues.

Of course, lawyers are no stranger to long hours. Respondents to the study of workload and hours for lawyers from Bloomberg Law said they worked an average of 53 hours per week; One in five said they billed more than 80 hours in their busiest week. But at home during the pandemic, lawyers essentially had to be “on” all the time. Burnout was inevitable.

What it means for law firms

As in 1997, law firms have been placed in a situation where they have no choice but to consider contract agents. The work has to be done after all. And we all know that there is an abundance of work. Take a look at the surge in M&A, private equity, and capital markets activity.

And just as we saw back then, even law firms and companies that have never hired a contract assistant before are turning to Alternative Legal Services (ALSPs) to help them resolve HR issues.

In the 1990s, many of the lawyers in the agency work market were there because of their circumstances: they didn’t become partners, so they became solo practitioners, or they had just left school and hadn’t gotten a full-time job yet.

The talent available today is extraordinarily strong and diverse because, as mentioned above, many of these people have made the conscious choice to do a commissioned job. Law firms looking for contract help have a choice between highly qualified, experienced and in many cases specialized lawyers. Even better? You can get his talent at a much lower cost than if you had additional staff.

I am not mentioning cost because it is an absolute priority for law firms right now – getting the job done first – but because cost is an important factor in the face of increasing competition between large and small businesses. Large firms are realizing that many legal departments and firms are using lawyers from states with lower billing rates to stay on budget.

You have to start at competitive price points; the involvement of contract lawyers in certain areas of their proposals enables them to do so. Contracting also helps smaller businesses level the playing field by giving them the ability to scale up so they can compete with large corporations on large projects.

As businesses continue to reopen and markets start to bloom again, law firms face a business onslaught that they simply cannot handle on their own. As in 1997, contract employment is able to save the day. And now that pandemic life has transformed attitudes towards the effectiveness and career potential of teleworking, it will continue to play an important role in the success of law firms in the future.

This column does not necessarily represent the opinion of the Bureau of National Affairs, Inc. or its owners.

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Information about the author

Leslie A. Firtell is the founder, president and CEO of Tower Legal Solutions. She is a 24-year veteran and pioneer in the legal human resources industry and attorney.