How Being a Freelance Legal Professional Came to Be

Guest blog post, courtesy of NAFLP member Stephanie R. Ellis, J.D.

First, I have to say that I never knew the level of satisfaction involved in working for yourself. I was not one of those people with a deep desire to be an entrepreneur. When I was in law school, I dreamed of getting hired by a decent law firm and doing what was asked of me. I always wanted to succeed at whatever was before me and grow from there. However, things do not always go as planned.

After law school, I started working. Fast-forward three years and here I am. I have been fortunate to have very good work experience, but in the last couple of years, I did not feel like my skills and talents were being utilized to the level I knew I was capable of. Although, I made lasting professional connections, I did not have the challenge I longed for. Consequently, a door opened to step out on my own ...

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The true nature of legal freelancing - setting the record straight

There are many misconceptions about legal freelancing on the internet, so much so that I am compelled, again, to explain the fundamental differences between “freelance legal professionals” and other things such as “contract attorneys.”

Freelance legal professionals are self-employed

Freelance legal professionals are their own employers, maintain their own office, pay their own taxes, arrange for their own insurance and benefits, set their own schedules, set their own fees, sets their own working conditions, and market their services directly to law firms and inhouse legal departments. Freelance legal professionals do not work directly for, nor get paid by, ultimate clients. They do not work for, nor get paid by, an employment agency. Freelance legal professionals, whether licensed attorneys themselves, or paralegals or other service providers, work on an independent contractor basis for licensed attorneys who have the relationship with the underlying, or ultimate, client.

Freelance legal professionals sometimes work on a project-by-project basis, or may have a long-standing relationship with a law firm, doing work on a long-term and ongoing basis. The key distinction between the freelancer and an employee, however, is that the freelancer is paid as a 1099-reportable independent contractor, whereas the employee is paid as a W-2-reportable employee. Other distinctions flowing out of that relationship are the level of control over how the work is done, where it is done, and whether the worker can do work for other law firms.

“Contract attorneys” are employees of agencies

The type of work that is more commonly known phrase “contract attorney” or “contract lawyer” is actually that of an employment relationship between an employment agency and the legal professional (this arrangement is also common with other legal support personnel). The employment agency contracts with law firms for the use of their (the agency’s) employees to perform work on a temporary basis. The agency bills out for the worker’s time, billing rates that are marked up from the hourly rates paid to the workers. The agencies are, as employers, responsible for withholding taxes and, at least theoretically, responsible for insurance and benefits. Agencies, pursuant to their contractual arrangements with law firms, control working schedules, work location, working conditions, fees, and marketing (in general) to law firms and inhouse legal departments. They can, and often do, cancel scheduled assignments without any cancellation fees to the contract attorneys.

Work for legal employment agencies is on an assignment basis has many barriers to transition from temporary employment via agency to direct employment with the law firm. These barriers often include segregation of contract attorneys from the firm's associates and partners, and substantial payments due to the agency by a law firm wanting to “buy out” the temporary worker's contract. The temporary employee usually has no voice in negotiations over such buyouts, nor do they have any say in working conditions or pay rates.

Why do we at NAFLP care about such distinctions?

NAFLP was designed to assist professionals in the legal industry to gain and maintain the benefits of self-employment, to take control of their careers, and run financially successful businesses. “Contract” or “temporary legal professionals” have little control over their careers and have to sit and wait for their phone to ring with a job assignment. Freelancers are meanwhile out marketing their services, networking, and building successful businesses and never have to simply wait for someone else to hand them a job.

In 2005, the U.S. Bureau of Labor Statistics compiled some interesting data regarding the differences between several types of contingent and alternative employment arrangements. They found that “fewer than 1 in 10 independent contractors said they would prefer a traditional work arrangement.” By contrast, 56 percent of workers employed by temporary help agencies wanted a traditional work arrangement. Source: U.S. Bureau of Labor Statistics, “Alternative employment arrangements and worker preferences,” originally published August 4, 2005.

Horror stories abound about the poor working conditions and career dead ends awaiting any legal professionals working for legal employment agencies. Blogs such as “Temporary Attorney: The Sweatshop Edition” explicitly solicit “horror stories” and seek “help expos[ing] the nasty sweatshops, swindling law schools, and opportunistic staffing agencies.” My Attorney Blog recently posted an article entitled “Disregard Anything Positive I’ve Ever Said About Contract Attorney Work - I’ve Finally Come To My Senses.” With such “marketing,” who would possible want to work that way?

By contrast, personal experiences of freelance legal professionals consistently reflect job satisfaction, financial success, and increased ability to have work-life balance. I have worked as a freelance attorney off and on for 16 years, sometimes full-time and sometimes in combination with my own solo law practice. I have found freelancing to offer endless opportunities and challenges and look forward to receiving projects from my law firm clients. We at NAFLP want others to enjoy the same positive experiences.

A definitive textbook on contract and freelance lawyering

The concept of contract lawyering is foreign to many in the legal profession, but it doesn’t have to be anymore. In the most comprehensive book I have found to date on contract lawyering, "The Complete Guide to Contract Lawyering, What Every Lawyer and Law Firm Needs to Know About Temporary Legal Services" by Deborah Arron and Deborah Guyol, you can get a solid understanding of this segment of the legal industry.

The “Complete Guide” begins with a short history lesson about the structural development of the legal profession in the last century, and how the trends of “the megafirm and the billable hour, advances in technology, and individual lawyers' rejection of the existing law practice model" have lead to the growth of today’s market for contract legal services.

Using real life examples, the book looks at each side of the equation – what contract lawyers should know, and what hiring lawyers should know – and concludes with a section of joint concerns such as ethical issues, labor laws, and malpractice concerns.

For potential contract lawyers, exercises help the reader determine whether contract lawyering is right for them, and then talks about marketing, setting rates, finding work, and staying in business. The pros and cons of staffing agencies are also discussed.

“Contract work is not the right solution for every unhappy lawyer. But it’s not fraught with horrors either. As with most choices in life, real benefits coexist with definite disadvantages.”

Likewise for law firms, the book separates myth from reality, and then walks through the steps necessary to find and appropriately use contract lawyers to augment one’s practice. One of the featured attorneys is Trisha Mathers, a 41-year-old solo practitioner who had been working 15-hour-days and only making a moderate income. By coincidence, she got pitched by a contract attorney just when new motherhood and pneumonia were pushing her to the brink. She liked his work and soon had four contract lawyers working for her on various aspects of her work, allowing her to provide better service to her clients and earning a “very respectable living” while working an average of 30 hours a week.

I had some disagreement with the authors on terminology. Their hallmark criteria for contract work is being of a “temporary” nature, even though the book discusses both working for staffing agencies and working for yourself. For NAFLP, there is a bright-line distinction between “contracting” (working as an employee of a staffing agency) and “freelancing” (working for yourself). Even casual research shows a much higher level of job satisfaction among freelancers vs. temporary/contract workers. Despite the terminology, however, the book does give plenty of examples of lawyers making a permanent career of contract/freelance work.

I consider this book an essential textbook for anyone who wants to learn the basics of contract or freelance lawyering, or wants to enhance their freelance practice.

In fact, I was so impressed with the “Complete Guide” that I contacted the publisher to get a special rate for NAFLP members. Go directly to the publisher’s site - http://www.decisionbooks.com/ - to order this book and identify yourself as an NAFLP member, and you can get the book for $27.00 + free shipping. (NAFLP doesn’t get any money out of this; we just want you to have the opportunity to read this book.)

Contract or freelance? Choosing your identity is essential to job satisfaction

In 2005, the U.S. Bureau of Labor Statistics reported a job satisfaction rating of freelancers is dramatically higher than that of temporary workers. In February 2005, there were 10.3 million independent contractors. The majority of independent contractors (82 percent) preferred their work arrangement to a traditional job. In dramatic contrast, on-call workers and temporary help agency workers had only 46 and 32 percent, respectively, preferring their work arrangements. Source: U.S. Bureau of Labor Statistics, “Alternative employment arrangements and worker preferences,” originally published August 4, 2005.

The term “contract attorney” has often been used to identify any lawyer who works on a non-employee-for-the-law-firm basis. There are a large number of staffing agencies that serve as the “employer” and provide lawyers for law firms to use on a temporary basis. The same happens with paralegals, legal assistants and secretaries, interpreters and court reporters, though the appellation of “contract” is not usually applied to these other professionals.

Working for a staffing agency, however, is not the same as working as a freelancer, and confusion of the terms undermines the perception of legal freelancing as a whole.

Contract attorneys are treated as second-class citizens both in terms of law firm atmosphere, mentoring opportunities, and the perception of their resume for future jobs. The perception is that these attorneys were unable to get their first job option (assumed to be an associate position at a prestigious large law firm) and that working contract was their second choice. It is a perception of inadequacy and failure right out of the starting gate, hardly a selling point for ones competency as a legal professional.

Unfortunately, this perception is not far off of reality in most instances. Contract attorneys often work the same long hours as young associates, work on repetitious and boring work, their brains on not challenged with new problem-solving opportunities, are often denied overtime pay (because they are lawyers), have neither stability of income (projects come and go and are often cancelled on short notice), benefits, nor the promise of eventual partnership. Not only that, but many contract attorneys continue to seek a “regular” job with the same prestigious law firms that they were unable to get into initially.

The key difference between contract attorney (or paralegal, etc.) and a freelancer by definition is the identity of employer. A staffing agency simply does not have the incentive to provide a contract legal professional with any benefit other than sufficient pay to get them to come to work every day that they want them to come to work. A freelancer does not wait for a phone call and then jumps when asked to work here or there on some boring project or another that will simply pay the bills. Freelancers are employed by the only people that has the freelancer’s best interests at heart – themselves.