The use of temporary legal staffing by law firms and corporate legal departments is on the rise nationwide. This increase has been spurred by the ever-rising amount of electronic data being used in litigation and by the need for human resources to collect, review and produce these materials. The cost associated with this e-discovery process is enormous. As recently reported by The National Law Journal, due to the increase in electronically-stored data, the cost of document discovery is expected to rise to $2.9 billion by 2007. Attorney review is often cited as the most expensive part of the process.1
In an effort to cut costs and increase efficiency, law firms and corporate legal departments are turning to outside staffing agencies for assistance in managing discovery projects - including electronic data and traditional paper documents. The National Law Journal 's 2005 survey of the nation's 250 largest law firms revealed a significant increase in temporary attorney placements from the previous year: the number of contract lawyers in large firms grew 11%, a further increase over the astounding 55% growth rate in 2004.2 Of the 147 firms responding to The American Lawyer 's Am Law 200 Survey in 2005, 77% said they currently used contract lawyers or planned to do so.3 Moreover, with growing frequency, corporate legal departments supplement their own staffs with contract attorneys, secure preferred vendor arrangements with a particular staffing agency, and guide the selection of contract attorneys who will work with their outside counsel.4
The growing interest in utilizing contract staffing is not surprising - the benefits of employing a contingent workforce to staff document reviews and to fill specialized positions are well documented. Briefly, some of the advantages may be summarized as follows:
Bill rates for contract attorneys are far lower than for permanent workers. In the largest law firms, a junior associate's hourly bill rate can range between $200-350. In contrast, the hourly bill rate of an experienced temporary document review attorney typically averages between $60 and $75.
By hiring contract attorneys, firms and legal departments avoid other costs associated with permanent employment. These costs include the overhead related to recruiting applicants; administrative expenses linked to payroll; benefits costs such as health insurance, pensions, vacations and sick pay; contributions to workers' compensation and unemployment insurance; and payroll and social security taxes. Expenses such as these may add 50% to an employer's payroll costs.5
Using a contract workforce allows for optimum staffing of particular projects without undertaking long-term employment obligations. Given this flexibility, employers can easily reduce the contingent workforce when necessary - either after completing the document-heavy stage of a litigation, or in the event of a general economic downturn.
In utilizing a staffing firm, employers avoid the time and expense of recruiting and hiring permanent attorneys to fill temporary vacancies caused by illness, sabbatical or FMLA leave; or to staff short-term projects requiring particular skill sets.
Using contract workers can improve morale among permanent employees and improve the efficiency of the discovery process. Whereas associates often perceive document review assignments as unsophisticated and not conducive to career advancement, temporary professionals are specifically hired to work on these matters.
Some legal staffing firms offer dedicated document review spaces and other services and amenities.
Taking cost economics, efficiency and practicality into consideration, the above benefits validate the need for contract legal professionals in a variety of situations. What remains is the selection process - locating and securing the right temporary staffing partner for you. The remainder of this article focuses on several factors to consider when making such a determination.
Corporate legal departments and law firms must research their potential staffing partners before engaging them - whether hiring for specific projects, issuing RFPs to legal staffing companies, or instructing outside counsel regarding hiring contract professionals. Naturally, much of this information is of the type common to any vendor you may retain: how long the company has been in existence; its corporate structure, including parent, affiliates and subsidiaries; its financial reports; the extent of its relevant insurance coverage; its invoicing policies; etc. Several other categories are particularly relevant to the staffing industry and should be specifically addressed:
Who Are The Staffing Company's Clients?
Legal staffing companies may be restricted by confidentiality obligations from disclosing exhaustive lists of past and present clients, yet they should be able to provide a partial roster of client law firms and corporations, including the names and contact information of key references. Remember to ask about the company's engagements within your particular industry. It is important to determine the staffing agency's ability to recruit a pool of qualified legal candidates with experience in that particular sector - be it securities, financial services, information technology, or another industry. If your business is unusual, confirm that the staffing company understands your requirements, and discuss its recruiting strategies for providing excellent candidates.
Where Does The Company Do Business?
Sometimes corporate legal departments require their staffing partners to recruit qualified candidates only in particular communities. Typically, however, corporations require staffing in the numerous locations where they maintain offices. Moreover, the discovery phase of litigation may well involve retaining outside counsel in multiple cities and retrieving documents from warehouses or other repositories where the corporation does not normally conduct business. Learn where the staffing provider has offices, as well as its recruiting capabilities in these locations. It is equally important to ascertain the company's ability to recruit and staff projects in locations where it may not have an office.
How Does The Company Recruit And Staff Candidates?
Your potential staffing partner should provide a detailed description of its recruiting practices. First, the staffing company should query its clients regarding assignment length, work location, hours, titles and number of positions. It is then incumbent upon the company to search within its pool of professionals for qualified professionals, and to use best practices to recruit outside this pool. Determine how the company accomplishes this - through advertisements, internet postings, college and law school career centers, or other community resources. In addition, it is crucial that the staffing provider interview extensively - in person - any candidate it proposes to provide to you, in order to assess the candidate's professional skills as well as his motivation, financial expectations and geographic limitations. The need to staff a project may often arise at the eleventh hour. Ascertain the staffing company's round-the-clock ability to staff projects on short notice. Ask the company to provide available statistics on the length of time needed to recruit and fill orders.
What Are The Company's Quality Assurance Practices?
It is crucial that your staffing partner pre-screen candidates for required professional certifications and bar admissions and status, work history, educational degrees and certificates, and professional references. Verify the company's experience in conducting other screenings you may require, such as criminal background checks, drug and alcohol tests and credit checks.
Also confirm that your staffing partner can guarantee that each member of your contingent workforce will enter into a confidentiality agreement in such form as you may request. Additionally, the staffing company should be able to pre-screen candidates for conflicts of interest. Typically, staffing firms do not supervise the substantive work performed by their candidates and are aware only of the general nature of the candidates' assignments. Nevertheless, supply the company with a generic conflicts approval process - they can "qualify" individuals as part of the general interviewing procedure, shortening the response time when a specific job request is received.
How Does The Company Treat Its Contract Professionals?
A happy contract attorney is a productive contract attorney. How does the staffing provider prevent turnover while retaining the best candidates? What benefits does the company provide? Benefits may - and should - include insurance coverage, vacation pay, 401(k), participation in the federal Transit Voucher program, the opportunity to earn referral bonuses and more. In this regard, all staffing companies are not equal; make sure that you select a company that treats its contract workers as dignified professionals.
What Supervisory And Administrative Support Does The Company Provide?
Especially in the context of large document reviews, what administrative tasks does the staffing company provide? Does the company have designated employees to respond to client and candidate needs at all times? Discuss how timesheets, paychecks, expenses, meals, travel arrangements and absences are managed. How does the company perform internal quality audits and deal with problem employees? Can the company implement process controls and reporting procedures to suit your needs?
Also ask about the company's relationships with other key service providers, such as copying shops, electronic discovery vendors, furniture suppliers and computer and other equipment suppliers. Can the company provide telephones, copiers, scanners, fax machines, computers and other equipment? Does the company provide computer and other technical support?
Does The Company Provide Designated Space To House Discovery Projects?
At least one recent article has highlighted the poor working conditions reportedly existing at some document review sites. These spaces can be dirty, overcrowded and poorly ventilated.6 It is important to ask your potential staffing partner if it offers a comfortable, secure workspace to accommodate electronic or traditional document reviews. If so, ask what furniture, equipment and supplies are offered in the space. Other important amenities include high-speed Internet connectivity, availability of air conditioning and heat, freight access, kitchen facilities, storage space, offices and conference rooms. If possible, ask for a tour of the document review site. If the company has no such facilities, inquire about whether it can obtain such space on your behalf - quickly .
Asking these types of questions will certainly provide you insight into the practices and procedures, as well as the overall business culture, adopted by your potential staffing partner. Every staffing company is different, and a thorough, initial due diligence will ensure you are making the best choice for your business.
1Leigh Jones, "Faced with Data Explosion, Law Firms Tap Temp Attorneys," The National Law Journal, Oct. 14, 2005.
2NLJ 250 Survey, The National Law Journal, Nov. 14, 2005.
32005 Am Law 200 Survey, as cited in 2006 Hildebrandt/Citigroup Client Advisory, March 1, 2006.
4Jones, supra note 1 .
5Vincent R. Johnson and Virginia Coyle, "On the Transformation of the Legal Profession: The Advent of Temporary Lawyering," 66 Notre Dame L. Rev. 359, 375 & n. 78 (1990).
6 See Julie Triedman, "Slaves of New York; Law Firm Temps Are Furiously Blogging about Their Work Conditions," The American Lawyer (March 2006).
Published May 1, 2006.