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Internal legal departments were constantly asked to find ways to save money and do more with less. With the recession looming, legal departments are looking for new ways to employ contract lawyers to do more complicated work for less money.
Matthew Weaver, head of the temporary legal department at Major, Lindsey & Africa, said the number of legal departments requesting contract lawyers has not increased significantly. However, those who ask for contract lawyers ask for projects other than just a basic contract review.
"We saw requests from existing customers," said Weaver. "We haven't seen a boom because this trend has been picking up speed over the past decade."
Weaver said he was asked to find contract lawyers who could perform transactional work, those who could draft contracts for health care procurement and health contracts related to the Health Insurance Portability and Accountability Act.
Lea Ann King, general counsel, compliance officer, and company secretary at Toyota Material Handling in Cincinnati, said she had contracted attorneys during her 11-year career. Traditionally, King said that when someone in the legal department was on vacation, she would call in a contract lawyer to fill a temporary position.
"It was really a temporary resource," said King.
More recently, however, the pool of contract lawyers has expanded, and she said she could use them for more complicated tasks or for special projects.
“We recently submitted some to review major litigation documents. We had an external attorney review the work, but the quality and cost of the work was beneficial if contract attorneys did the review, ”King said.
She said she had no conflict between her law firms and independent contractors. At the beginning of the process, she anticipated that a litigation partner in the firm would oversee the work of contract lawyers.
More recently, when the new coronavirus pandemic closed large gatherings, King said it had hired contract lawyers to review the company's contracts with different venues and to draft cancellation agreements for those events.
“The nice thing about being an internal lawyer is that we have a budget that we can live by. The inclusion of contract lawyers was one way for us to increase the number of employees, but it did not have to take all of the necessary measures to hire a full-time lawyer, ”said Jeff Wigfield, former Hub Group Vice General Counsel in Chicago.
He explained that there are great lawyers who work on a contract basis for $ 120 to $ 130 an hour. A large law firm employee doing the same job can charge between $ 500 and $ 700 an hour.
At Hub Group, contract lawyers are mainly used to create and review contracts. Wigfield said the legal department had signed approximately 2,000 contracts in 2019 and needed help implementing these agreements.
"We also engaged a transaction lawyer on a contractual basis," said Wigfield. "If we had an M&A deal, we would use it to do the due diligence and do some of the work that would go to a company internally."
Due to the increased level of talent, contract lawyers are deployed in every area of work. Amy Lerner Hill, deputy attorney general at City National Bank in Los Angeles, told Corporate Counsel that contract lawyers are primarily used for overflow or vacation purposes. Expertise is important, however.
Her team in the bank's legal department does everything from litigation to data protection to operations. Therefore, she employs contract lawyers who can cover these specific areas.
The future of contract lawyers
Despite the increasing use of contract lawyers, Weaver said the internal lawyer won't get rid of their law firms as quickly.
"There is no substitute for a senior partner in a large-scale law firm or a senior cyber security lawyer," said Weaver.
"However, there is a lot of work that can be project-driven and that doesn't require a senior partner, but a specialized lawyer," he continued.
Wigfield said he would expect more lawyers to switch from full-time in-house or law firm to contract work.
"These lawyers make decent money and work their own hours," said Wigfield. "In-house lawyers will continue to use them to keep costs down, and the work environment has taught many people that they can be effective outside the office."
Weaver said becoming a contract lawyer is an attractive opportunity for those who don't climb the career ladder to become partners or general counsel.
“These are people who want to become a lawyer and want to have a career. However, they don't want to play political games, ”said Weaver.
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