Tag Archives: Rates

A message to those who hire attorneys in transition: caveat emptor!

Jill Rorem, Esq., is senior manager, legal staffing at Blackman Kallick (www.blackmanstaffing.com). Jill oversees the successful recruitment of attorneys, paralegals and contract legal professionals. Jill (and the Blackman team) staffs document reviews using qualified contract attorneys and thus, works with attorneys-in-transition daily. You can follow her at twitter.com/roremlegalstaff.

Contract attorney rates are a hot topic in the document review industry. New agencies continue to pop up and everyone is trying to offer the lowest rate possible to get a foot in someone’s door. This has significantly lowered the hourly rate paid to the contractors. Conversely, so many attorneys in transition sustain themselves as contractors and are struggling to keep their heads above water as hourly rates decline. It is disheartening that most agencies have maintained 80-100% margins and only the contract attorneys feel the pain from the downturn in rates. (Please see my August 23rd post, “Irate about contract attorney rates: A rant” for the low down). Of recent late, it was standard to pay contract attorneys $35/hr and most projects paid time-and-a-half for hours after 40. Now, they are lucky to earn $30/hr (we even hear of rates as low as $20/hr) and a higher rate for overtime is rare.

While cheaper billing rates appeal to clients, buyers (aka, “those who hire attorneys in transition”) should beware – you may get what you pay for! Rock bottom bill rates inevitably lead to very low hourly rates for the contractors, which could result in considerable snags during your document review. Consider the following consequences:

  1. A low pay rate can mean that you are hiring an agency’s least experienced contractors or the “last resort” candidates who will agree to work at a lower hourly rate.
  2. A low pay rate can lead to turnover on the project if something more lucrative comes up (and when pay rates are low, there is something more lucrative).
  3. Contractors are less loyal to agencies that underpay them and may be less productive in their work. The last thing you want on a document review project are apathetic and resentful attorneys who have once been paid higher rates to do the same work, especially when these are the people who could identify the “smoking gun.”
  4. Your law firm or organization could be poorly represented as a “cheap” firm in the contractor community and beyond.

So, how do you avoid such consequences? First, ask the agency what their pay rate will be to the contractors for the hourly rate they quote you. If they are not willing to discuss this information with you, it’s a sure sign that the agency margin is too high and there is probably room for negotiation. (TIP:  knowing the bill rate and the pay rate is also the best way to assess competing bids for the document review.  It’s all about mark-up in this industry and if an agency is taking an 80 percent mark-up, you are NOT getting a deal). Second, find out what the agency does to retain contractors in such circumstances that do call for a low pay rate.  Do they offer bonuses? Serve lunch? Do they have a reputation for treating their contractors with respect and kindness? It matters (please see my September 1st post “Contractors speak up!”). If you are ultimately concerned about the bottom line bear in mind that clean up at the end of an unsuccessful project is much more expensive than a few extra dollars an hour on the front end.

Irate about contract attorney rates: A rant

Jill Rorem, Esq., is senior manager, legal staffing at Blackman Kallick (www.blackmanstaffing.com). Jill oversees the successful recruitment of attorneys, paralegals and contract legal professionals. Jill (and the Blackman team) staffs document reviews using qualified contract attorneys and thus, works with attorneys-in-transition daily. You can follow her at twitter.com/roremlegalstaff.

Today’s post is a rant and I apologize. I try to be positive in these posts but today, I am angry!  I work in a popular “non-traditional” and “transitional” attorney industry: document review staffing. As a staffer and not a reviewer, I ride the rollercoaster of looking for reviews, staffing the review, looking for reviews, managing the teams, ending reviews and looking for more reviews.  It is a fiercely competitive industry. Frankly, I love it but, it’s exhausting and uncertain.

I, along with my team, constantly strive to stay above the bar not only when it comes to working with clients, but also with regard to working with our contractors. Our contractors are essentially our “product.” Without them, we have nothing to sell. It has been our policy to treat our contract attorneys like gold.  I’d say, based on our reputation and the reviews I’ve seen on other blogs about us, we’re succeeding. In addition to Blackman staffers being kind people who generally treat people nicely, we also know that happy and well treated contractors have loyalty to their agencies and therefore perform strongly on document review projects.

My colleagues and I have solid relationships with our attorneys and as a result, we’ve learned a lot about the goings on in our industry. It is possible that I will rant in future posts because I learn many things that disappoint me. It is very tough to be a contract attorney. Coding documents day in and day out is tedious and many contractors saw themselves in different positions when they went to law school. They are tremendously underpaid, often shoved into crowded offices with little personal space and threatened within an inch of their lives if they leave a project early -though if a case settles that they were counting on, they can be let go without warning.

So what is getting my goat today? What is making me so angry that I am discussing it publically?  This time it’s rate. I recently learned the bill rate and the pay rate of one project going on at a law firm and the agency is taking a whopping 110 percent mark-up. When I began in this industry, most agencies paid contract attorneys $35/hr + time-and-a-half for any overtime worked. The industry standard for the mark-up was 65-80 percent and it accounted for profit, taxes and insurance costs etc.  Now, overtime pay is rare and the market pay rate has dropped to a mere $27-$29/hr. We thought that the right thing to do was to drop our margin below the industry standard so that we could still pay a decent wage on our projects. Like I said, we’re firm believers that a well-paid contractor does the best work so if they had to take a hit, we did too. Rate is only one contributing factor to a successful project, but let’s face it, it’s at the top of the list.

Others didn’t take that attitude and stuck with a super high margin and simply significantly lowered the attorney pay. In fact, we’ve heard of document review projects paying as low as $20/hr (they had insane turnover). But in this instance, the agency is billing an hourly rate comparable to what we all used to get in the good ole days and did not pass the benefit through to the contractors. Rather, they took a 110 percent mark-up. It’s unfortunate for both the contractors and the client of whom they took advantage. As temporary document review teams become more prevalent in the legal industry, it is important that agencies adhere to best practices so that we can improve the quality of our industry.  That did not happen this week.