Wednesday, January 23, 2008

Its coming soon. A few minor issues and the FLSA.

First off, watch the unsolicited advertisements. I got a little concerned there when someone posted a job announcement with full contact information. I decided to leave it because if nothing else, I hope that someone finds a position in which they are Happy or Happier. I don't mind so much if other bloggers post links to their blogs, especially when they are related issues to my own, but watch the ads. See Rule 5.

Second, there have been many requests for me to publish a chart for contract jobs in Philadelphia. I may attempt to do this at some point in the near future. However, the limits of the blogspot being what they are, it will likely be published in JPEG format. For this chart I will have to also create a rating and annotation system. Further, not every contractor values the same thing in a job site. Some prefer the quiet of their own cube or office, while others (especially older contractors) seem to prefer a conference table type of job where they are free to talk. No rating system will satisfy everyone.

Third, the issue was raised briefly in the last string of what the markup for contractors was. This varies widely depending on the contract. Further, with some jobs there are 2 markups, with others there is only one. These markups are:

Contractor Pay---> Contract Firm charges for Contractors--->Law Firm charges for Contractors--->What the Law Firm Client actually pays for Contractors.

Contractor Pay---> Contract Firm charges for Contractors-->What the Law Firm Client actually pays for Contractors.

Notice in the second model the law firm (ie Dechert) is not paying for the contractors, rather their client is doing so directly. This model has become popular for companies on larger document reviews lately because it saves them money, and they have gotten smart about what they will and will not pay.

Someone did communicate to me what their markup actually was. The person found out through a slip up by an HR person at the contract firm. This was a couple of years ago, and this person was with a plaintiff's law firm known to negotiate really low rates, so the markup may not be representative of the industry. The employee was receiving $25/hour. The Contract firm was receiving $39/hour. The Law Firm was "billing" $225/hour against the settlement. The client did not end up paying $225 as the Law Firm might be faced with a client unwilling to pay that much, and would knock down the price when the client balked. Also, when there is a Class Settlement, the law firms use that figure to try to negotiate a larger share of the attorneys fees. Attorneys fees in class actions are often subject to the approval of the court, and so usually end up being more reasonable. However, courts used to frequently overlook the fact that contractors are being billed as associates even when doing Doc Review.

Fourth, some comments have been made about how much better being a 1099 employee is. It can be better and worse, it all depends on your business/tax savvy. Keep in mind that 1099 employees are essentially double taxed because they must pay self employment taxes. I believe that the person above told me that he would need to make more then $32/hour just to overcome the tax consequences of being a 1099 employee. Ironically the firm started its 1099 employees at $30/hour. Also, despite the meager benefits that a contract firm may provide, 1099 employees get nothing for benefits. If you are further interested in being a 1099, run the numbers against the income tax forms for 2008. There is also a hassle being 1099 in that you are required to pay taxes quarterly, and save up for them on your own. There are potential benefits, but like I said before, you need to be savvy about how you set yourself up. Okay, enough of that for now.

Finally, the double edged sword of the FLSA.

Most contract attorney jobs are considered exempt by the law firms and the contract firms under the professional employee exemption. This means that the protections of the FLSA does not extend to us contractors. The FLSA essentially says that any position which requires advanced education (like law school) as an essential part of the job duties and qualifications is exempt. The argument that is used to justify this position is that they require us to have a J.D. and sometimes to have to passed the Bar. They justify these requirements because we must code for Confidentiality, Relevancy (Legal) and Privilege. These terms have a legal meaning and non-legal meanings. Theoretically, we learned the legal meanings of these terms in law school, and the Bar was a test of our knowledge of these terms.

My argument is that the rules that are used for Confidentiality, Relevance and Privilege bear little resemblance to those that we learned in law school. They have already been hammered out through negotiation between the lead counsel on the case, and sometimes let through information that would normally be considered to fall under one of these titles. Further, I have heard many cases where the defendants took an overly broad view of Privilege and essentially required everything to be coded as privileged. This means that the actual knowledge that we gained in law school is not being used as a part of our duties. We are retaught what these words mean for each case we work. Also, coding is a repetitive task (necessarily so) that does not allow us to use any discretion under these rules. What this means is that we should not be exempted under the professional definition of the FLSA.

The double edged sword that some have pointed out to me in the past, is that if the education and license is not actually required to do the work, then college students could just as easily do the work. In fact anyone who is intelligent enough to follow the directions at the document review site and speaks English could do it. This opens the door to non-attorneys reviewing the documents and a drop in the salaries of document reviewers. It also opens the door to the off shoring of document reviews. If the license and education is required to do the work, then you lose the protections of the FLSA.

ALL of that being said, qualification under the FLSA has nothing to do with whether you can unionize, or for that matter with what the union can argue for on your behalf. That is for the next post.

The Black Sheep

Thursday, January 10, 2008

A couple of updates...have faith I am still looking at the Union and FLSA stuff it will post soon

Okay, everyone. As I said updates. Some friends have written to me to update my contractor pay information (updates in bold). Here it is...

Morgan Lewis: $28, time and a half for overtime. It may go as high as $32/hour, but as was pointed out to me there is the major drawback of periodic layoffs of a week or two at a time which may have you scrambling.

McCarter English: $30, after 6 mths $33, after 12 mths $35. Time and a Half for Overtime after 45 hours of straight time (which by the way would violate the FLSA).

Dechert (at least it was): $27, after 6 mths $30, after 12 mths $32, after 18 mths $35. Time and a half for overtime, and after 6 mths time and a half +$2 for Overtime. These were the Vioxx rates. Word is there is another drug case that they are reviewing that pays $30/hour ($25 if not licensed).

Stradley Ronon: $40, straight time for overtime. Only limited hours available.

Pepper Hamilton: $30. If you are not through an agency, then I believe they are paying $38 (independent/1099 employee). Non-agency employees might be making as much as $40.

Duane Morris: $32 or $30 depending on the agency. No overtime.

Schiffrin Barroway: $26/hour still.

DuPont: $28 with no time-and-a-half.

HireCounsel job at a plaintiffs' firm in Wilmington: $30/hour.

Here is the Website that Hoffa tried to provide in his comments:

Here are a couple of more websites that you might want to look at to whet your appetites for the unionization discussion:

Anyway, more on the union issue later.

The Black Sheep

Monday, January 7, 2008

Hey everyone! It's a New Year! and Contractor Pay

Hi faithful readers. I am back for the new year. I am sorry to have let things go for the past month, but without your contributions to the blog (which can be sent to my e-mail address if you wish to post them as opposed to just commenting), it is only me that is providing the posts. Talk to me about some of your experiences. E-mail me if you want to post something.

In any case, I have had some busy holiday weeks. I had a New Years Resolution to provide more frequent posts for this site, but I have already broken the resolution. I will probably do so again. For today's post, I would like to talk salary. Here is what I know about certain current jobs in Philadelphia (except where otherwise noted these are through agencies):

Morgan Lewis: $28, time and a half for overtime.
McCarter English: $30, after 6 mths $33, after 12 mths $35. Time and a half for Overtime.
Dechert (at least it was): $27, after 6 mths $30, after 12 mths $32, after 18 mths $35. Time and a half for overtime, and after 6 mths time and a half +$2 for Overtime.
Stradley Ronon: $40, straight time for overtime. Only limited hours available.
Pepper Hamilton: $30. If you are not through an agency, then I believe they are paying $38 (independent/1099 employee).
Duane Morris: $32 or $30 depending on the agency. No overtime.

If any of these is wrong, then please correct me. If there are any modifications that need to be made, then let me know.

Obviously the pay rates vary widely. From someone who is making their living through contracting this isn't promising. It is just the luck of the draw and one's availability that determines whether you are making $27 or $40. In addition, the circumstances and conditions on each of these jobs can vary widely. Incidentally, speaking about pay rates remember, that 1099 employees have to account for self employment and their own benefits. And also think about where you fit as employees.

I believe that Document Review Attorneys would be considered non-exempt employees for the purposes of the Fair Labor Standards Act because while in a normally exempt class (attorneys), the definition of exempt employees is not by title, rather conditions. I have never seen a document review that actually uses enough specialized knowledge to make the employees exempt. What does this mean for you? Several things, but one is that overtime should be paid at a rate of at least time and 1/2 and it should start when you achieve 40/hours per week. If you do not believe me, then check out these sites:

If there are contradictory legal opinions out there on the issue, please point them out to me. If you know this area of law well, then get in touch. If you are in a job where you are not being paid for overtime, or not being paid the correct amount, then you should consider unionizing.

Unions can protect pay rates, vacation pay, working conditions, and many other things. Many have given unionization a little thought in the legal field, but not a lot of thought. With Document Review work it is something that should be tried, as it is ripe for unionization. By the way, as a did you know thing? Did you know that lawyers for the Federal government are unionized under the treasury employees union. Yes lawyers can unionize, and contractors should.

My topic next post will be unions. If anyone wants to contribute, keep checking back. I will also deal with the FLSA and other labor acts more in future posts. I also hope to deal with OSHA, and possibly other Fire Regs. Please keep reading, and get the word out to other contractors. We will need group action in the future to improve conditions, and that is up to all of you.