Practitioner's Guide to Hiring Freelance Attorneys
The Benefits and Ethics of Hiring Freelance Attorneys
The way we deliver legal services to clients is changing. Busy solo practitioners or firms historically responded to an increase in work by hiring more associates to manage the flow. We know, though, how fleeting a flood of work can be and how risky hiring (and it’s attendant costs) can be. This is where a solid freelance attorney can help you to manage your workflow as needed, create a profit center for your firm, and even cut costs for your client. The following is intended to give an overview of the scenarios where a freelancer might be of service, as well as a review of the ethical considerations when engaging a freelancer.
What is a Freelance Attorney?
At the outset, it is helpful to understand when an attorney may refer to him or herself as a freelancer, and what kind of attorneys engage in freelance work. Freelance attorneys choose to spend their careers doing work for other attorneys, not end clients. These attorneys are a far cry from contracts attorneys who engage in low-level work, such as document review, at low wages. Freelance attorneys typically handle substantive work on a project basis for other attorneys – research and writing, drafting briefs, motions, and other pleadings, managing discovery, covering hearings or depositions, etc. The typical Custom Counsel freelance attorney has between 5 and 30 years of experience.
When Should You Consider Hiring a Freelancer?
There are a variety of scenarios where hiring a freelancer might make sense for your practice. Freelance attorneys can act like an extension of your firm, plugging in without training or handholding when a large matter presses your team to full capacity, to cover your practice and matters when you go on vacation, or to fill a gap when a member of your team is on leave. Hiring an experienced freelancer to help in these circumstances will help you maintain sanity, free you up to focus on other matters (including business development) and may even reduce the risk of malpractice that can exist with an overburdened practice.
How Do You Bill Clients for Freelance Attorney Services?
Outsourcing work to freelance attorneys has gained in popularity in recent years because it is such an advantageous model in a down economy for all parties involved. Because of its increasing popularity, the American Bar Association has issued several Formal Opinions on the ethical considerations when hiring a freelance attorney. One of the most commonly asked questions about hiring freelance lawyers is whether or not you can profit from their low billable rates. According to the ABA, the answer is yes. This is a significant benefit to hiring freelance lawyers, and allows you to create an additional profit center for your firm.
In Formal Opinion 00-420 (November 29, 2000), the ABA stated that a hiring attorney can add a “surcharge” to the amount it pays for freelance legal work. ”A ‘surcharge’ is made when the retaining lawyer charges the client more for the services of the contract lawyer than the cost incurred by the retaining lawyer for obtaining those services, either directly or through the contract lawyer’s agency or employer; in other words, a surcharge is profit.”
Formal Opinion 00-420 states that freelance work can be billed to the end client either as fees for legal services or as costs. If you opt to bill your client for the services as costs, however, no surcharge is permitted. The ABA also stated that “[t]here is no duty to disclose the surcharge when the work of the contract lawyer is supervised or, absent supervision, when the work of the contract lawyer is adopted as the work of the retaining lawyer.”
Many states have their own ethics opinions regarding marking up freelance attorneys, so be sure to check your local ethics opinions on this matter.
Do I Need Client Consent Before Using a Freelancer?
The ABA has also addressed whether client consent must be obtained when outsourcing legal work to a freelance lawyer. In Formal Opinion 88-356, the Committee stated that, where a temporary lawyer performs independent work for a client without close supervision by the hiring lawyer, the client must be advised that the temporary lawyer will work on the matter and must consent. Where, however, the temporary lawyer is under the direct supervision of the hiring lawyer, the temporary lawyer’s work does not ordinarily have to be disclosed to the client. Importantly, in Formal Opinion 08-451, the Committee stated: “[W]here the relationship between the firm and individuals performing the services is attenuated, as in a typical outsourcing relationship, no information protected by Rule 1.6 [governing confidential client information] may be revealed without the client’s informed consent.” This is because the implied authorization to share confidential client information within a firm does not extend to outside entitles or individuals.
The ABA Committee clarified that the hiring lawyer does not need to reveal the compensation arrangement with the freelance lawyer to the end client. This is because ABA Model Rule 1.5(e), dealing with fee splitting, does not apply to the outsourcing of legal services because the gross fee the end client pays the hiring lawyer is not shared by the freelance lawyer. According to the Committee: “The payments to the temporary lawyer are like compensation paid to nonlawyer employees for services and could also include a percentage of firm net profits without violation of the Rules . . . .” ABA Formal Opinion 88-356.
It is important to keep in mind this guidance by the ABA and check your state’s ethics opinions on this issue. Because Custom Counsel attorneys provide very high quality legal services at attractive rates, clients are usually quite enthusiastic about the proposition of using freelance attorneys to reduce their legal bills.
Do I Need to Supervise the Work of Freelance Attorneys?
According to the American Bar Association, when hiring a freelance attorney the hiring lawyer remains “ultimately responsible for rending competent legal services to the client.” ABA Formal Opinion 08-451.
As the ABA clearly stated: “The challenge for an outsourcing lawyer is, therefore, to ensure that tasks are delegated to individuals who are competent to perform them, and then to oversee the execution of the project adequately and appropriately.” Id. Under Model Rule 5.1, a supervising lawyer must make “reasonable efforts” to ensure the that work of an attorney under his supervision comports with the Rules. Rule 5.1 also makes clear that supervising lawyers can be held responsible for the unethical actions of the lawyers under him or her if the supervising lawyer ratifies the conduct. A recent lawsuit against McDermott Will & Emery involves a situation where contract lawyers were alleged to have been improperly supervised. This suit highlights the trouble with hiring low wage, inexperienced attorneys to perform huge document review projects.
Reading the Model Rule and the ABA Formal Opinion together, the message is clear: hire experienced, high level attorneys, and, if you choose to work with more inexperienced freelance lawyers, be sure to supervise their work carefully.