Rise of the contract fillers

Melanie Healy reports on the reasons behind the growth in popularity of using contract lawyers

Contract lawyers are not the rarefied breed they used to be – only seen in the over-busy and underpaid offices of a county solicitor’s office, helping out on criminal, family and conveyancing matters. In-house and private practice lawyers are seeing employing a high-calibre lawyer on a contract as an increasingly acceptable option.

The growing trend towards temporary contracts in London in the past four years began in the US, where a more flexible workforce has always been the norm in areas such as IT. Not recruiting so many permanent employees began to make sense to many after the boom and bust of the 1980s, and in the 1990s law firms and legal departments followed suit.

In some ways, it is necessary to differentiate between in-house organisations and private practice. In-house, particularly in the City at the bigger banks, have been employing professional staff on a contract basis for many years. This has given them and the lawyer the chance to ‘test the goods’ before a permanent offer is made. The success of hiring in this way has filtered through to other large organisations such as hedge funds and joint ventures. With the right lawyer, vast savings can be made on total legal spend. Secondees from law firms have also shown legal departments that a valuable contribution can be made by the visiting lawyer.

When launching a joint venture, finance director Michael Watson took on a contract lawyer who worked in-house to set up commercial contracts, interfacing on a daily basis with the business, its customers and its suppliers. The company had the advantage of controlling and directing its own legal resource, which improved turnaround time for drafting the legal agreements, and it instructed its outside lawyers far less, saving a considerable amount of money. Once the company was set up and trading, it employed the lawyer on a part-time basis to handle the ongoing flow of legal work.

For firms and in-house departments, contract lawyers can help on a particular project and perhaps provide a particular skill set, and once the job is done there is no addition to the headcount. Contract lawyers have also been brought in by firms to lead teams and train them in new areas of expertise. Firms also find them useful to assist busy teams for a finite period, undertaking due diligence exercises and taking witness statements, for example.

The trend towards using a temporary contract to test out potential employers/employees is here to stay for small and medium-sized firms. “It’s so much easier than having to tell someone they haven’t passed their probation period,” say many partners. The calibre of the work and team assimilation can be gauged more accurately when the decision to be taken is not one about a permanent employee. However, there is too much attrition for large firms to recruit in this way – the HR department would be up in arms.

One disadvantage of contract lawyers from the employer’s perspective is that the lawyer may not be available when the organisation next wants to employ them. Another is that, particularly if a more senior lawyer is used to fill the gap, the client may want to use them in the future rather than the more junior lawyer more usually allocated to them.

From the other side, lawyers are being drawn to contract work. Temporary contracts can be useful to test a future employer, to see if the lawyer wants to switch from private practice to in-house, from one practice area to another or from a US firm to one in the UK, as well as to fill in a gap between permanent positions. For many, the phrase ‘work-life balance’ is directly applicable and, for those with other career aspirations, contract work allows them to follow their dreams.

Melanie Healy is a business development consultant with Strategic Legal Solutions