We're All Contract Lawyers in India (Or Will Be Soon).

Hi folks, time for a little actual news about our biz -- intrepid reporter Julie Kay takes a look at the growing trend of hiring lawyers on an hourly or contract basis:

As law firms downsize, laid-off attorneys and new law school graduates unable to find jobs have been turning to an option they may never have imagined at law school: becoming contract attorneys — hired guns for $35 an hour.

Yet in the past couple of months, even that field appears to be showing signs of a slowdown.

Blogs devoted to the topic of contract attorneys are rife with complaints about the lack of work, particularly in New York and Washington; sudden ending of jobs that were supposed to be long term; and the demise of such formerly standard perks as free lunches and car fare.

"The combination of the economic climate as well as the year-end and the change in administration has had an impact on our business," said Andy Jewel of Hudson Legal, which has offices in 11 cities. "With the change in administration, any government investigation or other regulatory work is generally put on hold until the new people are in place. Work has been slow."

Also cutting into their business is the growing popularity of outsourcing to India. Hudson Legal has countered with an ad campaign that encourages law firms to "onshore," and choose U.S. staffing companies where there are no security or privacy concerns and where they operate in the Eastern time zone.

So it's not only the big document reviews where contract lawyers are getting hired -- it's in situations where firms can't afford to hire an attorney as an associate, and pay the related health care and overhead costs.

I found this part of the article interesting:

Howrey is one law firm that uses a large number of contract attorneys — and acknowledges pushing staffing agencies for better rates as of late. The Washington-based firm has a minimum of 75 contract attorneys on the job on any given day and has had as many as 350 with large merger matters.

"We use them in the discovery process," said Ralph Allen, chief operating officer of Howrey. "We don't normally put a $300-an-hour or $400-an-hour associate on first-level document review. We have a process where staff attorneys and associates are monitoring and driving this process, supervising these folks. It lowers the costs for our clients tremendously."

I'd be curious to know if firms employing such lawyers are marking up the rate, or simply passing through the costs directly to the client. We all know big firms frequently mark up research and copying costs, so why not contract lawyers?

This has been SFL, reporting in from Hyderabad.