Should Your Firm Join the Gig Economy?

A career in the legal sector has traditionally offered only two distinct paths: private practice or in-house counsel. In recent years, however, lawyers have forged a new path: freelancing.

These ‘lawyers for hire’ are a cost-effective solution for both law firms and their clients who need talent to take on temporary tasks, and there’s an increasing number of online legal talent platforms and marketplaces that allow experienced lawyers – who aren’t committed to a permanent job – to tout their wares.

We look at the rise of the gig economy and what it means for law firms.

The ‘gig economy’ explained

The term ‘gig economy’ was first coined in early 2009 and referred to the unemployed victims of the financial crisis making a living from working multiple part-time jobs out of necessity.

Today, it describes a situation where temporary positions or contingent work – driven by the proliferation of digital platforms linking workers and employers – are common, with companies calling on independent workers for short-term contracts.

In the legal industry, several factors are giving rise to freelance or contract lawyering, including pressure on firms to do away with the billable hour and ‘unbundle’ their services, as well as an increasing demand for more career flexibility and work-life balance from employees.

Advantages for firms

Jarred Hardman, managing director of online legal marketplace Crowd & Co, says there are two clear benefits for firms that use freelance lawyers:

  • They can access a pool of talent to better manage peaks and troughs of legal work.
  • They can better manage their resources by using a fixed and variable cost structure in an era where competition is hot and downward pressure is coming from their clients (which should result in lower fixed overheads).

Freelance family lawyer Bonnie Esposito, who started legal life as a commercial litigator at Herbert Smith Freehills, sees other benefits for firms.

“I love working now,” she says. “I feel like I’m in control of what I do and don’t take on and, to a degree, can set terms that fit in much better with my life. With freelance lawyers, firms benefit from having fresh ideas and ways of doing things, and don’t have the overheads of full-time employees. My goal has switched from moving up the ranks in a firm to being the most effective lawyer I can be.”

Taking on a consulting lawyer can also be a good way for firms to test whether they want to expand, fill gaps during staff absences or extend their range of services.

Concerns for firms

While having temporary talent benefits firms from both a cost and knowledge perspective, there are a few key areas they must address when working with freelance lawyers, including:

  • Data security: Decide what technology your freelance lawyers will use, and consider what measures will be taken so you can you ensure data security for the firm and your clients. This is especially necessary if your firm allows the use of personal devices at work.
  • Conflicts of interest: If your temporary lawyers are required to work on different clients at once, you need to identify potential conflicts of interest and monitor them regularly.
  • Working status: To meet tax and employee obligations, you also need to accurately differentiate between employee and contractor in your firm. The ATO provides a guide on how to work it out.

Hardman says firms should also be mindful of the type of work freelancers want to do, and be open to flexible work structures. When negotiating rates, firms must understand that freelancing fees can’t be compared to the salary of a full-time lawyer.

According to recruitment firm Baker Anderson, hourly or day rates for contractors will be higher than permanent salaries as they do not include annual, sick leave or other bonuses. However, while freelancers often receive a higher daily rate, the overall project resourcing cost to use freelancers is often much lower compared to using full-time staff.

Successful freelance lawyer initiatives in firms today

To meet the increasing demand in ‘gigging’, there is now a host of initiatives undertaken by firms to simplify and facilitate the matchmaking process and this style of working. A few notable examples include:

  • Pinsent Masons’ Vario is a self-described “hub of freelance legal professionals” and offers clients flexible and cost-efficient access to vetted lawyers.
  • Corrs Chambers Westgarth’s Orbit was created to provide experienced, high-calibre lawyers with flexible work arrangements aligned to organisational needs and the dynamic needs of clients.
  • MinterEllison’s Flex pools together a group of contract lawyers who are temporarily placed within a client’s business when needed.
  • Part of the McInnes Wilson Group, Lexvoco is a NewLaw firm that provides temporary legal talent to organisations that are under-resourced, have a skill gap to fill or can’t justify employing their own in-house counsel.

More than a passing fad

In an interview with Asia Law Portal, Anthony Wright, principal at Lexvoco, said traditional law firms should not be discounted in the face of innovative initiatives (characteristic of NewLaw firms like Lexvoco).

“There’s room for both models to coexist, and ways they can work really cohesively together,” he said. “The fundamentals are still the same – companies will always require top-quality people who know the law and we’d never deliver them anything less – however everything else is up for consideration.

“Our point of difference comes from using technology, systems and work models and concepts to practise the law differently. In doing so, clients still get the same quality advice, but in a quicker and more agile, cost-effective way.”

Freelance lawyering might still be nascent in the Australian legal industry, but one thing is for sure: it’s a model that makes legal service delivery more agile for practitioners and firms alike, with a key focus on client needs.

Despite some concerns, freelance lawyering and the gig economy seem to be a mutually beneficial model for firms and lawyers, indicating they might just be more than a passing fad.

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