Are Contract Attorneys Entitled to Overtime?

By Michael Russell

Two very recent cases shine some – but not complete – light on this question. With the evolution of the practice of law, contract attorneys are becoming more and more prevalent in our profession. 

Given the difficult job market, new law graduates are frequently left to pursue contract attorney positions in order to repay significant student loans. 

In addition, the proliferation of document intensive discovery, including electronically stored information, has led to the need for significant man hours spent on document review projects. These are frequently farmed out to contract attorneys.

This has led to many questions and significant litigation regarding whether contract attorneys fall within the “professional exemption” of the Fair Labor Standards Act. Two recent cases, Lola v. Skadden, Arps, 2015 U.S. App. LEXIS 12755 (2d Cir. July 23, 2015) and Henig v. Quin Emanuel, 2015 U.S. Dist. LEXIS 172823 (S.D.N.Y. December 30, 2015) are illustrative.

In Lola, the Second Circuit reviewed the trial court’s grant of a motion to dismiss. The Second Circuit relied heavily on how the state of North Carolina, which was the applicable law, defined the “practice of law.” After reviewing North Carolina law and the amount of restrictions that were alleged to be placed on the contract attorney, the Second Circuit reversed the trial court. In doing so it held:

The gravamen of Lola’s complaint is that he performed document review under such tight constraints that he exercised no legal judgment whatsoever – he alleges that he used criteria developed by others to simply sort documents into different categories. Accepting those allegations as true, as we must on a motion to dismiss, we find that Lola adequately alleged in his complaint that he failed to exercise any legal judgment in performing his duties for Defendants.

A fair reading of the complaint in the light most favorable to Lola is that he provided services that a machine could have provided. The parties themselves agreed at oral argument that an individual who, in the course of reviewing discovery documents, undertakes tasks that could otherwise be performed entirely by a machine cannot be said to engage in the practice of law. We therefore vacate the judgment of the district court and remand from further proceedings consistent with this opinion.

Lola was decided on May 29, 2015. Approximately seven months later, the Southern District of New York addressed a similar case in Henig v. Quinn Emanuel. The Plaintiff in Henig was hired to review nearly 13,000 documents while working 57-60 workweeks. He was compensated a flat $35 per hour for all of this time. In Henig, the trial judge granted summary judgment in favor of the law firm. It distinguished Lola largely by noting that New York and North Carolina have different definitions for “practice of law.” Judge Abrams of the Southern District of New York also found that the Henig Plaintiff seemed to exercise more discretion than the Lola Plaintiff alleged.

It seems that the ultimate answer may come down to whether contract attorneys are more analogous to lawyers or paralegals?

These cases do not answer the question definitively. They do give some guidance. It appears that these cases will turn on two issues: (1) how the applicable jurisdiction defines the “practice of law” and (2) the amount of discretion – or lack thereof – the contract attorneys receive on any given project.

This might be especially problematic for the employers of contract attorneys, as the same contract attorney might exercise more discretion on one document review project than on another. With that, we will conclude with the following rosy thoughts from Judge Abrams in the Henig case: “The history of the law, Oliver Wendell Holmes observed, ‘is the history of the moral development of the race.’ But practicing lawyers – especially junior attorneys at large firms – know that their jobs too often have less to do with the development of the human race or the law than the tasks that are necessarily repetitive in nature, modest in intellectual scope, and banal in character.”

To learn more about the Gilbert Firm’s services, please contact Tennessee wage and hour attorney Michael Russell, or contact the firm to reserve your consultation. We maintain offices in Nashville, Chattanooga, Memphis and Jackson.

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