It is not uncommon for practitioners and law firms to employ the services of temporary (or contract) attorneys as the need may arise in contemporary practice. Employers often turn to temporary lawyers to address a variety of needs including workload variations, special projects, matters requiring a unique or particular skillset, and general assistance with such tasks as document review and the drafting of legal memoranda, among other things. As one federal court explained, “economics is the principal reason for emergence of lawyer temping because it permits a firm to service client needs during particularly busy periods by engaging an experienced attorney, without incurring the expense of hiring a permanent employee.” See Carlson v. Xerox, 596 F. Supp. 2d 400, 409 (D. Conn. 2009)(internal citations omitted). This article discusses the ethical obligations and associated risks that flow from engaging the services of a temporary attorney, including areas such as billing for services and adequate disclosure to clients.
Temporary Lawyers in Context
A generally accepted definition of the term “temporary lawyer” includes an attorney hired “to work on a single matter or a number of different matters, depending upon the firm’s staffing needs and whether the temporary attorney has special expertise not otherwise available to the firm.” See Newby v. Enron, 586 F.Supp. 2d 732, 783 n 64 (S.D. Tex. 2008)(Observing that the hiring of a contract or temporary attorney is a common practice in law firms today); see also TakedaChemical Industries v. Mylan Laboratories, 2007 U.S. Dist. LEXIS 19614 (S.D.N.Y. Mar. 21, 2007)(“In complex litigation, contract attorneys are routinely used by well-established law firms who supervise their work.”). Temporary attorneys are typically employed for a “limited period or purpose” and do not include someone who “is a part time employee of a firm or one who is employed full time but without contemplation of permanent employment, who works only for the employing firm.” See Colo. Formal Ethics Op. 105 (May 22, 1999).
Billing Considerations for Temporary Lawyers’ Services
In order to bill a client for the services of a temporary lawyer, a law firm may either bill for the work as “legal services” akin to that of a partner or associate or an expense or disbursement. With respect to the former option, the firm is permitted to realize a profit for the temporary lawyer’s work, insofar as it can add “a surcharge to the costs” provided the “total charge represents a reasonable fee for services provided to the client.” See ABA Comm. on Ethics and Prof’l Resp., Formal Op. 00-420 (Nov. 29, 2000). As to the latter, when such services are billed as an expense or
disbursement, the “client may be charged only the cost directly associated with the services, including expenses incurred by the billing lawyer to obtain and provide the benefit of the contract lawyer’s services.” In order to add a surcharge to the costs under this option, the client must give her consent.
Whether a firm must reveal to the client that she is being charged for the services of a temporary lawyer will necessarily depend on the specific circumstances and rules of a given jurisdiction. See, e.g., In re Worldwide Direct, 316 B.R. 637,650 (Bankr. D. Del. 2004)(temporary attorneys who are under the close supervision of a law firm are not outside attorneys who must be disclosed to the client). In re Worldwide Direct, a law firm hired temporary lawyers through a staffing agency, and the bankruptcy court held that those employees were “regular associates” for purposes of 11U.S.C. Section 504(b) because the law firm provided direct supervision over the attorneys. The court found that the law firm “directly hired associates … on a temporary or contract basis, and there would be no question that it could bill the estate for their time.” Accordingly, the court determined that the law firm was permitted to bill for the temporary lawyers’ work at rates similar to other firm attorneys and “share” in compensation that was earned without expressly informing the client of the temporary lawyers’ status.
Disclosure Requirements Associated With Temporary Lawyering
A firm’s disclosure obligations to a client primarily turns on whether the temporary lawyer will be “working under the direct supervision of a lawyer associated with the firm.” ABA Comm. on Ethics and Prof’l Resp., Formal Op. 356 (1988).See also People v. Abrams, 459 P.3d 1228 (Colo. 2020)(Reasonable consultation called for by Colo. R. Prof. Conduct1.4 did not require an attorney to discuss an employee’s licensure with the clients because, although the employee performed most of the work on the case, the attorney supervised the employee, thereby ensuring that the output was compliant with Colorado law.). In Formal Op. 356, the ABA concluded that a client must provide informed consent if a temporary lawyer is to perform work on the client’s matter without the close supervision of a firm attorney. See N.J. Advisory Comm. on Prof’l Ethics, Op. 632 (Oct. 12, 1989)(where a temporary lawyer will be closely supervised by a firm attorney, “the firm would not have to disclose to the client that the temporary lawyer is working on the client’s matter.”).
In 2008, the American Bar Association issued Formal Opinion 08-451 which addressed disclosure obligations to clients when outsourcing legal services to temporary lawyers “outside of the lawyer’s firm.” See ABA Comm. on Ethics & Prof’l Resp., Formal Op. 08-451 (2008). As a general rule, a client must first give consent when a temporary lawyer outside of the firm will perform work on a matter and be made privy to confidential information otherwise protected by RPC 1.6.However, where the temporary lawyer is subject to close and direct supervision by a firm attorney, then such disclosure is not generally required.
The Bottom Line
Temporary lawyers perform services that fill a legitimate need for practitioners and law firms alike. This practice, however, brings with it additional ethical obligations and challenges that must be navigated, including billing considerations and disclosure requirements. Take the time now to revisit the rules governing the engagement of temporary lawyers and ensure that existing and future arrangements comply with professional responsibility standards.
Reprinted with permission from the July 8, 2024 edition of The Legal Intelligencer © 2024 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.