News and InformationKellogg School of Management
What's NewGeneral InformationDirectionsContactKellogg Home
Top Headlines
Kellogg in the Media
Alums in the Media
Media Relations
Kellogg World
Alumni Magazine
Speaker Videos
Subscribe to Kellogg News   
 
 
Index
Search
Internal Site
Northwestern University
Kellogg Search
Economic forces changing look of law biz

By: Bill Myers

April 7, 2005, Chicago Daily Law Bulletin

The good thing about his career as a temporary lawyer, says Matthew Minor, is that there is rarely a routine: one month might find him sorting through discovery on a trademark-infringement case, the next month might find him researching case law on a toxic tort case.

The bad thing about his career as a temporary lawyer, he says, is that there is rarely a routine.

"I'm always worried, certainly. It's just a sense that this isn't a permanent job," said Minor, 34, a former prosecutor who has been temping for almost two years.

In his various assignments at different law firms, Minor said, he has always been treated well. But he said he can't help but feel a little like a ghost at the table: always there, but rarely recognized.

Minor is not the only lawyer in Chicago's temp limbo. According to business consultant Thomas G. Kosnik, about one out of every 20 lawyers in Chicago is either registered with a temporary services firm or is an independent contractor.

And, Kosnik said, that is only the beginning.

"Look at the economics of it. It's a no-brainer," he said.

By 2015, three out of every 20 lawyers in Chicago -- 15 percent of the legal labor market -- will be temps or contractors, Kosnik said.

The use of outside contractors to do a company's work -- often termed "outsourcing" -- has already become standard practice in the rest of corporate America.

According to the New York-based Outsourcing Institute, American companies spent $ 100 billion on outside labor contracts in 1996. By 2001 that figure had swollen to more than $ 350 billion and continues to grow.

More than 90 percent of America's companies regularly farm work out to contractors, the Institute reports.

Experts believe that the legal practice is about to catch up.

"Law firms are growing and they're becoming much more sophisticated about how to deliver legal services. Very often, clients are ... making law firms think of ways of giving quality legal services that are competitively priced," said Joel F. Henning, the senior vice president and general counsel in the Chicago office of Hildebrandt International, a consulting firm for the legal industry.

That can only lead in one direction, Henning and others say: a more intense focus on cutting labor costs.

Using temps or contract workers can save a law firm up to 30 percent on labor costs, Henning and others say.

In strict economic terms, temps have only an upside, said Brian Uzzi, a Northwestern University sociologist who studies the legal profession.

"Temps are very good for any kind of work that is boilerplate. They're basically interchangeable in quality or features, no matter what the work," he said.

"You shed lawyers or you hire them depending on how much capacity needs to be used. In a sense, you're never carrying assets that aren't being productive," Uzzi added.

In the last decade, large temp firms like Kelly Services have expanded their legal services divisions while dozens of boutiques, specializing in legal temps, have sprung up. There are up to 30 Chicago-area companies offering temporary legal services.

Paralegals are doing most of the temporary legal work, but the number of temp lawyers is on the rise, experts say.

James F. Kosciolek is the owner of Chicago-based Legalpeople LLC, which he founded three years ago. He says that his company is one of the largest temporary legal services firms in Chicago, with about 500 attorneys registered for assignments -- including Minor, the former prosecutor.

Currently, most of those temp attorneys are sent to in-house counsel departments of corporations, Kosciolek said, but law firms are becoming a major part of his business.

He attributes this to the fact that legal projects, like the discovery process in litigation, are "gigantic."

"The way that a lot of firms do it is inefficient," he said.

Most corporations and law firms use temps only to fill in for someone who has left, but Kosciolek said that law firms are beginning to realize they can use temps to help with really big cases without having to commit to a huge staff forever.

There is no fixed profile of a legal temp, Kosciolek says.

Many temporary lawyers are recent graduates, looking to earn a few dollars in their profession while they look for a permanent job. Others are older attorneys who have lost, or left, their jobs. Still others simply enjoy the independence of choosing assignments and never having to lash themselves to a career, Kosciolek says.

Minor, the former prosecutor, became a temp when his wife, Christal, was being recruited for a job in the Boston area, and he was preparing for the move.

But shortly after Matthew Minor resigned from the Cook County state's attorney's office, Christal Minor got a better contract in the Chicago area. He registered as a temp so that he could still practice law while he looked for a full-time job.

Depending on his assignment, Minor makes between $ 35 and $ 50 an hour -- which he said is "significantly more" than he made as a prosecutor. But he does not get benefits.

And Minor said that, however lavishly law firms have praised his efforts -- he has steadily moved up the pay scale and he has been given increasingly important assignments -- no one has given him the affirmation he's really looking for.

"I haven't had a project that has turned into an interview," he said.

Despite his career anxieties, Minor said he is "more upbeat" than some of his fellow temps.

"I consider myself as doing good work at a high level. If an assignment taken as a temp turns into something permanent, fantastic. But if it doesn't, I'm doing good work," he said.

"This is the best compared to the alternative -- which is not working," he added.

Erik F. Dyhrkopp, a member of Bell, Boyd & Lloyd LLC, has become a true believer in temps.

Dyhrkopp recently hired a temp to work on litigation involving false advertising, patent infringement and tortious interference. It was his first experience with a legal temp, but Dyhrkopp said he would recommend it to anyone.

"He was a full-fledged member of the team," Dyhrkopp said of the temp.

Bell, Boyd & Lloyd paid $ 70 an hour for the temp's services, which was considerably less than it would have billed to its client had an associate or firm member done the same work, Dyhrkopp said.

Not everyone is so upbeat about the temping of the legal profession.

Robert P. Cummins, of Cummins & Cronin LLC, is the former chair of the Judicial Inquiry Board and current member of the Review Board for the Attorney Registration and Disciplinary Commission. He calls the use of temps the "day-labor model" and says that it expands the potential for abuse.

"If you hire a temporary lawyer and pay him 50 bucks an hour and charge the client 350 bucks an hour -- that, in my mind, raises a serious issue," he said.

Furthermore, since temps are by definition unconnected to a law firm, firms have to police temps' work carefully to make sure that rules governing conflicts of interest and attorney-client privilege are followed, Cummins said.

This means that law firms have an obligation to tell their clients who is doing what work -- and for how much.

"Before you recruit outside contractors to do the heavy lifting for your law firm, you damn well better make sure that your client is aware of it," he said.

But skeptics like Cummins may not have much say in the matter.

Kosnik, the business consultant, says he expects the temporary legal services industry -- which hardly existed a decade ago -- to grow by 10 percent per year through 2008.

Already, the temporary legal services industry has doubled its revenues in six years, according to figures kept by Staffing Industry Analysts, a private think tank of the temporary services industry.

Staffing Industry Analysts estimates that the temp legal services industry reached $ 1.1 billion in revenues last year.

That's less than 2 percent of the $ 103 billion temporary services industry, but the temporary legal services sector has shown more consistent growth than most other sectors of the temp industry, says Kosnik, the business consultant.

"There's no short supply of it, I'll tell you that. The economic benefits are only going to increase. And that's why it's not going to go away," Kosnik said.

Minor, the former prosecutor, said it makes perfect sense for a law firm to use temps and he wouldn't be surprised if some lawyers spent their entire careers as temps.

He just hopes he's not one of them.

"Getting a regular payroll is very helpful but I think most people in my position are looking to transition to full time," Minor said. "I've got tremendous experience but the market right now is looking to keep things inexpensive." -- Jaime Levy Pessin, a staff writer for Chicago Lawyer magazine, contributed.

©2001 Kellogg School of Management, Northwestern University