By Aebra Coe

Law360 (April 26, 2021, 2:11 PM EDT ) Recruiters who place contract attorneys say they're busier than they've ever been as law firms and corporate legal departments scramble for talent amid a surge in legal work.

According to Julia Shapiro, founder and CEO of legal staffing company Hire an Esquire, her company saw 40% growth in 2020 and is on track this year to double last year's revenue. The company makes use of technology to match attorneys with contract work.

The hiring boom has led to an increase in hourly rates for contract attorneys of around 25% on many projects, Shapiro said, with some attorneys who have deep expertise in niche areas pulling in as much as $250 an hour.

"The last year has been completely unprecedented," Shapiro said.

Meredith Bruno at Special Counsel, a legal staffing company that makes contract attorney placements, pointed to another metric of growth her company has seen: So far in 2021, it has experienced 50% growth in the number of contract attorney placements it has made when compared with the same period in 2020.

"It's enabled a lot of companies and firms to have flexibility in their workforce, to scale up and scale down, especially smaller and midsize firms can now take on work they might not have otherwise because they didn't want to hire more associates," Bruno said. "Corporations that haven't done this before are seeing the benefits in terms of workload and cost savings."

Andrew Teig, a managing director in Major Lindsey & Africa's New York interim legal talent team, says he has seen a "huge increase in demand" for contract attorneys over the last year both from law firms and in-house legal departments.

A few practice areas that have been especially busy when it comes to contract attorney hiring, according to the recruiters, include COVID-19 compliance, cybersecurity and data privacy, M&A, health care, life sciences and employment.

The recruiting professionals offered a uniform explanation for the boom: Law firms and corporate legal departments are busy.

The increase has led to a need for more associates to perform legal work, creating a lateral market where competition for associate talent is high, driving compensation up, and an environment where many associates are hanging on the edge of burnout as they grapple with hefty workloads.

Many employers have reached out to contract attorneys for what Teig characterizes as "overflow counsel" — attorneys who can take on 20 to 30 hours a week of legal work to ease the load for busy associates and in-house lawyers.

In addition to that "overflow attorney" that takes on general practice work, law firms and legal departments are also searching for project-based attorneys who have specific expertise that may not be present at the firm, or present on a large enough scale, and tapping into that expertise on a given case or matter.

The high level of demand for contract attorneys has caused the balance of power to shift a bit, Hire an Esquire's Shapiro said.

Whereas before there may have been 20 attorneys applying for a given contract job, now that there are so many more jobs available that number is smaller, which allows for more bargaining power.

She said many of those applying are people who could work at a BigLaw firm or large corporate legal department if they wanted, but have reexamined their priorities and desires and have decided they want more flexibility in their work schedules than those full-time jobs allow.

"We have more amazing, shiny pedigreed attorneys in our system now than ever," Shapiro said.

Major Lindsey's Teig related a story about an attorney in California who was "pretty high up" in a big technology company and working 100 hours a week, but wanted a chance to spend more time with teenage children before they went to college and so chose to make the jump to contract work.

"We have found a plethora and diverse slate of candidates who are qualified and exceedingly exceptional for these kinds of roles," Teig said.

"Back in the day," contract attorneys might have earned $25 to $50 an hour because the majority of the work they did was commoditized, said Teig's colleague at Major Lindsey, Matthew Weaver. Now, he said, some contract attorneys are earning $75 to $150 an hour and the hourly rates are "commensurate with permanent roles."

Those with a high level of specialized expertise can earn as much as $250 an hour doing contract work, according to Shapiro. Those high-paying contract jobs have become more common as employers grow increasingly comfortable reaching out to contract lawyers to do high-level work, she said.

"Elsewhere with more standard jobs, we've seen closer to a 25% increase in hourly rates due to [the increase in] demand," Shapiro said.

--Editing by Orlando Lorenzo and Kelly Duncan.

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