Overtime for contract lawyers? Maybe so.

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Aug 3, 2015

Late July is the perfect time for a Big Law managing partner to go on vacation. The compensation battles are still months away. The end-of-year A/R collections push doesn't start until the 4th quarter. And, the associates are on vacation or busy entertaining summer associates. Nothing happens in late July, right? Wrong. Check your inbox, managing partners. The Second Circuit just delivered you a summer surprise that could dramatically impact your document review projects.

In Lola v. Skadden Arps, a contract lawyer assigned to perform document review sued Skadden and a legal staffing company claiming violations of the Fair Labor Standards Act, specifically the overtime provisions. The district court granted the defendants' motion to dismiss, holding that the plaintiff was exempt from the FLSA's overtime provisions under the "professional capacity" exemption.

In a move that is sure to rattle the windows in a few corner offices, the Second Circuit reversed, holding that contract lawyers who perform document review aren't necessarily exempt from the FLSA. If contract lawyers perform essentially clerical functions, sorting documents according to criteria established by someone else and exercising no legal judgment, then they may not be "practicing law" under controlling state law and may have to be paid overtime.

The case was remanded for further factual development, so this one is a long way from over, but it could have far-reaching impact on the practice of Big Law.


Craig E. Bertschi, Partner — McRae Bertschi LLC