A lawsuit against legal heavyweight Skadden, Arps, Slate,
Meagher & Flom LLP is testing whether some purportedly
professional work might in fact be eligible for overtime.
The case pits Skadden against a contract attorney hired by a
legal staffing agency to review documents for $25 an hour on a
Skadden case.
Under federal labor laws, licensed lawyers can't earn overtime
pay for work in excess of 40 hours a week if what they are doing is
considered legal work. But the plaintiff, David Lola, says he
deserves overtime pay because the tasks he did were so basic they
shouldn't qualify as practicing law.
The case could have a far-reaching impact, legal observers say.
Contract attorneys are hired on a short-term basis across the legal
profession to review reams of documents during the initial phases
of litigation and investigations, and many feel they are
underpaid.
Mr. Lola's lawyer, D. Maimon Kirschenbaum, has another attorney
overtime case pending as well, and contract attorneys are using Mr.
Lola's case as a rallying cry to raise awareness of what some see
as unfair working conditions for document reviewers.
Valeria Gheorghiu attended Friday's arguments along with other
members of United Contract Attorneys, a group that is working to
improve the pay and benefits of document reviewers. Ms. Gheorghiu
said Saturday that contract lawyers often work shoulder-to-shoulder
in crowded rooms, sometimes without access to phones or the
Internet out of privacy concerns by clients. Some work sites
prohibit talking, she said, while others post lists of rules
dictating what kind of food can be eaten in the review rooms and
when bathroom breaks can be taken.
"We should be treated as working professionals," said Ms.
Gheorghiu, a workers' rights lawyer by training who started doing
foreign-language document review in 2012 after injuries from a car
accident made it too difficult to keep up her practice. Ms.
Gheorghiu said the current system can be "demoralizing,"
particularly for law school graduates saddled with debt who can't
find a way out of the contract attorney cycle.
Such positions typically pay around $25 or $30 an hour and don't
provide benefits—far below the $160,000 starting salaries for many
full-time junior lawyer jobs.
Mr. Lola sued Skadden and legal staffing agency Tower Legal
Solutions in New York federal court in July 2013, alleging he
deserved overtime pay for the extra hours he worked on a
document-review assignment in North Carolina. Mr. Lola said his job
involved using predetermined search terms to sort documents into
categories with the assistance of prompts by a computer, and to
occasionally redact words.
"The legal services industry has for years been exploiting
individuals with law degrees looking for short-term work," the suit
said.
A Tower Legal representative declined to comment Friday. Skadden
representatives didn't respond to requests for comment.
A district court judge dismissed the case in September, ruling
that the work Mr. Lola did qualified as practicing law under North
Carolina guidelines. "As junior associates at law firms well know,"
U.S. District Judge Richard Sullivan in New York wrote in the
decision, tasks like confirming citations and looking for typos
"are the bread and butter of much legal practice."
Mr. Lola appealed, and on Friday, a three-judge panel in the
Second U.S. Circuit Court of Appeals heard arguments from both
sides. The appellate panel seemed sympathetic to Mr. Lola's case
Friday.
If Mr. Lola's work truly was as basic as he said it was, asked
Judge Raymond Lohier Jr., and could nearly be replaced by a
computer, "How in the world is that the practice of law?"
The work was more complicated than that, said Brian Gershengorn
of Ogletree, Deakins, Nash, Smoak & Stewart, P.C., who argued
for Skadden and Tower. "Lola can't take away the fact that he's
trained as a licensed attorney," Mr. Gershengorn said.
The judges also pressed Skadden's counsel on why there shouldn't
be a federal standard for what qualifies as the practice of law, as
Mr. Lola suggests.
Mr. Lola's counsel, Mr. Kirschenbaum, told the court that he
thinks the definition of law practice should include "some
engagement of legal judgment or application of legal knowledge,"
which he says his client didn't need for his $25-an-hour gig.
Speaking after the arguments, Mr. Kirschenbaum said a ruling in
favor of Mr. Lola would "open the gates for people to get their
wages."
Some legal observers say, however, that a win for Mr. Lola could
lead to a decrease in available positions if law firms and
corporations choose to bring the work in house or hire paralegals
or others without a law degree to do the work instead.
Mr. Lola's suit isn't the first time courts have been asked to
weigh in on overtime pay for lawyers.
A similar suit Mr. Kirschenbaum brought against Quinn Emanuel
Urquhart & Sullivan LLP and staffing company Providus has been
on hold until the Second Circuit rules in the Skadden case.
In California, a state appellate court ruled in 2011 that a law
school graduate who hadn't yet passed the bar examination to become
a licensed lawyer still wasn't eligible for overtime pay for work
he did as a law firm clerk.
Write to Sara Randazzo at sara.randazzo@wsj.com
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