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Is Law Becoming a Part of the Gig Economy?

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By Joseph Fawbush, Esq. on May 05, 2020 2:21 PM

As law firms continue to announce pay cuts, furloughs and layoffs, demand continues to rise for certain legal services – but only for some. So, what are law firms and corporate counsel doing to meet increased demand for niche areas while keeping an eye on costs? Like other businesses, they are turning to contractors.

Corporate Counsel Looking for Flexibility

The increased contracting of legal work is particularly pronounced in corporate law departments. While larger law firms can be a bit more flexible in meeting demand surges, corporate counsel has fewer resources. In order to address the increased legal issues arising from the pandemic, in-house counsel are turning to contractors. As just one example, in-house legal departments at financial firms are using contractors to process SBA loans and mortgage refinances.

Lowered Demand Now, Increased Demand Later

The ABA Journal recently reported that there's been a 40% drop overall in new legal matters opened each week. This is not, however, because a depressed economy is leading to fewer matters to litigate. Or, at least, not entirely. Rather, people are putting off their legal issues until stay-at-home orders are lifted and the COVID-19 pandemic has abated. It is not surprising, then, that law firms are taking action to reduce expenditures and looking to have flexibility for the coming months. It is possible that law firms may look to contractors to meet the demand later in the year when litigation picks back up.

Beyond Document Review

Certain routine tasks have long been completed by contractors, document review being the most notorious. However, we are beginning to see more high-end legal work being outsourced as well. Contract drafting and review, M&A work, and even litigation can be outsourced to a contracting agency.

A New Normal?

Like many of the economic impacts of COVID-19, the pandemic did not create the move toward legal contractors, but it is accelerating the trend. With layoffs happening almost daily, including among leading global firms, we are seeing an influx of unemployed talent looking for work. This influx coincides with a shift to remote working, which makes it easier for attorneys looking for temporary work to broaden their geographical reach.

COVID-19 is expected to have a lasting impact on the legal profession. It is possible one of the most pronounced changes will be a steady outsourcing of legal work to contractors.

Related Resources

Will the COVID-19 Outbreak Have a Lasting Impact on Legal Education? (FindLaw's Greedy Associates)

Practicing Law Without a License: The Coming New Normal for Recent Grads? (FindLaw's Greedy Associates)

Will Law Firms Still Be Recognizable in 2030? (FindLaw's Greedy Associates)

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