Brain Surgeon Rates for First Aid: How Law Firms Charge for Document Review

Lola v. Skadden, Arps arose from a lawsuit in which a plaintiff demanded massive disclosures of documents of a specified description. This meant that the defendant had to review thousands of documents to respond.

David Lola was a licensed lawyer hired on contract by the law firm Skadden Arps to perform those document reviews.

Later, Mr. Lola sued Skadden Arps for overtime pay. Skadden Arps contended that the relevant statute — the Fair Labor Standards Act — precluded overtime pay because the work consisted of “the practice of law”.

The prestigious Federal Court of Appeals for the Second Circuit refused to throw out the suit:

“The gravamen of [the attorney’s] complaint is that he performed document review under such tight constraints that he exercised no legal judgment whatsoever — he alleges that he used criteria developed by others to simply sort documents into different categories ….

“A fair reading of the complaint in the light most favorable to [the attorney] is that he provided services that a machine could have provided ….”

In my most recent post I described five skill sets needed to secure a client company’s legal health.

Consider the second one:

“Skill set #2. Design and management of work flows: The use of process design and project management to insert lawyers’ skills where they’re needed — and to avoid involving lawyers where they’re not needed.”

Someone has to decide who does what.

But law firms — too often abetted by their counterparts in-house — default to assigning lawyers to tasks that others could perform just as well or better.

And a lot more cheaply.

In concluding that a machine could have done the work described, the court in Lola v. Skadden, Arps described what the attorney had been assigned to do:

“[Attorney] alleges that his work was closely supervised by [Skadden Arps attorneys], and his ‘entire responsibility . . . consisted of (a) looking at documents to see what search terms, if any, appeared in the documents, (b) marking those documents into the categories predetermined by [Skadden Arps attorneys], and (c) at times drawing black boxes to redact portions of certain documents based on specific protocols that [Skadden Arps attorneys] provided’.”

Inexperienced law firm associates shoulder similar low-skill duties.

Consider these colorful observations from the trial judge in Henig v. Quinn Emanuel, another case where an attorney claimed overtime:

” The history of law, Oliver Wendell Holmes observed, ‘is the history of the moral development of the human race.’ But many practicing lawyers — especially junior attorneys at large law firms — know that their jobs too often have less to do with the development of the human race or the law than with tasks that are necessarily repetitive in nature, modest in intellectual scope, and banal in character. Particularly in a litigation in which a good deal of money is at stake, attorneys generally must review thousands if not millions of documents and analyze them for relevance and privilege using their legal judgment. Many of those documents must then be reviewed and analyzed again (and often again) by others higher on the case team’s chain of command ….”

In Henig v. Quinn Emanuel the judge sided with the law firm in ruling that such “repetitive”, “modest in intellectual scope”, and “banal” work constituted “the practice of law”.

But the judge gave the (legal industry’s) game away by acknowledging that whatever “legal judgment” is involved in junior lawyers’ document review has to be subject to multiple layers of review by other attorneys:

” … Reviewed and analyzed again (and often again) by others in the case team’s chain of command”. 

If law firms want to contend that their junior lawyers exercise “legal judgment” — they have to admit that they don’t really depend at all on that judgment. The work of those junior lawyers is duplicated — and charged for — by one or more layers of more senior lawyers:

” … Many of those documents must be reviewed and analyzed again (and often again) by others higher in the case team’s chain of command.”

General management needs to exact true accountability from its lawyers in the delivery of legal services to client companies. That includes effective design and management of work flows.

It’s unlikely to come from the legal industry acting on its own initiative.

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