We last blogged about a contract attorney overtime suit and whether document review is the practice of law in 2013. Since then, another contract attorney, David Lola, filed suit against Skadden Arps and Tower Staffing with the same claim – that he is owed overtime pay under the Fair Labor Standards Act (FLSA) overtime rules. The FLSA generally provides overtime pay of time and a half for hours worked in excess of forty in a given week, but includes a professional exemption which allows employers to deny overtime pay to several classes of professional employees, including those who hold “a valid license or certificate permitting the practice of law” and are “actually engaged in the practice thereof.”
We thought this was an interesting case because of both the legal issues raised and Lola’s characterization of his work, so we decided to have a chat with our attorneys over lunch to see what our review experts thought of these issues. First a quick review of Lola’s case, and then we’ll get to our team’s insights.
The Case: Lola v. Skadden Arps
Lola argued that because his review tasks did not “involve the use of any legal judgement or discretion,” he was not actually engaged in the practice of law, and therefore could not be denied overtime pay under the FLSA’s professional exemption. In September 2014, the United States District Court for the Southern District of New York granted Skadden’s motion to dismiss, but in June of this year, the Second Circuit ruled in favor of Lola, vacating the District Court’s Opinion and remanding the case.
Because the FLSA does not require overtime pay for attorneys “engaged in the practice of law,” both courts had to try interpret the meaning of that phrase. The District Court pointed to North Carolina’s General Statute 84-2.1 which defines the practice of law as “performing any legal service.” Thus, the court then needed to determine whether document review should be considered a “legal service.”
To do that, the district court relied on N.C. State Bar Ethics Committee, 2007 Formal Ethics Op. 12, which explicitly referred to document review (along with conducting due diligence; drafting contracts, pleadings, and memoranda of law; and conducting legal research) as “legal support services.” According to the Opinion, both attorneys and non-attorneys can perform legal support services, but non-attorneys must be supervised when they perform them and attorneys do not. The District Court read this to mean that “document review, like other legal support services, constitutes the practice of law,” regardless of who conducts it.
The Second Circuit disagreed with the District Court’s ruling that engaging in document review per se constitutes practicing law in North Carolina. It pointed out the Ethics Opinion relied upon by the District Court did not “delve into precisely what type of document review falls within the practice of law,” and also noted that while reviewing documents may fall within the practice of law, non-attorneys, who are permitted to perform document review, “may not exercise independent legal judgment in making decisions on behalf of a client.” This suggested to the court that inherent in the definition of the practice of law is the “exercise of at least a modicum of independent legal judgement.”
Foreign assistants may not exercise independent legal judgment in making decisions on behalf of a client. (N.C. State Bar Ethics Committee, 2007 Formal Ethics Op. 12)
The Second Circuit thus rejected the District Court’s view that any and all document review is necessarily the practice of law, and instead requires that at least some independent legal judgment be involved in the review. This fits in nicely with Lola’s complaint, where he asserted that his tasks were “mechanical” and “did not involve the use of any legal judgment or discretion.” Indeed, the court held that a fair reading of his complaint is that he “provided services that a machine could have provided.” Even the defendants conceded at oral argument that document review tasks that could otherwise be performed entirely by machine cannot be said to be the practice of law.
Tanenholz & Associates Attorneys React
We asked our team whether they found Lola’s “I was just a machine” claim believable, and got several thoughtful responses:
“I thought it was interesting that Lola doesn’t say anything about potential privilege determinations in his description of his work. I definitely think making potentially privileged determinations is the practice of law, but because Lola doesn’t mention doing this work, his claim seems more plausible to me.”
“I worked on one project that primarily involved finding search terms not caught by OCR, and I did not know anything about the issues of the case – I don’t think this work was the practice of law. Not every project you come across really asks you to use your legal skills.”
“It is possible that Lola’s review merely required him to determine responsiveness and not privilege, but even so, Lola underestimates the task of determining responsiveness — it is not merely based on highlighting. Document review is the backbone of the discovery process, and considering that cases are won or lost in the discovery phase, Lola is underestimating how important the document review process is to making or breaking a case. The type of documents found largely informs attorneys about whether to settle the case or continue litigating.”
“I do not believe that all document review projects are as simplistic and monotonous as Lola suggests. Determining responsiveness in and of itself is not always cut-and-dry; essentially, we are determining whether documents are relevant to the elements of the causes of action in the case. The use of highlighted terms does not, and should not, be the exclusive means to decide whether to produce or withhold a document; the highlighting can be imperfect and overbroad, which weighs against the idea that machines can effectively perform this task. Moreover, almost every project on which I have worked has required the determination of whether attorney-client privilege or work-product privilege applies. In my opinion, making that decision is essentially the practice of law. As we have seen, the erroneous production of privileged documents has exposed firms to liability — if what contract attorneys do is “not that important,” firms and agencies would not be exposed to huge liability if privileged documents are inadvertently produced.”
Ultimately our attorneys seemed to agree that his claim was possible, but far from typical. Beyond that, nearly everyone expressed some degree of skepticism, and many critiqued his case as short-sighted:
“He’s trying to cut off his nose to spite his face – he wants the overtime at the expense of future work for himself and everyone else as a contract attorney. He has to rely on the ambiguity around “categories” [of documents] to shoehorn his work as plausibly not the practice of law.”