Are Contract Lawyers Automatically Independent Contractors?

Many new lawyers seek out contract lawyering assignments as a means of getting their practice off the ground.  If you are interested in contract lawyering, there are many excellent resources to help you get started.

Begin by checking out the following forms and practice aids available from the Professional Liability Fund at no charge:

  • Contract Lawyers Checklist
  • Contract Project – Letter of Understanding
  • Contract Project Intake Sheet
  • Letter Declining Contract Project
  • Project Assignment

Next, order the following free CLEs:

  • Choice of Entity for Contract Lawyers and Sole/Small Firm Practitioners
  • Practical Contract Lawyering

Both can be found on the PLF Web site.  Select Programs on CD/DVD under the Loss Prevention – CLE heading.

Once you’ve done a bit of homework you will start to get the drift that there is a bit more involved in being a contract lawyer than merely taking an assignment and completing a project.  For example, your classification.  Are you an employee or an independent contractor of the hiring firm?

Some contract lawyers assume they are “independent contractors” because they produce “contract work.”  But a true “independent contractor” must meet the criteria of federal and state agencies for income tax, employment tax, wage and hour, pension, health, Medicare, retirement, disability, workers’ compensation, and unemployment insurance purposes – to name a few.  So how to proceed?

In their article Contract Lawyers: Independent Contractors or Employees? Lisa Brown and Jim Vogele provide some answers.

First, enter into a written agreement with the hiring firm confirming your independent contractor status.  Brown and Vogele suggest including the following provisions:

  • The contract lawyer is responsible for his or her own income tax withholding and Social Security self-employment taxes, professional liability insurance, and excess coverage.
  • The firm will issue a Form 1099 for the services performed by the contract lawyer.
  • An acknowledgement that this is not a joint venture and the parties do not have any shared business interests.
  • The contract lawyer is currently licensed and in good standing with the Oregon State Bar, has current professional liability coverage, and has no pending malpractice claims or ethics complaints.
  • The contract lawyer does not have a conflict with any of the parties involved in the assigned project.
  • The contract lawyer agrees to at all times fulfill his or her professional duties to protect the client’s privileged and confidential information.
  • The contract lawyer will at all times comply with his or her ethical and legal responsibilities as a lawyer licensed to practice law in the state of Oregon.
  • The contract lawyer will return all client documents, including all copies of the documents, when the project is complete.
  • The contract lawyer will not receive any employee benefits or workers’ compensation coverage.

Second, behave like an independent contractor:

  1. Maintain your own office (virtual or brick-and-mortar)
  2. Provide services to a variety of firms
  3. Print and use your own business cards
  4. Keep an e-mail account separate from the hiring firm(s)
  5. Use your own online legal research tools, computer, and copying capability
  6. Get your own taxpayer ID
  7. Work independently, setting your own hours
  8. Exercise control over how your work is performed
  9. Invoice the hiring firm and arrange for payment on a project basis
  10. Obtain a 1099 from the hiring firm at year-end
  11. Fulfill the other hallmarks of working as an independent contractor

Read the complete article on the Professional Liability Fund Web site.

3 thoughts on “Are Contract Lawyers Automatically Independent Contractors?

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