In a case that helps clarify what discovery-specific activities constitute the practice of law, District Court Judge Richard Sullivan – a judge in the Southern District of New York – ruled that contract attorneys performing document review for a law firm are not entitled to overtime pay because they are engaged in legal work.

Specifically, the case involved a collective action initiated by contract attorney David Lola in July 2013 against law firm Skadden Arps Slate Meagher & Flom (“Skadden”) and Tower Legal Staffing (“Tower”) arising from work he performed for Tower over the course of 15 months as a contract attorney in North Carolina. Although Lola is a licensed attorney in California, he is not licensed to practice in North Carolina or the Northern District of Ohio, where litigation involving a Skadden client necessitated the review work.

Lola performed elementary review that consisted of identifying search terms appearing in documents, marking those documents for responsiveness, and, occasionally, redacting materials according to protocols Tower and Skadden provided. He earned $25 per hour working 45 to 55-hour weeks. His fellow contract attorneys received similar wages, with no increase in pay for hours worked in excess of 40 hours per week.  Lola claims the legal industry has been exploiting for years contract attorneys who conduct document review projects for extended hours at a time and without overtime compensation. Though Tower hired and paid the contractors working on the Skadden project, it was Skadden that oversaw the work and provided coding protocols and guidelines. Skadden also had the authority to terminate reviewers.

Skadden moved to dismiss the suit last October, arguing that, as a licensed attorney, Lola was exempted from overtime pay under the Fair Labor Standards Act (“FLSA”), and that he had failed to show that Skadden actually employed him.

Under the FLSA, the Department of Labor, which has the authority to exempt employees working in a “in a bona fide… professional capacity,” does not require employers to pay overtime to “holder[s] of a valid license or certificate permitting the practice of law… and is actually engaged in the practice thereof.”

Lola’s counsel argued that “When one’s job consists solely of searching keywords and categorizing those documents based on those keywords, it is absolutely not the practice of law.” Adding, “It involves no legal analysis, judgment, discretion or advice, and can be performed by a non-lawyer.” Skadden argued that, though the tasks are not glamorous, review work represents a core attorney function on par with drafting pleadings and memoranda of law, and conducting legal research.  Skadden also emphasized that the North Carolina Bar acknowledges document review is legal work.

Calling upon professional and ethical codes of North Carolina, where the contract attorneys were conducting their document review, Judge Sullivan determined that document review rises to the level of legal practice — irrespective of its simplicity/complexity or the legal credentials of those performing it. The application of legal judgment, Judge Sullivan said, is not a prerequisite for an activity to be deemed “practice of law.”  Judge Sullivan reasoned that document review is a legal task, like double-checking citations while drafting a brief, that often requires little to no legal judgment.  Judge Sullivan continued, “Document review is the practice of law, regardless of who conducts it. The only difference between lawyers and non-lawyers is that the former can lawfully perform document review without supervision, while the latter cannot.”  Judge Sullivan’s ruling to dismiss Lola’s case weighs heavily on the many licensed lawyers who rely on document review projects as a way to make a living. For law firms, contract attorneys provide a reputable source of credentialed, cost-effective attorneys who spare the client from higher-priced associates, and spare those associates from a discovery obligation that many deem menial.

The question of what actually constitutes the practice of law has only been posed to two other district judges — in the Southern District of Texas in Oberc v. BP PLC  and in the Southern District of New York in Henig v. Quinn Emanuel Urquhart & Sullivan. In the Henig case, whose facts mirror the Skadden dispute, District Judge Ronnie Abrams has allowed discovery to determine whether the plaintiff in the case, William Henig, practiced law under the FLSA while working as a reviewer under the supervision of Quinn Emanuel.

The Department of Labor has given no guidance on what constitutes the practice of law and David Lola’s appeal was argued to the Second Circuit only in January.  In the argument before the Court of Appeals, Skadden argued that both common sense and the FLSA contradicted Lola’s position that document review is not the practice of law.  Lola, in turn, argued that the lower court erred by applying the definition of practicing law in North Carolina – where he conducted the document review – and irrespective of that definition, he was not practicing law. He went on to argue for the adoption of a federal definition of “practice of law.”  Check back here for the Second Circuit’s decision when available.

Lola vs. Skadden Arps – Judge Sullivan 9-16-14 Opinion and Order