Employment Law Compliance for Law Firm Employers

Attorney Classification Under the FLSA

Law firms must properly classify their attorneys under the FLSA. Licensed attorneys practicing law are generally exempt under the learned professional exemption, which requires that the employee's primary duty involves work requiring advanced knowledge in a field of science or learning, customarily acquired through a prolonged course of specialized intellectual instruction. Attorneys who have passed the bar exam typically meet this standard.

However, law school graduates who have not yet passed the bar, legal interns, and attorneys performing primarily non-legal tasks may not qualify for the professional exemption. The analysis must focus on the actual duties performed rather than the employee's credentials.

Staff Attorney and Contract Attorney Issues

The classification of staff attorneys, contract attorneys, and document review attorneys has been the subject of litigation. In Lola v. Skadden, Arps, the Second Circuit held that an attorney performing document review according to criteria set by others, without exercising legal judgment, might not qualify for the professional exemption. This decision underscored that merely holding a law license does not automatically confer exempt status.

Law firms that engage contract attorneys through staffing agencies should verify that these attorneys are properly classified and compensated. If the staffing agency misclassifies a contract attorney, the law firm may face joint employer liability.

Non-Attorney Staff Compliance

Law firms employ significant numbers of non-attorney staff, including paralegals, legal secretaries, office administrators, IT staff, and marketing professionals. Each position must be independently evaluated for exempt or non-exempt status. Paralegals are generally non-exempt because they typically do not exercise sufficient independent judgment to qualify for the administrative exemption, and their work does not require the advanced degree customary for the professional exemption.

Timekeeping for non-exempt staff must accurately capture all hours worked, including time spent checking email after hours, attending firm events, and working through lunch. Law firms' cultures of long hours can create overtime exposure if non-exempt staff mirror the work patterns of attorneys without proper compensation.

Partnership and Equity Issues

Bona fide partners and equity shareholders in law firms are generally not considered employees under the FLSA and most employment statutes. However, the determination of whether an individual is a true partner or merely an employee with a partnership title depends on factors such as the individual's ownership stake, profit-sharing arrangements, involvement in firm governance, control over their own work, and ability to influence firm policies.

The Supreme Court addressed this issue in Clackamas Gastroenterology Associates v. Wells, establishing that the common-law agency test determines whether partners are employees. Firms that designate large numbers of attorneys as partners without providing meaningful ownership rights and management authority risk having those individuals deemed employees for purposes of employment law.

Practical Recommendations

Law firms should review the classification of all attorneys and staff positions for FLSA compliance, implement accurate timekeeping systems for non-exempt employees, ensure partnership agreements reflect genuine ownership and control characteristics, and develop written employment policies that address the unique aspects of law firm practice, including billing expectations, pro bono work, and business development requirements.