The gig economy - how does it work for lawyers?
#legalnomad #gigeconomy #flexiblelaw #lawyersontap
The gig economy has made huge strides in recent years, particularly in north America (59 million workers) and Europe (28 million workers), with over 1 billion gig workers estimated worldwide.
But when you hear about the gig economy, what does that mean to you? Uber drivers? Food delivery drivers, freelance designers?
Admittedly, they do make up many gig economy workers in the world. But how about lawyers?
Traditionally, there has existed a “locum solicitor” who would operate on a freelance basis for law firms. But this brings up images of high street law firms from the 1970s and 80s looking for a retired lawyer to fill in for a few months and act as a general practitioner to advise on conveyancing, wills, and the odd criminal proceedings.
But the profiles of lawyers today who are available on a flexible retainer basis, or "legal nomads" as I like to call them, are likely to be:
- In their 30s or 40s, or at the higher end, in their mid to late-50s;
- Trained and qualified in a major commercial law firm;
- Undertaken at least 10,000 hours of work in their specialised practice area;
- Majoring as an expert in at least one commercial practice area of law;
- Have a significant amount of in-house legal experience and thus greater commercial understandings of how businesses work;
- Be technologically savvy (yes, they can type their own emails, markup their own documents and make a document comparison all by themselves!); and
- Faster, more agile than their locum counterparts of years gone by.
Using such talent as an interim solution still seems an alien concept among many organisations (law firms included) despite the revolutionary changes that have taken place to work practices since the onset of the coronavirus (even earlier in Hong Kong, if you include the disruptions brought about by the civil unrest of 2019).
Whilst there is a growing number of flexible legal service providers in the market (including law firms themselves having a flexible law arm), it is still a burgeoning industry in Asia. Asian businesses have not yet adopted a common practice to hire legal nomads across any industry.
But once organisations understand how it makes far greater economic sense to utilise external providers like these in greater numbers, it will revolutionise the way in which both businesses and professionals view this modus operandi, as well help businesses operate more efficiently and effectively.
After all, organisations are quick to adopt a flexible method when it comes to office use with the renting of service office space - that level of flexibility enables a company to better adapt to its own fluctuating business needs. Why not the same with lawyers offering interim support? Or any other qualified or experienced professionals for that matter?
A. Organisational Challenges
Of course, there are still many organisational perception-challenges that need to be overcome. Below are the three most common hurdles.
1. It’s not yet common standard / practice
Working from home was not considered widespread practice until 2020. So, common standards in any work environment can change.
Companies often only hire a law firm to handle a specific matter, such as advising on a dispute, or to advise them on a loan or credit facility, or to advise them on a sale of a business and/or assets. But there are so many companies with no in-house counsel who simply don’t have their “house in order” when it comes to an effective filing system of legal documents, harmonising all their employment agreements and service contracts, or having an updated set of health and safety policies, or supplier terms and conditions, what I would deem to be the “basic infrastructure” of the business.
Imagine hiring a qualified experienced lawyer who can come in, review your internal processes, provide guidance on what needs to be done to be, and complete most, if not all, of these tasks within a set period of say three or four months, all at a fixed price. Add all those items and imagine what a reputable commercial law firm would charge your business in doing the same work.
This is just one goal that an interim lawyer can help achieve. And it’s patently SMART (Specific, Measurable, Achievable, Realistic, and Timely). Of course, there are many other goals or projects that engaging a lawyer on a flexible retainer can achieve, but this is a good starting point to think about why, how and where a contract lawyer could add value to a business.
2. Opportunity-cost benefit
Some law firm clients have expressed concern about the cost of training a lawyer to adapt to their systems proportionate to the time that is spent working for them. In other words, “there’s no point, they’ll leave after a couple of months anyway”.
This doesn’t consider the fact that a suitably qualified lawyer with relevant experience in that practice area would be able to hit the ground running after just two days’ induction (as with all permanent employees) and can be an integral member of the team in a very short space of time.
Paralegals are often hired on a three month or six-month contract, often to assist on a group action matter or to provide support on a major IPO or M&A deal. And with the cyclical nature of the corporate market, this could work well for many law firms who don’t have to continue hiring contract lawyers to safeguard the employment of their core team members.
In the commercial world, many organisations will argue that their current in-house legal team and external counsel relationships suffice to cover their current needs. But it doesn’t consider that there will be times when emergency cover is needed (for example, to cover for maternity leave or long-term sickness) or when the time of your head of legal is taken up with high volumes of low-level matters which is too expensive to handle by external law firms. Your head of legal is to add intrinsic value of your business through quality strategic advice, not to update a set of terms for your various business units and deal with $5,000 potential disputes.
3. The flight risk
The majority of qualified lawyers in the gig economy are there through choice, not to use as a steppingstone to a permanent role. They like that flexibility and ability to choose which gig to take on. It creates variety and therefore interest in a role.
And often, employers can provide an end-of-term bonus to incentivise the gig worker to remain with the organisation until the very end of the project.
B. Concerns from the worker's perspective
The concerns about entering the gig economy go two ways as there remains a dearth of legally qualified talent who are willing and able to work on an interim basis. From a worker's perspective, the key concerns are as follows.
1. Job security
In Asia the word ‘job’ is often associated with ‘permanent job‘. Such connotations are a legacy of the 1950s and 60s when jobs were so scarce across the region that it has been etched into people's minds that a permanent job is best, no matter what. Granted, Hong Kong and many other Asian financial hubs are not cheap places to live and work in. But when we are experiencing a rise in demand for flexible lawyers among more organisations in Asia, the abundance of roles to choose from in future will mean that job security concerns will be outdated.
2. The stigma of working as a contract lawyer
Working in the gig economy isn’t for everyone. In fact, most lawyers, compliance and other professionals will want to stay 'permanently' employed. And there is a certain stigma attached to working as a contract lawyer. The objections that often come up include, "it's like being an Uber driver," or "it's not the done thing."
But these views are increasingly outdated when you speak to the younger generation of lawyers who want to try their hand out at different things or wish to have a genuine work life balance or a high degree of flexibility or autonomy. And there are those who have several hustles and wish to have the flexibility of having paid work for part of most of the year whilst enabling them to work on other side projects or to make longer travel plans further afield, in which case the gig economy strikes that ideal equilibrium. And surprisingly, we also see that at the most senior end of the professions whose children have flown the nest and there is more financial liberty to 'pick and choose' their projects that speak to their heart, rather than to their bank account.
3. The lack of volume of such work in the legal field
This area can be viewed through the, “which came first, the chicken or egg,” conundrum. The relative number of interim vacancies in Hong Kong and the region has meant that compared to other parts of the world, the number of gig workers in the legal sector in Asia remains quite low. Again, this is an outdated way of thinking, particularly as COVID-19 has helped revolutionise corporate mindsets on the working practices of their workforce, and this growing acceptance that's been led by the technology industry is now starting to filter through to other sectors. The likes of of Uber, Kung Fu Panda/Deliveroo, and Gogo X/Lalamove may be the pioneers of the gig economy but they've set the scene to enable other businesses to also adopt similar working arrangements for other professionals in their organization.
C. The gig economy will only grow in Asia
In this third and final part, we look at factors that could drive up demand for flexible lawyers on retainer.
1. Compliance and regulations are going global
Among many large organisations in Hong Kong, particularly in the financial services sector, we detect a large amount of interest and pent-up demand for not just lawyers but also compliance professionals in the gig economy (both individuals and managed legal services) as regulations are having increasing global reach and therefore increasing in complexity and volume.
It’s not just a case of if, but when the taps will be released to unfurl a greater demand for interim lawyers and compliance professionals. And to support them, organisations also need more back-office professionals to handle administration, HR/payroll, business development and marketing, IT support or accounting and finance. Again, organisations can consider such professionals on a flexible retainer.
2. The BNO phenomenon, the COVID-19 Pandemic and global depression
A perfect storm has brewed in Hong Kong with several events turning into factors that have seen the city experience a high number of people leaving in the last few years that has created a skills gap in the SARs. These include the protracted zero-covid rules imposed in Hong Kong and the Mainland (which only ended in January 2023) which have seen an exodus of overseas companies and expats in the region, and the introduction of the National Security Laws in Hong Kong as a direct result of the civil unrest of 2019, have further enabled Hong Kong-born and highly skilled residents to leave.
The extension of the BNO Passport programme in the UK announced in January 2021 and a similar relaxation of immigration rules in Canada and Australia have created a skills gap in many industries. In the twelve months leading up to mid-2022 alone, 113,000 residents left Hong Kong, whilst the number of foreign work visas issued was 13,800, down from 41,000 in 2019. Whilst the Hong Kong government has announced measures to attract foreign talent, it will still take some time to make up for the considerable shortfall in talent.
With the current dearth of talent among many industries, many organisations continue to struggle to find the right level of talent for their needs. And with the volatility in the tech and financial markets meaning that significant numbers of professionals have recently been laid off, employers are having to look at ways to maintain their human capital to support their business without hiring permanent staff. As a result, there is a growing acceptance in the use of flexible talent.
3. Changing demands of the next generation of lawyers
The year 2021 saw the term, “Great Resignation” introduced into our everyday vernacular as many employees voluntarily resigned after two years of little or no career progress caused by the pandemic worldwide. Countless surveys show millennials have a much different perception about their careers, work-life balance, and working cultures of which they wish to be a part. There is certainly a growing acceptance of changing jobs more frequently, having greater variety in their roles, and more flexibility in where they work (including working remotely) and how they work. The gig economy is one that would serve them well, and one that can also serve organisations well, if embraced properly.
4. A simpler model and more cost-effective service
As an all-in-one package expressed as a daily rate, organisations don’t need to worry about insurance, MPF (pensions) and other benefits.
5. The gig economy is expected to grow
In the US alone, there were 57.3m gig workers in 2022. By 2027, that figure is expected to grow by almost 20m to 86.5m workers, just a short five years later. And according to a report by Mastercard in 2020, the amount generated by the global gig economy is forecast to reach US$455 bn by 2023.
6. Innovation and technology will drive the legal gig economy
The foundation of legal technology exists with legislation, case law and other legal resources being available online. And in the past five years, increasingly sophisticated legal technology tools (including advances in AI) have been developed and made available to businesses of all sizes. With these strides in technology to make businesses more efficient and productive, it will make hiring gig workers in the legal and regulatory field even more economic and business sense to achieve an organisation’s goals.
It seems that the barrier to the development of the legal gig economy is more a question of mindset of key decision-makers over reality. The conditions are ripe to help facilitate and drive growth in this sector, not just in Hong Kong, but across the Asia region. We are experiencing more enquiries from experienced, talented lawyers seeking contract roles and with the express intention of ‘making a difference’ to an organisation.
Businesses both large and small, take note, there is a wealth of legal knowledge and experience that can be applied to your organisation and to give you that cutting-edge you need. And you don't have to get tied into a seven-year relationship to find out. Making an impact and adding value will come much more quickly than you expect.
Statistics on gig-workers worldwide:
Population drop: https://www.thestandard.com.hk/breaking-news/section/4/193375/City-sees-population-drop-with-113,200-people-leaving
Work visas issued in Hong Kong: