Crain’s New York Business (New York) (01/09/12) Fioravante, Janice

An increasing number of New York City law firms are turning to contract help. The economic climate has prompted many corporate law firms to run so lean that they have to outsource legal work. According to the National Law Journal’s April survey, almost 2,900 fewer lawyers worked for the nation’s largest 250 law firms in 2010; about 6,600 attorneys departed such employment in 2009.

With so many large law firms located in the city, there is a wide talent pool, extending from laid-off lawyers to recent law school graduates with prestigious degrees who are having difficulty obtaining associate positions. While $60 to $80 an hour was the prerecession norm for contract lawyers, current rates have dipped to between $32 and $40, and sometimes are as low as $25. Providers of contract help say that they see no signs of the trend slowing down, as staffing firms outbid each other to be the lowest-cost suppliers of legal talent, in a process called reverse bidding.

“Corporations are refusing to pay $250 an hour for first- or second-year attorneys,” says Courtney Sapire, a co-founder of RFx Legal, which automates the process of finding contract lawyers and offers other services. “They want the level of expertise to match the task that they’re billing for.”