Freelance lawyers, also known as contract attorneys, are attorneys who work independently on a case-by-case basis rather than being employed full time by a law firm or legal department. The legal industry has embraced remote work and many law offices are looking to hire contract attorneys rather than full-time associate attorneys for their job openings and staffing needs.
More and more talented attorneys are embarking on a full-time career as a contract attorney. Many other attorneys are considering a similar move but are curious about contract attorney salaries. Let’s explore salary ranges and factors for contract attorney jobs.
What Factors Should Be Considered When Setting Freelance Rates?
The annual salary that freelance lawyers make can vary significantly depending upon several factors. These factors include the freelancer’s location, years of experience, practice area expertise, as well as the demands of the work being delegated to independent contractors.
The pay rate a freelancer can reasonably expect to receive for contract work varies widely by geographic location. Market rates for legal work in large cities like New York, Los Angeles, or San Francisco will generally be higher than a small town in the Midwest.
When calculating your freelance rate consider the state where you are physically located and the state for which you are providing services. Like pay rate considerations for traditional legal work in cities versus rural areas, the rates hiring attorneys are willing to pay a contract lawyer will also take location into consideration.
A great resource for researching the hourly market rates for legal services is the 2022 Clio Legal Trends Report. The report includes an index with hourly rate data by state and practice area.
As a general rule of thumb, hiring attorneys are generally willing to pay a contract lawyer about 30-40% of the market hourly rate. This means if the billable hour rate you would charge a client is $300 per hour, a contract lawyer doing freelance work in that area of law would likely be able to command around $90-$120 per hour.
Your years of experience will also be a contributing factor to consider when setting your freelancing rate.
The pay for an entry level contract attorney will likely be lower than for freelancers who have been practicing for ten or more years. That being said, there is still demand for contract attorneys fresh out of law school to perform freelance work like research, document review and helping with discovery.
The more experience you have with the specific tasks, the more reasonable it is to charge a higher rate. However, if you are applying for freelance opportunities in which you have more experience than the minimum experience required it may not be reasonable to request a higher rate because the hiring attorney has not deemed that level of experience as necessary for the task at hand. You don’t have to work for less than your desired rate, but you need to be careful not to outprice yourself for opportunities you are interested in because you deem yourself overqualified for the opportunity.
However, you can use your experience to attract higher paying opportunities. Keep in mind that if you are a newer attorney, you most likely cannot demand the top rates for your location and practice area.
Practice Area Expertise
Another factor to consider in setting your contract lawyer rate is the practice area expertise that is required for the work. If very little expertise is required, like simply completing pre-made legal documents or templates, a higher rate may not be justified, regardless of your level of expertise.
In contrast, if the freelance job requires expertise in a highly niche legal field, a lengthy amount of time practicing in that area of law, or even when a state specific legal matter is involved then you may be able to set a higher pay rate for your freelance services. Projects involving complex litigation or corporate transactions may warrant a higher pay rate. Expertise in practice areas such as intellectual property, healthcare law, and real estate generally will bring higher rates.
Similarly, projects requiring a greater degree of involvement, like in person appearances or direct client representations, can also warrant setting your fee higher. Additionally, the turnaround time required can play a role in computing the rate you set. If you have a quick turnaround time for the project, then a higher fee is usually justified.
Hourly Rate vs. Flat Fee
Beyond the factors to consider when setting the rate for your freelance work, you should also consider whether you prefer to work on a flat rate or hourly basis. Freelance lawyers typically charge their clients on an hourly basis. The rate for a billable hour is typically based on the lawyer’s level of experience and expertise, as well as the type of work being performed and the location in which the work is being done.
Freelance lawyers may have different hourly rates for different types of clients and work. Contract attorneys may also charge flat fees for their services. A flat fee is a set amount that is agreed upon in advance for a specific legal service or project. Price and pay predictability are benefits to the hiring attorney and freelance lawyer when a flat fee arrangement is used. Flat fees can also be tiered to define different levels of service at different price points.
How Does the Data Favor Freelance Legal Work?
It is difficult to provide a specific estimate of how much freelance attorneys make, as the amount can vary drastically depending on the factors listed above. However, according to the Bureau of Labor Statistics, as of May 2021, the median salary for lawyers is $127,990 per year, which amounts to $61.54 per hour. The survey does not distinguish between lawyers employed in law firms or other legal organizations and freelance lawyers but does predict over the next decade that jobs for lawyers will increase by 10 percent, faster than the average for all occupations, and states that about 48,700 openings for lawyers are projected each year, on average, with many of those openings expected to result from the need to replace workers who transfer to different occupations or exit the labor force.
That said, with research from Statista predicting that in the next five years over 50% of the total U.S. Workforce will be comprised of freelancers, with lawyers among the top professionals found most likely to freelance, currently making up 16% of U.S. freelancers, it is safe to assume that an increasing number of these legal opportunities will be occupied by contract attorneys.
Finance Online has also provided some encouraging data regarding income statistics that is generally applicable to gig economy workers. This information has been compiled by Finance Online from various studies and the following data hints at the lucrative opportunity that becoming a freelance attorney could afford you.
- Gig economy wages and participation grew 33% in 2020. (daVinci Payments, 2021)
- In 2020, the estimated total earnings of adult US-based gig economy workers was $1.6 trillion. (daVinci Payments, 2021)
- In 2019, 20% of freelancers in the US became high-earners or those who earn $100,000 annually. (Statista Research Department, 2021)
- 48% of freelancers get paid based on their fixed rate while 29% prefer hourly rate. (Statista Research Department, 2021)
- The hourly rate of gig workers in the US can range between $31 to over $115. (Sbai, 2021)
- More than 50% of independent workers from different parts of the world are supplemental earners. (DaVinci Payments, 2021)
- 17.8% of part-time gig workers participate in the gig economy for additional income. (Hayes, et al., 2019)
- Gig economy has the second-highest number of work opportunities offered. (Hayes, et al., 2019)
- 24% of workers across 19 countries are full-time gig workers while 9% are also employed in a traditional setting. (Hayes, et al., 2019)
- Gig economy’s market was worth $248.3 billion in 2019 and was estimated to reach $296.7 billion in 2020. (Sbai, 2021)
- Approximately 68 million workers in the United States work freelance. (Statista Research Department, 2021)
- 36% of the US workforce have done freelance work in the past 12 months. (Upwork, 2020)
- By 2028, the population of US-based freelance workers is projected to reach 90.1 million. (Statista Research Department, 2021)
- 78% of gig workers plan to do the same gig work or more in the next year. (DaVinci Payments, 2021)
- 40% of workers participate in gig work while still employed, compared to 30% who prefer doing only gig work full time. (DaVinci Payments, 2021)
- Professional services account for the majority of part-time (14.9%) and full-time (17%) gig workers. (Hayes, et al., 2019)
What Does it Cost to Become a Freelance Attorney?
The costs associated with working as a freelance attorney will vary depending on a number of factors, including the rates you charge, types of services you provided, and the expenses you incur. A few expenses that the average contract attorney may need to consider are professional liability premiums, office expenses, equipment, legal research, marketing efforts, and taxes. It is important to consider and plan for necessary expenses to factor them in when setting your freelance rates to ensure that your freelance business is sustainable and suitable for your individual needs.
For remote associates, LAWCLERK provides the freedom to work when and where you want and to choose the freelance opportunities you are interested in working on. Plus, there is no fee to join LAWCLERK and no monthly fees. Our team can help you successfully navigate the world of legal freelancing. Be sure to check out our full range of resources to help you learn how to be a freelance lawyer and start making money!