Examples of industries embracing the gig economy continue to grow. As legal firms also embrace this trend, what are the legal issues faced by freelancers in various occupations?
From Uber drivers to skilled marketers, business consultants, and lawyers, freelancers benefit companies by decreasing their running costs. Today, technology allows firms to manage their freelancers. Meanwhile, gig workers are exchanging the security of a steady paycheck to pursue flexibility.
In the U.S., the gig economy has over 50 million workers. Legal issues are not uncommon among them. As the legal world itself embraces freelancing, the need to help freelancers with various law issues continues to rise.
Lawyers and the gig economy
The potential for lawyers to work in the gig economy continues to grow and is attributed to various factors.
First, projected job growth opportunities for lawyers are at 4% for the decade from 2019 to 2029, according to the U.S. Bureau of Labor Statistics. This is the same average as for most occupations and means the legal arena has more graduates than legal jobs.
Second, the pandemic has changed the way lawyers are viewing remote work and flexibility. In the survey conducted by Thompson Reuters Acritas, 77% of senior lawyers indicated their desire to continue working flexible hours. Of these, 22% said they would consider leaving their job if their firms were unwilling to accommodate them.
Finally, an ABA Journal article in 2019 showed that up to 25% of younger lawyers were willing to accept reduced compensation in exchange for more time off and flexible work arrangements.
Demand for legal freelancing has increased in some areas because:
- It can improve smaller firms’ profitability and sole practices since their workforce can be scaled according to their caseloads.
- Allows for the outsourcing of challenging tasks like marketing and social media.
- Law firms can acquire highly skilled people only when needed.
Client acceptance of the legal gig economy model generally depends on the type of law services needed by them. The model is unlikely to be embraced by clients needing litigation, corporate, or estate legal services. On the other hand, once-off legal advice, simple wills, uncontested divorces, and retail legal services do not rely on a developing client-lawyer relationship.
Rights of freelancers
In all industries, freelancers are not covered by the labor laws that guarantee a traditional workforce’s rights. Some of the well-known gig industries make their models work by having processes, policies, and systems in place. As freelancing becomes more popular within the legal sector, it needs to address these issues with innovative thinking.
In some gig economy jobs, legal clarity needs to be given to freelancing employment rights issues. These include sick and maternity leave and pay, protection against discrimination, and the gig workers’ safety. Freelancers have no workplace pension protection and must make contributions towards a pension themselves.
Understanding and representing the legal issues faced by freelancers
As more professions move into freelancing, so the need for lawyers who specialize in this area grows. Besides employment issues in some gig economies, there are another three main reasons why professional freelancers need legal protection. Preventing future problems, resolving current issues, and protecting their income and intellectual property is vital.
These are the primary legal issues professional freelancers face:
Previous employer agreements
Freelancers who were previously employed or are employed part-time need to ensure there are no existing agreements with their employers restricting them from offering their services. Scrutiny of non-compete agreements, non-solicitation agreements, or non-disclosure agreements is essential.
Protection against liability
Creating an LLC will help protect the personal assets of any freelancer. After all, a writer could face a plagiarism suit and lose.
Tax obligations
In the U.S., anyone who is self-employed must pay self-employment taxes and meet their IRS tax obligations.
Insurance
Life and disability insurance are essential, but freelancers should consider:
- Property insurance – covers work equipment
- Professional liability insurance – covers clients in case of negligence
- Cyber insurance – cover any client reimbursement for lost documents from a computer
- Commercial auto insurance – cover any vehicle used for work
- Business interruption insurance – covers lost income
- General liability insurance – covers client injuries at the place of doing business
Client contracts
Contacts and subcontracts can be tricky and legal terms can be deceiving. Professional client contracts need to cover all aspects of the services offered by the freelancer. They must mention the scope of the services provided, ensuring there are no false claims. Contracts must also include payment obligations, ownership of intellectual properties, confidentiality obligations, and termination rights.
As freelancing becomes the norm, the laws impacting business cannot be ignored, and lawyers can protect freelancers from facing unnecessary legal issues.
