Bringing the Gig Economy to Legal Practices
Bringing the Gig Economy to Legal Practices
Rising as a well-deserved pillar in our nation’s economy, the gig workforce continues to make significant contributions to the US job market and GDP. Last year, the gig economy contributed close to 5%, or $1 trillion to the U.S. GDP. This year, the Bureau of Labor estimates 42% of Americans as gig workers, a 6% increase over last year. Given these facts, the gig economy can no longer be seen as a unique niche market, but a legitimate player with valuable contributions. As gig roles become increasingly popular, the global pandemic and resulting economic crisis have presented a new opportunity for businesses and professionals to tap into the gig economy as a way to sustain their livelihood. The opportunities and benefits of gig work are particularly relevant as industries navigate the current volatile business climate.The legal gig economy, along with progressive technology, has allowed legal professionals a means to pivot, allowing them to maintain operations, and ensure seamless continuity for their clients during uncertain times. Innovative companies in the industry are already making the most of these opportunities, paving the way for additional legal professionals to access skilled work and deliver services their clients demand.History of the Gig Economy Understanding of the history of the gig economy through the lens of labor regulations is a critical step for legal professionals who are considering starting a gig role or partnering with gig specialists.On a national scale, labor regulations differ across states and as a result, classify contracted professionals differently. For example, a 2018 landmark case in California (Dynamex Operations West, Inc. vs. The Superior Court of Los Angeles) had a significant impact on the future of the gig economy in the state. The unanimous ruling resulted in the adoption of the new ABC test, offering more stringent guidelines than its predecessor. Building on this ruling, California Assembly Bill 5 (AB5), popularly known as the “gig worker bill,” expands on this case. AB5 was signed into law by Governor Gavin Newsom in September 2019. AB5 requires companies that hire independent contractors to reclassify them as employees, with some exceptions. Together, the ABC test and AB5 put the burden of proof on employers to ensure fair labor practices in the state. New legislation and legal precedents such as these have tremendous implications for how gig professionals can access work, especially while the U.S. employment market navigates turbulence.Notable players in the gig economy - Lyft and Uber, are advocating for ride-sharing professionals and continue to heavily impact the future of the gig workforce. For example, the rideshare leaders announced they would halt operations in California unless the courts intervened on the AB5 verdict. In August 2020, the courts temporarily responded, preventing thousands of professionals from immediately losing their primary source of income. However, that preliminary injunction only lasts until voters decide their fate with Proposition 22 in November.Impact of Gig Legislation on the Legal Industry As Uber and Lyft continue to appeal the initial ruling, some gig professions were successful in winning exemptions to AB5, given they met certain criteria. These exemption standards include the ability for contractors to negotiate their own rates, have direct communication with customers, and earn at least twice the minimum wage. These exemptions did include attorneys, but left process servers in the gray area. Meaning, process servers have a current lack of clarity around whether they can maintain contractor classification in CA.
Driver with an Apple Watch; image by Luca Bravo, via Unsplash.com.
About Sascha Mehlhase
Sascha Mehlhase is the vice president of products and innovation at ABC Legal Services. Sascha oversees ABC Legal’s growing product, marketing and customer experience teams in transforming ABC Legal into the best-in-class technology and service industry leader, while simultaneously finding new avenues to scale. With nearly 20 years of product and marketing experience in software and technology, Sascha has advanced product strategies and led global teams in a variety of industries. Most recently, as senior director of product management at Intrado, Sascha oversaw their cloud-based telecom and communications platform as a service business and drove the company’s international product expansion into more than 170 countries. Sascha earned an MBA from Loyola University, Chicago and a B.A. in Social Economics from Hamburg University, Germany.