Yup. Me too.
It's not as bad with design/IT agencies anymore, but I know that lawyer agencies are still notorious for this. Big-ish lawyer agencies with dozens of lawyers have no employees, everyone is a "partner" (or whatever the term is).
In fact it's a funny rite of passage for most lawyers: after graduation they have to work for 3 years for a law firm before they are allowed to take the bar exam and become "real" lawyers. During this time they earn a salary. When they finally become "real" lawyers by passing the bar, they get fired. :) And immediately taken back on as contractors.
Associate lawyers (what you are before partner) are paid a regular salary as employees.
Law firms aren't healthy workplaces, but I wouldn't worry about the legal rights of the lawyers working for them.