How Small and Solo Law Firms Save Money When Hiring a 1099 Contracted Paralegal

Staffing is an incredible burden small and solo law firms are faced with in running and scaling their practice. They are at the mercy of the job market that surrounds them each and every day in which they are finding, managing and retaining quality staff. Imagine the ability to control that expensive pain point within your business while still receiving the incredible outcomes that results in having a highly qualified and experienced team behind you. Hiring 1099 contracted paralegals gives you that control, and provides you with the endless ability to leverage your profit margins. When uncovering the amount of savings a small or solo law firm can experience when opting into hiring a 1099 contracted paralegal, we have to look at the entire picture as a whole. Savings a law firm can experience when engaging with contracted paralegal services comes from four main topics in which I discuss below.

What a Traditional Employee’s Salary Really Costs You

Many firms are shocked to find that even with the higher hourly rate of contract workers, they eliminate up to $20,000 in cost per year.  This is broken down into the following using a full time paralegal at the national average salary of $55,000.00 per year:

According to CPA’s, on average, an employee will actually cost 25% to 40% above their salary amount.  This, of course, is a wide spread percentage based upon what these firms are planning to offer their employees.  This percentage includes recruiting, on-boarding and new hire training, benefits (paid time off, sick leave, health insurance, retirement, etc.), state and federal taxes, unemployment insurance, workers’ compensation insurance, office space and equipment, and retention. 

Therefore, that full time hire at $55,000 per year is now costing you between approximately $69,000 and $77,000.00 a year. 

You Only Pay for Productive Hours

Research suggests that in an eight-hour day, the average worker is only productive for two hours and 53 minutes. That's right--your employees are probably only productive for around three hours a day.

When potential clients call me, we break down a guesstimated amount of hours they will be needing from their contract paralegal. One time, I had a client contact me that they needed to replace an entire full time position as they had lost their paralegal during COVID furloughs. She felt she absolutely needed, without question, forty hours per week. She justified this by explaining that, prior to the furlough, the paralegal had been swamped in work even during an 8 hour day.

With contract work, we are only on your clock when we are being productive. Whatever it is in your law firm that pulls away the attention of your employees (chatting with co-workers, texting, browsing social media, coffee breaks, etc.), paying for unproductive time is an incredible waste of your resources. Research suggests that if you're productive for just three hours a day, you're outputting the same amount as someone in the office for eight hours. The difference is — you only pay us for those three hours and not the full eight.

In conclusion, if you hire us for 15 hours per week, we will produce the same amount of work (if not more - keep reading) as your in-house employee produced in 40 hours per week.

A Higher Level of Experience = A Higher Level of Efficiency

My clients are surprised to find that when they first call me and tell me they need 30-40 hours of support per week, I suggest doing a trial month just to see where they are actually falling in hours.  I mean, don’t get me wrong, I hate encouraging them not to utilize us the max amount of hours, but I also know that they are about to experience a shock in productivity.  With the level of experience that is accessible across the nation in the contracted space, these paralegals come with an efficiency many firms have never come close to experiencing.  What might have taken their prior hire 5 hours to complete takes this senior level professional 2 (for example). 

That productivity (and elimination of unproductive hours explained above) is what really sells the contract paralegal.  The attorney can really control their return on investment.   For instance, if it is taking your contract paralegal 3 hours to draft a simple estate plan, and you know there are no other costs associated (because we are eliminating all normal employee costs as previously stated), you know exactly what you need to charge on your retainers to be where you want to be on your profit margins.

It becomes a situation in which you can feel complete perspective is gained on each and every one of your retainers.  The business management piece becomes more sophisticated for this reason.

The Ability to Fluctuate Your Hours

When you hire an employee, especially a qualified senior level paralegal, you are forced to hire them at either part-time or full-time hours. You know you will not keep a paralegal for very long if you bring them in for anything less than twenty hours per week.

This is an incredible weight to carry for a small or solo law firm. We know the ebb and flows that come with the practice of law. We know that you could have ten consultations booked in two weeks, and then none for the next two months. You know you experience extreme fluctuations of workload. So you’re forced to make an incredibly blind decision when you need help.

You either hire a paralegal full time and sacrifice your own salary for when things get slow, or you hire a part time paralegal and know you are going to have to give late nights and weekends at the office to stay above water on your work load.

When you opt into hiring contract paralegals (the right one), you can increase and decrease your usage based upon your busy and slow seasons. You don’t have to commit to hiring full time work knowing you will be taking an incredible hit during your slow seasons. You don’t have to sacrifice your attorney billable hours to keep up on the paralegal work during your busy seasons. You remain in control of what you are buying and when you are buying it.

Conclusion

The savings law firms can experience when hiring a contracted paralegal are endless. With the elimination of normal employee costs, unproductive hours, an increase in efficiency and the ability to fluctuate your hours, the savings you can experience is entirely up to you. This gives you an incredible opportunity to control the profit margins of your business. It provides you with predictability, forecasting, and a sense of security in your staff consistency. In looking at my client list, I would say the average they save across the board is approximately $20,000 per year in all respects of expenses, but the ability for increasing profit is endless.

I work together with each and every one of my attorneys to make sure we are always achieving their greatest return on investment when working with us. You finally have the ability to take control of your team and there is no better time than today to begin.