The Staffing Solution Every Solo Law Firm is Looking For
Solo and small firms can substantially benefit from hiring a contract paralegal versus a traditional in house paralegal. Find out how law firms are benefiting from contract paralegals today.
Talent pool in the area isn’t sufficient or is too expensive to have a paralegal on staff
Talent is all over this country. Many of the paralegals that are leaning into the contracted world of their career are doing so due to family reasons: military spouses, frequent moves, growing their family and daycare is not feasible for what they can make in their area.
Those that find work are getting in the way of their family (kids drop off, medical appointments, working in the office until 10 at night). Those in the middle of their careers want to slow down from the daily commutes, paralegals that now have grandchildren and want to move closer to their family, or, quite honestly, COVID has made remote work incredibly appealing to paralegals and they don’t want to go back to the office.
Many of the paralegals opting into contract work are highly skilled and have senior level experience in their field. They’re the paralegals that big firms or corporations want and are offering 80K plus salaries with benefits.
These paralegals are weighing their options and those that choose the contract world are doing so for the flexibility and convenience it brings. They have made the conscious decision that they would rather have the benefits of contract work over the 80K salary.
That is your lane of access to those senior level paralegals and those are who are going to solve this problem. They will support your caseload so you can be free to focus on the things that increase profitability.
Leveraging contract workers ends staff fragility
Small firms experience extreme turnover rates. It seems the door is constantly revolving. Every new hire brings an incredible slow down in production and thus, a decrease in profits. It seems once they have hired a paralegal and put in the time to train, that paralegal leaves for better opportunities.
The reality of the workforce is no employee, contracted or W-2 brings with a guarantee of a lifetime relationship. When I was subcontracting, one of my clients once said to me on our very first day together, “It is statistically unlikely we will never part ways.” At first, that really threw me off. I actually lost sleep over that because I was actually truly in it for the long haul with her.
Over time I came to realize though, people and business changes and at some point, there is going to be something that will separate you from your employee. The difference contract workers bring is that the moment they switch into contract work, they become business owners as well. They need you as their client. They WANT you as their client. They aren’t there until the next best job offer comes along.
Typically, with contract work, attorneys aren’t committing to full or even part time hours. They may be utilizing paralegals on an “as needed basis” or for a set five hours per week. Contract workers need to have multiple clients to get to their 20 or 40 hour per week goal, so they need to keep you and grow with you.
Additionally, if you have made the decision to hire contract workers, opting into an agency model of contract work is ideal. The reason why is the owner of that company is going to be the one committing to you long term. They will (or should) take your staffing as seriously as they take their own.
For example, I have had situations in which the paralegal I have assigned to a specific attorney does end up finding a full time contracted position. When she told me, she also told me she was not “going anywhere.” She stayed in that relationship while we brought in a new paralegal, trained her in the systems she had grown accustomed to, and monitored the cases that were being worked and taken over fully before transitioning out.
This comes down to finding the right contract paralegal. It isn’t a solution until deep thought and processes are put in place during the hiring on the contractors. There are specific character traits, long term goals, and overall personality traits that, when paid attention to, will bring a committed professional into your practice, rather than a fill in hire until they quit and move on.
What COVID-19 taught us as it relates to staff fragility
That direct hires won’t be sidelined for long until they find a new opportunity. Many of my now clients called me after the thick of the pandemic around May. They told me they had furloughed employees during the thick of the shut downs and now that they were ready to bring them back to work, have lost them completely to a different firm. Others had told me they pulled them back to part time because they couldn’t afford paying them full time when they didn’t have the work to justify those hours.
What we should have learned from those situations is that even absent a pandemic, employed staff is not flexible during ebb and flows. Though the pandemic was a major “EBB,” I think all law firm owners can admit they always experience some level of up and down with their client load.
How contracted paralegals solve this issue is the simple fact that contract work is also ebb and flow, and those that have experience in doing contract work already know and expect it.
Keep in mind, most paralegals working in a contracted capacity have a bit more flexibility in their income needs. They have entered this world and accepted it for what it is. The up months are a bonus, and the slow months are to be expected.
When you have to cut a W-2 employees hours, it is absolutely detrimental to their livelihood. They need that job to survive, or they would have taken it in the first place.
With this contrast, and with a well-hired contract paralegal, you will experience this new sense of feeling you have flexibility and control of your staffing and profit margins. You have the ability to increase your use when needed, and sideline your paralegal when not. If it is a good engagement, that paralegal will be there waiting.
How hiring under a 1099 relationship saves the firm money
It is known that contract paralegals have a higher hourly rate than say a W-2 employee would. 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, retention and unproductive hours.
Therefore, that full time hire at $55,000 per year is now costing you between approximately $69,000 and $77,000.00 a year.
However, the savings are endless. This is because, as previously mentioned, law firm owners now have the ability to fluctuate the usage of their staff without a high risk of losing them. Also, 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 tell them let's do a trial month just to see where they are actually falling.
I mean, 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. Circling back to 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 seeing. 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 is what really sells the contract paralegal. The attorney can then look at their ROI. For instance, it is taking my contract paralegal 3 hours to draft a simple estate plan, and I know there are no other costs associated (because we are eliminating all normal employee costs as previously stated), so I need to charge x amount of dollars to be where I want to be on my profit margins.
It becomes a situation in which they feel complete perspective is gained on each of their clients. The business management piece becomes more sophisticated for this reason.
In looking at my clients, I would say the average they save across the board is approximately $20,000 per year in all respects of expenses.
Should firms go completely without in-house traditional staffing? What about work that can’t be done remotely?
That depends. I have found the best set up for a firm that isn’t completely remote/virtual should always have an exceptional, committed secretary on hand. This position is becoming too underrated when people are searching and hiring.
A secretary is the person the client first meets. They become the face of your firm in the moment a potential new client calls. They can make or break an existing client relationship. They can either leave a client feeling better or worse in one simple phone call.
One of my bosses when I told him years ago that the term “secretary” was outdated, he said, “I don’t know why people look at the word “secretary” as degrading. Secretaries go back to historic times. They knew all the secrets of the offices.”
I believe firms don’t take enough seriousness in the hiring process for their secretary. It is a true skill set. As a paralegal, I interacted with many secretaries and, in a small firm, they often were the only names I remembered. One of my old bosses had one secretary for 35 years of his career.
So I do recommend every law firm have that permanent, committed secretary role. At a $32,000 national average, it is a position that is more easily committable to.
I have a few clients, though, that are completely virtual. They don’t have a brick and mortar anywhere, and all of their staff (contracted or W-2) work virtually. Of course, there is a fine line of what legally constitutes a 1099 relationship with the IRS. However, most firms that are virtual have already realized the world of pay for exactly what you get, and are well adapted to that 1099 relationship.
There are several companies out there that can fulfill roles outside of paralegal work:
Phone-answering companies; Smith AI is one my clients seem to be using;
Incredible Virtual Assistants and Executive Assistants that can fulfill some of those secretarial requirements; and
Mailing service companies, people that specialize specifically in e-filing, medical summaries, deposition summaries, law firm bookkeeping, etc.
In conclusion, if you are fully virtual, yes – I believe all contracted staff can work. If you have a brick and mortar, I do recommend a rock star secretary/assistant.
What guidelines and processes should a law firm owner follow when seeking out to hire a contracted paralegal?
I highly recommend utilizing an already established paralegal company that takes care of the hiring process, background checks, network referrals, etc. for you. Another benefit of this is that the company will (or should) provide payment coverage (paying the contractor for you should you need a few extra weeks to cover your invoice).
However, if you choose to hunt for a contracted paralegal on your own there are a few things to really pay attention to:
Make a clear establishment of expectations in your posting. Though under a 1099 relationship they are the controller of their own schedule, I always stress to my paralegals that clients won’t stick around long if we don’t work hard to accommodate their scheduling needs. They have to be available during business hours to contact clients, the court, etc. So, make very clear what the job entails and what you will need from them on a day to day basis.
Seek candidates with a history of remote work. People think it is a no brainer to jump into virtual work. I think many have found during the pandemic that is not the case. Working virtually, communication without face to face interactions, motivation to complete assignments etc. all bring with it new challenges. I worked on a contract basis for two years before I felt confident to consider myself an expert in how to execute the work and overcome hurdles with that type of setting.
Pay attention to communication skills in the beginning. Pay attention to how quickly they reply to your emails, if they confirm they have scheduled a call with you, etc. That all will come clear to be important once you bring them on. The best contract paralegals are excellent communicators.
Check references. I think it is sometimes easy to forget about the references pieces in hiring contract workers because the whole process feels less than traditional.
Ask them about why they left their prior firm. This simple question has in the past shown me so many character flaws in an applicant. I have had paralegals begin ranting about their prior employer and completely cut them down. This is such a red flag for me that they struggled working in a team setting and have chosen to go solo for all the wrong reasons.
Ask them about their long-term goals. Because of this pandemic, you really need to weed out contractors just looking to get by until the economy picks back up. Again, contract work isn’t solely a bandaid through this pandemic. Once you get a taste of it, you won’t want to go back and it is important who you bring onto your team shares those views.
Discuss rate immediately and on the spot. Contracted companies will have set hourly rates that you won’t need to worry too much about fluctuations. Sometimes contractors that go out and market clients on their own will up their cost when they have more interest. This isn’t a bad thing, more power to them for being in the position to increase their rates and take less work, but that will inevitably happen. Then you feel in the position of needing to pay that increase similar to how you would if your employee threatened to leave without a raise, defeating the purpose. With a company that won’t happen and rate increases should remain minimal.
Conclusion
Utilizing a freelance paralegal is the solution for solo and small firms to save time, costs and ultimately increase ROI. They have the ability to expand their talent pool, experience seamless onboarding and decrease staff fragility. Firms can eliminate unproductive hours and gain access to senior level paralegals who they would not be able to afford in a traditional brick and mortar setting.
Practices that are looking for secretarial services can hire a virtual or executive assistant. There are also niche services available such as phone answering and mailing to truly become a virtual business.
Follow my guidelines when hiring a contract paralegal to make sure you find the right fit. Alternatively, you can leave the hiring process to me and you can be free to focus on the things that increase profitability.