Flying Solo

LAT‘s Freelance Survey Results.

March/April 2006 Table of Contents

Throughout the years, Legal Assistant Today has published various articles about freelance paralegals and working in the freelance arena. In addition to the articles, many readers have said they would like to see a survey directly related to freelance work issues, such as billing, marketing, services offered and more. In 2005, we answered that call with an online freelance paralegal survey.

Our survey found that 80.6 percent of respondents work from their homes, and only 29.7 percent have employees or subcontractors. Almost 53 percent said they have one to five regular clients, with 68.4 percent reporting that their clients are solo practitioners or small firms.

The largest number of respondents (32.4 percent) said on average they bill 26 hours to 37 hours per week. More than 24 percent said they work 26 hours to 37 hours per week, and 24.3 percent work 51 hours or more a week. The average billing rate was split three ways at 13.5 percent for $15 to $25, $26 to $35 and $36 to $45 per hour.

The top freelance areas of specialization include: litigation (42.1 percent); personal injury, real estate and other specialty areas (each with 39.5 percent); and estate planning and family law (each with 26.3 percent). Freelance respondents offer clients a variety of services — 86.8 percent draft documents, 84.2 percent conduct legal research, 73.7 percent provide document management services, 71.1 percent conduct factual research and 57.9 percent offer trial preparation assistance.

These and more statistics can be found in the following charts. Freelance statistics related to technology will be published in the May/June 2006 issue of LAT along with the 5th Annual Technology Survey results.

Methodology: Data was compiled from 39 online responses with a margin of error of plus or minus 15.7 percent. Statistical analysis by Darrell Patton.

Persuading Attorneys to Use Freelancers

By Liz Miller

When working as an independent contractor or freelance paralegal, you often have to persuade attorneys that hiring you is a cost-effective and efficient way to get work done. This often comes down to explaining the simple mathematics involved and proving how they can save money.

Consider this: A full-time para­legal earning $40,000 actually costs the firm at least $47,000 when you calculate in sick time, vacation pay, bonuses, health insurance and the cost of hiring a temp while the paralegal is on vacation — not to mention the overhead costs of a computer, desk and workspace.

An independent or freelance paralegal who charges $25 per hour actually will save the firm money, even though at 40 hours per week and a 52-week work year, the salary comes out to $52,000. Where are the savings? An independent paralegal whose time is billable to the client at $80 per hour or more isn’t getting paid unless he or she is generating billable hours. If the paralegal isn’t working, he or she isn’t costing the firm any money.

Add into that equation that the firm doesn’t pay a freelance paralegal’s benefits, and the firm actually comes out ahead. For example, if I bill 20 hours a week as a freelancer on a case at $25 per hour, the firm owes me $500. The firm then bills the client $80 an hour (sometimes more) for the time that I just billed, or a total of $1,600 for the week. This generates positive cash flow revenues for the firm of $1,100 a week. Using just those figures (for some firms I have billed 40 hours a week or more at times), the firm actually could generate additional cash flow of $57,200 per year on my 20 hours per week billable time after paying for my services.

If a firm works on a contingency fee basis, using an independent para­legal still can be profitable if the paralegal’s fees are not chargeable to the client at the time of the settlement. If a firm gets backlogged with paperwork due to staffing problems or just an overflow of work, the firm loses money with cases that need to move forward but have not because no one has time to work on them. A freelance paralegal can step in and help in this situation. For example, a paralegal specializing in personal injury can prepare a settlement demand package complete with copies ready to go out the door for $150 plus costs. This is a small investment for a firm to get a case that is ripe for settlement into the hands of an adjuster, and certainly is more profitable for the firm than waiting another six months.

Using a freelance or contract paralegal is a win-win situation, allowing the firm to save money and move cases along quickly. When cases move forward expeditiously, clients will be happier and likely will come back for more services and also send client referrals in the future.