The best way to grow a small law firm is by hiring help and delegating legal work, but many attorneys are hesitant to hire full-time associates for a myriad of good reasons.
As we discuss in our founding story, one of the biggest concerns is the long-term salary and other overhead expenses involved (i.e. benefits, equipment, continuing education fees, and so on).
That makes sense. Salary and overhead is a big commitment, especially when you consider that bringing a full-time associate into your law office is starting a professional relationship that could last for several years.
This is one of the main reasons we built LAWCLERK — small law firms can hire freelance lawyers on a per-Project or subscription basis and get the help they need, when they need it most, without long-term commitments and overhead expenses.
Lawyers who run a small solo practice or are just starting out can learn valuable lessons from other lawyers who have initially tried the traditional route of hiring full-time associates.
For example, as we discuss in a recent case study, attorney Eric Ratinoff found that the finances surrounding his team of traditional associates were actually impeding his ability to be as profitable as he could be. He pivoted to working with freelance lawyers (who were not only incredibly talented, but also had no overhead costs tied to them) and is now more profitable than ever.
In this post, we’ll discuss how you can see similar success, and why delegating legal work to freelance lawyers can help you grow your small law firm.
We’ll specifically cover:
- How hiring freelance lawyers results in higher profits for your firm.
- How limiting overhead is the key to running a profitable small law firm.
- How the legal industry produces an extremely talented pool of freelancers.
- How you can delegate all types of legal work, from simple to complex tasks.
Let’s dive in.
Hiring Freelance Attorneys Results in Higher Profits for Your Firm
Too many attorneys view outsourcing as an expense. It’s actually a revenue center, and here’s why: The ethics rules, opinions, and case law all say that an attorney can bill their clients for a freelance lawyer’s time at a reasonable market rate. The reasonable market rate is generally higher than a freelancer’s rate to do the work.
To put this into concrete terms, let’s look at the math.
Imagine your small firm is going through an exceptionally busy time and you’re juggling several different projects. You decide to hire a freelance lawyer to revise, for example, a commercial lease agreement. Given the relatively simple scope of the project, you think paying a freelancer a flat fee of $1,000 is fair. You log in to your LAWCLERK account, describe the Project and post the flat fee of $1,000, and a freelancer picks up the job.
When the freelancer completes the work and sends you the revised lease agreement for review, they also let you know they spent 8.5 hours on the Project.
Here’s where it gets interesting. You can bill your clients for the freelancer’s time at the reasonable market rate, which takes into account the freelancer’s experience in this area of law and the type of work they performed.
Let’s say the reasonable market rate would be $200 per hour, which means you’re billing the client $1,700 for 8.5 hours of work. You only paid the freelancer $1,000, so that means $700 profit goes to your firm. And if you replicate this across many projects, the profits significantly add up.
This is an example of a perfectly legal and ethical law firm management strategy.
Traditional law firms profit off their associates all the time: they’re invoicing clients more than they’re paying in salary, and they’ve been doing this for decades. And the same concept applies to hiring freelance lawyers.
Note: If you want to delve into more details on this topic, download our “Compliance with the Model Rules” PDF, our whitepaper that addresses legal and ethical issues associated with delegating legal work.
Limiting Overhead Is Essential to Managing a Profitable Small Law Firm
One of the biggest traps that attorneys can fall into as they’re striving for law firm growth is trying to do things the way big law firms have always done them.
Large, established business owners can afford to pursue aggressive growth strategies: they can rent impressive office space or purchase real estate; they can subscribe to legal software and legal services to streamline practice management; they can invest in law firm marketing and business development campaigns to reach more potential clients; and they can commit to massive expenses in salaries and benefits.
Smaller law firm owners, no matter how ambitious or talented they are, usually can’t commit to these types of strategies. We’ve talked to many lawyers who tried to play that game when they started their firms, and most of them eventually closed up shop. The stress was overwhelming, in large part because salaries and bills have to be paid every month regardless of whether the business is making money or already in the red.
We’re trying to educate lawyers about how to avoid this. As we mentioned in our founding story, we advise lawyers to focus on higher margins and lower overhead, and working with freelance lawyers is a great way to do just that.
The Legal Industry Produces an Overabundance of Talented Freelancers
Many attorneys are leery about working with a freelance lawyer because they’re concerned about whether or not they can deliver a great work product. This stems from a common misperception that lawyers who freelance can’t get a “real job”. But this is far from the truth.
There are many accomplished attorneys who intentionally choose to freelance instead of following the so-called “traditional” career path. And it could be for a variety of reasons.
For instance, the pandemic normalized working remotely, and many attorneys have decided they want a lower-stress legal career where they can continue practicing law but maintain more control over their hours and work environment.
They might want to have more time with their kids, or they might need to care for elderly family members. We also see freelancers whose spouses are in the military, making it difficult to establish a permanent law practice due to frequent moves.
On average, the freelance lawyers in the LAWCLERK network have been out of law school for 11.6 years. These are people who have a lot of real-world experience working their own cases and advocating for their own clients. They consider freelancing to be a better way to work, and we offer an efficient way for small law firms to connect and collaborate with them.
You Can Delegate All Types of Legal Work, from Simple to Complex Tasks
You’ll naturally seek out options to delegate legal work when you have tedious, time-consuming tasks that come across your desk — such as in-depth research projects, or reviewing volumes of documents that have been produced through discovery.
These are the kinds of tasks that get put-off because you either can’t find the time to complete the tasks, or you simply don’t want to do this sort of work.
Although tasks like these are absolutely perfect to outsource, you should also consider bringing in a freelance attorney when you need help with more sophisticated work.
In fact, this is a natural progression that we continually see as lawyers gain more trust in our system and our talented freelance lawyers.
For instance, if you’re trying to prepare for a big trial, and at the same time you still need to respond to motions that have been filed in other cases, it can be difficult to keep all those plates spinning without getting some help. So, when it’s crunch time, no matter the task or the practice area, you can tap into our freelance attorney network for help.
Note: We go over many more examples of sophisticated (and simpler) legal work that you can delegate to freelancers in the following article: What Kind of Legal Work Can You Outsource?
Outsourcing Legal Work Is Your Secret Weapon
Working with freelancers is a new way to grow a small law firm. But that’s exactly why the best time to try it is now: you’ll gain a competitive advantage that few other law firm owners know about.
You’ll benefit from a talented pool of lawyers who, for a variety of reasons, have opted to freelance. These freelancers range from accomplished, seasoned pros to recent law school grads, which means you can delegate a variety of tasks.
Best of all, working with freelance lawyers results in lower overhead and higher profits for your firm, and, in many cases, frees up your time to pursue other avenues for growing your business and expanding your own expertise.
Interested in Trying Out LAWCLERK?
You can choose from over 3,800 talented attorneys throughout the U.S. for your next small or large project.
Registering for an account is simple. There are no signup fees and no monthly fees. After you sign up, a dedicated LAWCLERK advisor will reach out to schedule an onboarding call. They’ll help you create the best strategy for your firm (at no cost), and share how other firms like yours are getting more work done faster and more profitably by delegating work to freelance lawyers.
We also encourage you to read our Ultimate Guide to Legal Outsourcing, which details the benefits (and best practices) of working with a freelance lawyer.