We all have the same 24 hours in the day.  Making the most of those 24 hours to work, see friends/family, do all of the things and maybe even sleep a little bit can be a challenge for most attorneys.

One of the best strategies to grow your firm and profits doesn’t involve more of your time.  It actually involves less of your time by learning how to leverage the time of other lawyers.

The Old Rule of Thirds

Traditionally, law firms grew by hiring full-time associates whose revenue from their billings were traditionally divided 1/3 to pay the associate, 1/3 to cover their overhead expenses, and 1/3 for the firm’s profit.  This means that if you bill your associate’s time at $225 per hour, $75 of that $225 should be allocated for their pay, $75 should be allocated for overhead, and $75 should be realized as your firm’s profit.

But this only works if your associate is busy full time and if you collect all of their billed time, which is rarely the case.  When your associate is not busy full time and when you collect less than 100% of their billed time, the 1/3 that is supposed to be your profit ends up being consumed to pay the associate’s salary and benefits.

The good news is that here is a better way to power your law firm!  By using freelance lawyers aka remote associates, you can leverage the time of other attorneys without the overhead, commitment, and lost profits of full time employees.

Outsourcing Lowers Overhead, Increases Profits

You can work with remote associates in a freelance capacity in a number of ways.  First off, you can delegate work to a remote associate on a project by project basis.  This is often done on a flat-fee basis for each project.  Alternatively, you can work with a remote associate in an on-going relationship via our  subscription program for a set number of hours per month such as 30, 40, or 50 hours of help each month.

Using the same metrics outlined above, if you pay your remote associate $75 per hour and you bill your client $225 per hour for their services, your profit will be $150 per hour because you do not have to worry about paying overhead like salary and benefits when they are not working.    You are only paying for the help you need, when you need it, without paying for downtime.

In Formal Opinion 00-420, the ABA Committee on Ethics and Professional Responsibility explained that attorneys may bill the services of contract lawyers to their clients at prevailing market rates (verses the rate paid to the contract lawyer) as long as the overall hourly rates satisfy Model Rule 1.5(a)’s reasonableness requirement.  This is consistent with the Supreme Court’s decisions in Missouri v. Jenkins, 491 U.S. 274 (1989) and Richlin v. Chertoff, 553 U.S. 571, 570 (2008) which held that you can upcharge the services of paraprofessionals such as freelance lawyers.

Delegation Drives Profit

Let’s look at an example to illustrate what this can mean in time and dollars is you delegate via LAWCLERK’s virtual associate subscription program.  Let’s suppose that you hire a talented remote associate to help you 40 hours a month and you’ll pay $100 per hour.

Your remote associate will work those 40 billable hours (and maybe more) and give you a time report that you can bill to your client at a reasonable market rate.  Let’s say you determine the reasonable market rate for this remote associate is $275 per hour.  If you bill all 40 hours this means you would be billing the client $11,000 for all that extra work your remote associate completed.  Keeping in mind that you paid $4,000 to get that work done this means your firm’s monthly profit grew by $7,000 in just one month!

Now if you keep working with your remote associate via the subscription program over the course of an entire year, you will bring at least an additional $84,000 of profit to your law firm with no added overhead.  This is a major win financially but also in terms of the significant workload that the freelancer can help you complete.  Now this is a win-win!

This can also result in an improved client experience for a number of reasons. First, the savings in overhead costs by working with remote attorneys can be passed on to the client in the form of lower hourly rates. This will make you more competitive when you are meetings with new clients and trying to earn their business. You can often work with more experienced attorneys when you outsource to remote associates. Their experience and expertise can drive powerful results for your clients leading to many referrals and a steady stream of new clients. This form of business development – excellent work – can spur much faster growth for your small law firm than other marketing channels like social media and SEO.

Tap into Incredible Talent

More and more experienced lawyers are looking for remote attorney jobs following the legal industry’s shift to remote work during the pandemic.

According to a Thomson Reuters survey taken earlier this year, less than 10% of lawyers want to go back to working five days a week in the bricks and mortar law office. Many lawyers have discovered they can be just as productive (if not more) with remote working arrangements than they were in the office.

Firm owners who embrace communication tools like Zoom, Slack, dropbox, case management software and of course regular phone calls can build a productive and powerful work environment. Law firm owners really are entrepreneurs and should treat their firm like the business it is. Law practice management needs to incorporate workflow automation, steamlined client intake, easy onboarding and digital invoicing/electronic payments. The firm culture of innovative small law firms who have adapted more quickly than traditional law firms is very appealing to young, talented lawyers.

The bottom line is that attorneys are looking for improved work-life balance, and firms that offer flexible, remote working options have a competitive advantage when it comes to recruiting top talent.  And as we’ve previously written, the firms who have embraced remote lawyer jobs over the past few years have seen greater profitability.

Modern Law Firm Success

All of this means that you can grow your practice and profits by leveraging the time of remote associates without the debilitating overhead of full-time employees and physical office space.

This ability to create a virtual law-firm of on-demand remote associates to improve your firm’s profits is no longer reserved for big law.  With new technology and outsourcing platforms, you can easily work with talented freelancers in your state and across the country to build your team of remote, on-demand associates.

Kristin Tyler, Co-Founder Lawclerk

Kristin Tyler, Co-Founder Lawclerk


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