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,grew by hiring 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 busyand if you collect all of their billed time, which is rarely the case. When your associate is not busy 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 you! By using freelance lawyers aka remote associates, you can have the benefits of leveraging the time of other attorneys without the overhead, commitment, and lost profits of 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, theCommittee 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(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 yourwith 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 improvedfor a number of reasons. First, the savings in 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 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 . This form of – excellent work – can spur much faster growth for your than other marketing channels like and .
Tap into Incredible Talent
More and more experienced lawyers are looking for remote attorney jobs following the’s shift to during the .
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 . Many lawyers have discovered they can be just as productive (if not more) with arrangements than they were in the office.
who embrace like , , , and of course regular can build a productive and powerful . really are and should treat their firm like the business it is. needs to incorporate , steamlined , easy and digital /electronic payments. The of innovative who have adapted more quickly than is very appealing to young, talented lawyers.
The bottom line is that attorneys are looking for improved embraced remote lawyer jobs over the past few years have seen greater profitability., and firms that offer flexible, options have a competitive advantage when it comes to recruiting top talent. And as we’ve previously written, the firms who have
All of this means that you can grow your practice and profits by leveraging the time of remote associates without the debilitating overhead ofemployees and physical .
This ability to create aof on-demand remote associates to improve your firm’s profits is no longer reserved for . 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.