Hiring a full time associate is the most significant staffing expense for small law firms, and a lot can go wrong. Specifically, there are two big things:
Paying full time associates even when it’s slow, thus hurting profit margins.
First, there are fixed overhead costs directly tied to each full time employee: salary, benefits, state bar dues, continuing education fees, equipment, and so on.
While paying associates doesn’t seem problematic when things are busy, law firms also have to cover those overhead expenses when work is slow.
As a result, I hear from so many lawyers across the country that they haven’t been able to pay themselves as much as they pay their associates. This is a fundamental issue that we discuss how to solve throughout the article.
Second, there’s constant turnover, and the following situation happens all too often:
You hire an associate that stays with you for a few years. You invest your dollars, time, and knowledge to train them. And then they leave the firm...
to work for one of your competitors who is offering a higher salary.
to start their own firm and become your direct competitor, with all the knowledge you’ve given them.
for a variety of other reasons — all of which leave you in a lurch to juggle the remaining workload.
I’ve talked to so many lawyers who have gone through the cycle of (1) hiring someone, (2) training them, and (3) they leave. Those hiring attorneys get burnt out from the constant turnover, and they often get to the point of never wanting to train someone else to do what they do again.
In addition, during COVID-19, the two problems we’ve mentioned have become exacerbated, making solving them even more important. Some law firms have less business but still have to cover the fixed overhead costs directly tied to each full time associate.
In response, many firms are downsizing and running leaner operations with fewer associates. The problem is that there’s only so much time in the day to do the substantive legal work that’s required of you. You can’t do it all alone and you still need some staffing. But it has to be flexible and less expensive.
Because of this, demand for freelance lawyers (aka virtual associates) has risen, and utilizing them makes economic sense — now more than ever — for a number of reasons.
Hiring freelance attorneys can avoid paying the high overhead costs directly tied to full time associates.
With a virtual, on-demand freelancer, you are only going to pay them when you are actually hiring them to do work. This is a great way for lawyers to scale up or down as their practice may ebb and flow.
With a freelance lawyer, you can tap into their years of experience, which avoids the problem of needing to train junior associates.
Along with tapping into their years of experience, you can often find freelance lawyers with niche specialty knowledge in specific areas of law.
In this post, we will expand on these points (and others) and detail the why and the how behind effectively using freelance lawyers as part of your law firm staffing strategy, and gaining an edge on your competitors who don’t.
Let’s dive in.
With a full time hire, you may only be able to afford hiring a first or second year associate, and you’d need to teach them how to do their job. But with a freelance lawyer, you can often hire someone with ten or more years of experience and spend little to no time training them. So they can get up and running quickly on any work you assign them.
This is because, as we discuss in our founding story, the legal profession uniquely produces extremely experienced, specialized, and talented people for whom it does not make sense to take a job at a big firm, which can be highly stressful and give little to no work-life balance. This includes lawyers who choose to start a family, law professors, retired or near-retirement attorneys, and many more highly skilled, very experienced attorneys who have hours available for freelance legal work. Again, these attorneys are significantly more experienced and qualified than the typical fresh-out-of-law-school associate.
To add to that, there are inevitably times when you face certain issues that aren’t your core area of practice, and with our marketplace, you can find a freelance lawyer that has the subject matter expertise to come in and help consult/work on that case with you. You’re not going to find a magic associate, two years out of law school, who happens to have a deep knowledge in five or six areas of law, but working with freelance lawyers, you can easily find five or six different attorneys that each have deep expertise in different issues and different types of law to get that help when you need it.
Let’s look at an example of this.
One of the firms that uses our platform, LAWCLERK, is run by an incredible attorney in his 70’s who has been practicing for almost 40 years. He and his team are nationally renowned, and they do criminal defense, constitutional rights, and first amendment work. Despite the fact they've all practiced for decades, they had a really unique issue related to a writ they were preparing for the US Supreme Court about stare decisis (if you haven’t encountered this term since law school it’s a nuanced evidentiary issue in the realm of constitutional law).
First of all, it’s almost impossible to solve this staffing problem with associates, and hiring an experienced lawyer that has this required expertise is incredibly expensive (and would be totally overkill for this one specific use case).
So, they wanted to see if they could find a freelance lawyer through our marketplace who had deep knowledge on this issue of stare decisis. Sure enough, when they posted the project on LAWCLERK, they found a freelance attorney who had written on this exact issue of stare decisis for a couple of different law review articles. He was as close to an expert on this as you could find.
While the writ addressed multiple issues, they collaborated for just that one portion of the writ, and the freelance lawyer knocked it out of the park. He had totally different strategies that they hadn't considered, even with their own deep knowledge, and it really boosted their client’s arguments.
As you can see, even with this extreme example of a national expert, there are always going to be issues outside your core expertise. And being able to tap into a freelance lawyer’s years of experience and niche specialty knowledge in specific areas of law can be a huge benefit for you and your clients.
The second benefit is arguably the most significant one of the bunch and is especially a game changer for small law firms (as we discuss in our founding story).
Let’s look at an example of how you can leverage the talent of freelance lawyers and bring additional revenue into your firm.
Say you hire a freelance lawyer to draft a motion for summary judgment and you agree to pay them a flat fee of $1,200 for this work.
They report that they worked on it for 8 hours. So you effectively pay $150 an hour.
You determine that the reasonable market rate for an attorney with the freelancer’s level of experience and expertise is $250 an hour.
This can be billed to the client at a reasonable market rate of $2,000 which results in a profit of $800 for the firm (40% profit margin).
(Note: for more info on what a “reasonable market rate” means, see this post).
Now this is just one project. Imagine if you delegated other legal tasks such as discovery twice a week for an entire year — not only would you bring more dollars into your practice, but you’d cut yourself out of hours of work. This frees you up to spend more time with clients in court, generate new work, and other high value activities.
And unlike full-time associates, you don’t have to pay a freelance lawyer’s benefits, insurance, bar dues, and an actual office for them to sit in. All of those things go away and there’s no overhead.
In fact, I spoke with one of our users recently, and he told me a story that ties into this. This attorney works and lives in the DC metro area, and after hearing about us, he let go of his associate and now does a lot of work with a handful of freelance lawyers. One of the freelance lawyers on his team lives in Florida and is a stay at home mom. She’s a ten year attorney who burned out from a job at big law. And he primarily hires her as needed to do a deep dive into his cases and review the pleadings to come up with a plan for discovery. Not only does he no longer have to pay a fixed full time salary plus overhead for his former associate, but he rented out that former associate’s office to a different local attorney, and that’s another revenue stream.
Law firms tend to ebb and flow in terms of work. You’re busy, then it’s slow, and then you're busy again and the cycle repeats itself. By hiring freelance lawyers, you can achieve flexible staffing for your cases and get the help you need, when you need it most, without driving up overhead (as opposed to traditional, full time associates that aren’t always utilized but still have fixed overhead costs directly tied to them, which creates a broken business model).
For example, from December to March, many immigration lawyers are busier than usual working on H-1B Visa applications for their high end clients. The immigration lawyers need assistance with the increased volume of work, but they only need it for that 4 months out of the year. So they turn to our marketplace and get extra help for their team, who may be short-handed.
Another great example of achieving flexible staffing for your cases is the last couple of weeks leading up to a trial, which requires a lot of work. You’re getting jury instructions ready. Writing and responding to motions in limine. Preparing for voir dire. Making sure all of your binders are ready with exhibits and evidence. Prepping your opening statement. And the list goes on — it just never ends.
So as you’re gearing up for trial, and you only need help for those last couple of weeks, the freelance lawyers on our marketplace can help out on demand. You can find qualified legal help at any skill level for any project, and get assistance with preparing memos, agreements, pleadings, written discovery, and other types of work.
From our talks with users, an increasing number of clients have started requesting a flat fee, since they don’t want the uncertainty of, “How many hours are you going to bill me?”. They may have a very specific budget and don’t want to be caught off guard with an unexpected bill.
So lawyers who move away from the billable hour toward flat fee billing gain a marketing advantage, and our marketplace is geared for facilitating that, because every single project is on a flat fee price set by the hiring attorney.
So if you've negotiated to do a certain piece of work for a client for $5,000, you're carving a portion out of that to delegate to a freelance lawyer. And you can estimate how much you should be paying the freelance lawyer in relation to the overall fee and your time interacting with the client (for more info on how much you should pay freelance lawyers, check out this post).
Morris, a law firm partner who uses our marketplace as part of his staffing strategy, recently met with a client who had five other lawyers turn him down previously, because they thought he didn’t have a winning case.
However, Morris had a hunch that there might be an angle in the case. At the same time, he didn’t want to spend his own valuable time researching it.
So he had that client pay him an initial flat fee for a limited engagement to explore the case. Morris took a portion of the flat fee and hired a freelance lawyer on our marketplace to research the issue and prepare a memo.
It just so happened that the freelance lawyer found a new case which had come out within the last two months that none of those other lawyers had found, which overturned previously unfavorable case law. So Morris signed on this client, and within two months, they had a very favorable settlement on the case.
Without hiring a freelance lawyer to explore the case, Morris would have likely turned down the client (and lost out on profit) just like the other five attorneys.
Last but certainly not least, by using freelance lawyers, you can bring in extra help when you need it without the overhead of a full-time associate, thereby giving you more time with your friends, family, and hobbies.
While the word “balance” is thrown around in the legal industry, in reality, it’s almost impossible for lawyers to achieve, because things are always going to go back and forth.
There are going to be times that your work life is more demanding and requires more of your energy and focus. And there are going to be times that you need to pay more attention to your personal life. So having the ability to tap into the time and talent of freelance lawyers when you need them — whether you’re overextended at work or just want to take a vacation with your family — is a great solution to achieve work-life wellbeing.
At LAWCLERK, we have the largest network of experienced freelance lawyers in almost every area of law.
To learn more, check out our FAQ page, or visit the attorney resources section on our site. In addition, you can find customer success stories and tutorials on how to utilize LAWCLERK most effectively on our YouTube channel.
Finally, here’s a quick video that shows how to post your first project on our marketplace: