The business & ethics of freelance lawyers
Freelance lawyers help firms of every size take on more work, price it profitably, and serve more clients. This reference explains how that works and why the arrangement is fully compliant with the Model Rules of Professional Conduct.
It is fitting to remember that those firms that are most likely to survive and prosper in the new market environment are not necessarily the oldest or the strongest or the smartest, but rather those most able to adapt to the changes around them.1
Section 1
Adapt and thrive by using freelance lawyers
Industry commentators have warned for years about a changing legal market: fewer billable hours, downward pressure on rates2, and a growing focus on quality of life.3 For solo practitioners and small firms, outsourcing legal work to freelance lawyers is one of the most practical responses to those pressures.
Leverage your time
Add attorney capacity and subject-matter expertise on demand, without the expense of a full-time employee.
Staff flexibly
Handle the natural fluctuations of a practice without carrying overhead through the slow periods.
Move beyond the billable hour
Predictable flat-fee project costs make it easier to offer the flat-fee arrangements clients increasingly ask for.
Section 2
Growing your business and profits with freelance lawyers
Two problems come up again and again. First, associates are expensive to train and often leave for another firm once they are up to speed. Second, the fear of an inconsistent workflow makes it hard to justify hiring at all. Engaging freelance lawyers on a project basis solves both: you get subject-matter expertise at an agreed flat rate, only when you need it.
Because you set a flat fee for the work and bill your client for the legal services delivered, each project can carry a healthy margin. A few representative examples:
| Project | Flat fee | Billed to client | Attorney profit |
|---|---|---|---|
| Research memorandum | $1,250 | 10.3 hrs @ $185/hr | $656 |
| Motion in limine | $500 | 7.9 hrs @ $185/hr | $962 |
| First request for documents | $400 | 6.25 hrs @ $185/hr | $756 |
| Residential lease | $250 | $750 flat fee | $500 |
| Will & powers of attorney | $200 | $600 flat fee | $400 |
Illustrative only. Actual fees, rates, and margins vary by matter, market, and engagement.
Section 3
Examples of how to improve your practice
Cultivate a team of freelancers
Attorneys who once cycled through associates build a bench of ten or more freelance lawyers specialized in their practice areas, an effective team without the expense of full-time employees, with case communication streamlined through a secured document library.
Take more cases and widen access to justice
Charge a $500 consultation, post a $300 research memorandum, and turn a 45-minute meeting into a $200 profit, while the client walks away with substantive legal advice they could not otherwise afford.
Improve your discovery processes
Post a formal review and objection to a client's interrogatory answers for a flat $250, or run large document reviews, from a few thousand to well over 100,000 pages, for summaries and identification of the key documents.
Make appeals more affordable
Knowing the cost of an appeal in advance lets you accept meritorious appeals without risking your margin, and improves your clients' access to justice.
Section 4
Is outsourcing to freelance lawyers ethically compliant?
The answer is unequivocally yes. LAWCLERK is built to comply with every state's ethical rules; a full 50-state survey is available in our UPL Ethics Whitepaper. On the platform, a freelance lawyer works in a paraprofessional capacity for the hiring attorney, who remains solely responsible for the client relationship and the work product.
The prohibition on the unauthorized practice of law exists to protect the public from unqualified service providers. Two Model Rules govern this arrangement:
Model Rules 5.3 and 5.5
Model Rule 5.3 addresses a lawyer's responsibilities regarding nonlawyer assistance, ensuring that a nonlawyer's conduct is compatible with the lawyer's professional obligations through supervision. Model Rule 5.5 prohibits practicing law in violation of a jurisdiction's regulations, or assisting another in doing so.
What the hiring attorney agrees to
Every hiring attorney executes an agreement that, among other things, requires them to:
Retain sole professional responsibility for the work product
Supervise the freelance lawyer's performance and ensure Rules compliance
Establish and maintain the client relationship
Allow no freelance-lawyer contact with the client, opposing counsel, witnesses, or the court
Control all dissemination of the work product; the freelance lawyer signs and files nothing
Obtain client consent where required and solely determine the client's fees
Process all payments through www.lawclerk.legal
What the platform requires
LAWCLERK, in turn, requires a non-contingent flat fee set by the attorney; every freelance lawyer to hold a JD from an ABA-accredited school or be barred and in good standing; services offered to attorneys only; per-project conflict checks and a state-rules affirmation; and a confidentiality agreement. Disbarred or suspended lawyers are excluded.
One state-specific exception
Because of Indiana's unique paraprofessional guidelines, Indiana attorneys are not permitted to use the platform.
Section 5
LAWCLERK complies with Model Rules 5.3 and 5.5
Model Rule 5.3 requires a lawyer to make reasonable efforts to ensure a nonlawyer's conduct is compatible with the lawyer's professional obligations. LAWCLERK's protective measures do exactly that: they preclude contact with the client, opposing counsel, witnesses, and parties; require conflict checks; mandate acknowledgment of the applicable state rules; require a supervision agreement; and establish the attorney's responsibility for the work product.
In practice, LAWCLERK is more restrictive than the guidelines governing an in-house paralegal or law clerk. By prohibiting any contact with the client, opposing counsel, or witnesses, it provides even greater protection for the public.
Section 6
Organizational guidelines for paraprofessionals
American Jurisprudence
The same authority is clear that a law clerk who takes on activities requiring legal knowledge, such as probate, title examination, or preparing wills, leases, or contracts, without supervision, does engage in the unauthorized practice of law. Supervision is the line.
NALA (National Association of Legal Assistants)
Under NALA's Code and Guidelines, a paralegal may perform any properly delegated and supervised task for which the attorney maintains responsibility. The attorney, not the paralegal, forms and maintains the client relationship. A paralegal may not practice law, establish an attorney-client relationship, set fees, give legal opinions or advice, or represent clients before courts or agencies unless authorized to do so, and may never assist an attorney in violating the rules of professional ethics.18
ABA Guidelines for the Utilization of Legal Assistant Services
The ABA guidelines identify three responsibilities a lawyer may never delegate: establishing the lawyer-client relationship, setting the fee, and rendering a legal opinion to the client.24 Factual and legal research and the preparation of legal documents, with appropriate supervision, are all delegable, and are exactly the kind of work LAWCLERK is built for.
Section 7
Yes, you can bill freelance lawyers at prevailing market rates
Missouri v. Jenkins (1989)
The U.S. Supreme Court held that paralegal and paraprofessional services may be billed at prevailing market rates rather than actual cost, and that a margin above cost is acceptable, so long as the rates are consistent with market rates and practices. There is no more of a windfall in billing a paralegal at market rate than in billing an associate that way.28
Richlin v. Chertoff (2008)
Interpreting the Equal Access to Justice Act, the Court again held that paralegal fees are recoverable at market rates. Reasonable cost is measured by what the client is charged, the prevailing market rate, not by the provider's own cost, just as you cannot judge the reasonable cost of an engineering report from the engineer's salary.30
Model Rule 1.5
Rule 1.5 lists the familiar reasonableness factors, the time and labor required, the fee customarily charged locally, the amount involved and results obtained, the experience and ability of the lawyer, and whether the fee is fixed or contingent, and requires that the basis of the fee be communicated to the client, preferably in writing, before or within a reasonable time of starting the representation.
The ABA formal opinions
Finally, a trio of ABA Standing Committee opinions confirms the point directly. On adequate compensation:
And on billing a contract lawyer's work to the client:
Opinion 08-451 affirms the same approach for outsourced legal work: contract-lawyer time may be billed at prevailing market rates the way associate time is, subject only to the overarching Rule 1.5 reasonableness requirement.35
Legal services vs. pass-through expense
The one caveat: if the freelance lawyer's cost is passed through to the client as a disbursement rather than billed as legal services, only the actual cost plus a reasonable overhead allocation may be charged, absent a specific agreement with the client.
Visit us at www.lawclerk.legal to learn more or contact us at support@lawclerk.legal and one of our LAWCLERK Care Team Members will happily answer any questions, help you sign-up, or post a project.
References
Citations
- Georgetown Law Center for the Study of the Legal Profession and Thomson Reuters, 2017 Report on the State of the Legal Market (Jan. 12, 2017), p. 17, available at legalsolutions.thomsonreuters.com.
- Georgetown Law Center for the Study of the Legal Profession and Thomson Reuters, 2018 Report on the State of the Legal Market (Jan. 10, 2018), p. 18, available at legalexecutiveinstitute.com.
- Id. at p. 10.
- Thomas S. Clay and Eric A. Seeger, 2017 Law Firms in Transition, an Altman Weil Flash Survey (May 2017), available at altmanweil.com/LFiT2017.
- Id. at p. iii.
- Id. at p. 33.
- Id. at 34.
- Id. at p. 26.
- Id. at p. 57.
- See Model Rules Comment 5.5(2).
- See id.
- The date of adoption can be found at americanbar.org.
- The American Bar Association's (the "ABA") comparison of Model Rule 5.3 to each state's adopted form of Model Rule 5.3 as of September 15, 2016 can be found here. The ABA's comparison of Model Rule 5.5 to each state's form of Model Rule 5.5 as of September 15, 2016 can be found here.
- See Model Rules Comment 5.5(2).
- See Model Rules Comment 5.3(3).
- See ABA Model Guidelines for the Utilization of Paralegal Services, n. 3, available at americanbar.org.
- 7 Am. Jur. 2d Attorneys at Law § 130 (emphasis added).
- NALA Code, available at nala.org/codeofethics; see also NALA Guidelines, available at nala.org/modelstandards.
- NALA Guideline No. 2; NALA Code Canon 2.
- See NALA Code Canons 2 and 3; NALA Guidelines 2 and 3.
- See NALA Code Canon 4; see also 122 Am. Jur. Proof of Facts 3d § 279.
- See ABA Guidelines, at Preamble and n. 1, available at americanbar.org.
- See id. at Guideline No. 2 (emphasis added).
- See id. at Guideline No. 3.
- See id. at Comment to Guideline No. 2.
- See Missouri v. Jenkins, 491 U.S. 274 (1989).
- See Richlin v. Chertoff, 553 U.S. 571, 570 (2008); see also Missouri v. Jenkins, 491 U.S. 274 (1989).
- See Missouri, 491 U.S. at 287.
- Id.
- Richlin v. Chertoff, 553 U.S. 571 (2008).
- See id. at 579.
- See id. at 579-580.
- ABA Comm. on Ethics and Prof'l Responsibility Formal Op. 93-379 (Dec. 6, 1993) (Billing for Professional Fees, Disbursements and Other Expenses).
- ABA Comm. on Ethics and Prof'l Responsibility Formal Op. 00-420 (Nov. 29, 2000) (Surcharge to Client for Use of a Contract Lawyer).
- ABA Comm. on Ethics and Prof'l Responsibility Formal Op. 08-451 (Aug. 5, 2008) (Lawyer's Obligations When Outsourcing Legal and Nonlegal Support Services).
LAWCLERK is an online marketplace. LAWCLERK is not a law firm and does not provide legal services. This page is provided for general informational purposes and is not legal advice; consult the rules of your own jurisdiction.