Virtual paralegals can be a profit center for your law practice by allowing you to bill out your paralegal’s time at a profit while freeing up attorney time that can be billed at a higher rate.
First things first: Can you bill a virtual paralegal’s time to your client? If the paralegal is doing work that would otherwise be completed by an attorney, the answer is typically, “Yes.” Jean v. Nelson, 863 F. 2d 759, 778 (11th Cir. 1988). Courts have awarded costs for paralegal fees, including instances in which the paralegals were contractors, not employees, of the firm. Sandoval v. Apfel, 86 F. Supp. 2d 601, 611 (N.D. Tex. 2000) (awarding contract paralegal fees); see also In re Enron Corp. Securities, 586 F. Supp. 2d 732, 783-84 (S.D. Tex. 2008) (finding that paralegal fees could be billed at a rate higher than cost and awarding contract attorney fees).
Much of the work that attorneys perform, while legal in nature, is routine, and can be completed using forms, templates, or automations in applications like Clio. The right virtual paralegal will have experience in the attorney’s practice area and can assist in generating these legal documents.
This delegation benefits your practice and the client. It benefits your practice because it allows you to manage a higher volume of clients. Instead of handling every aspect of a client’s case, you can service more clients and focus on the work that requires the legal judgment for which your clients are paying. You also continue to earn fees on the time worked by your paralegal, by billing out your paralegal at higher rates than the cost to you. Finally, the client benefits from lower overall costs because they pay a paralegal rate for some tasks, rather than the full attorney rate.
When charging clients for paralegal rates, you should keep the going paralegal rates in mind. For reference, NALA conducts a utilization and compensation survey every two years with this information. As of 2016, these rates averaged around $100 – $150/hour, which is 2 – 4 times the current cost of hiring a virtual paralegal. In a remote working relationship, the law firm does not have to provide the costs of office space, equipment, or other overhead that a law firm would otherwise need to incur.
Retaining a virtual paralegal should be a key consideration as you seek to grow your practice. Virtual paralegals are not just a way to save time, but a way to serve more clients and generate profits.
Note: This blog does not constitute legal advice. Attorneys should review relevant case law regarding appropriate billing in their jurisdiction.