Tuesday, March 17, 2009

Are Paralegals Key to Law Firm Survival in Economic Downturn?

Today's issue of Law.com features an article from the Fulton County Daily Report by Michael Tierney titled 'Billable Rates Now Under Siege Due to Recession.'

To quote Mr. Tierney, "Most firms are hearing, loud and clear, from clients seeking a little billable-hour love during these harsh economic times. For two decades, substantial rate boosts were an annual rite, placing clients in a grin-and-bear-it posture. No longer. Industry observers say clients are requesting -- even demanding -- by letter, fax, e-mail or Ma Bell a smaller tab to smooth their ride through the recession."

Chuck Trense, president and CEO of the Atlanta attorney recruiting and placement firm Trense Group, offers this information, "Billable rate [issues] are an oversimplification of what's going on. Clients are looking for value. At the end of the day, they don't care abut the hourly rate. They are concerned about the total cost to get the job done -- and the quality."

NOW COMES THE BEST PART: THE ROLE OF THE PARALEGAL IN THE BILLABLE RATE STRUCTURE.

Tierney suggests that "One foreseeable cost-saving trend is pushing some duties down the ladder from senior-level associate to a less experienced one. Or, from the less experienced to a paralegal. The firms avoid an actual rate reduction but wind up charging less at the end.

Right on, Mr. Tierney!

An experienced, properly utilized paralegal will provide longevity of profits. Work delegated to a paralegal is limited only by the skills and qualifications as well as the attorney's Rules of Professional Conduct. In most circumstances, an attorney will be able to bill the time of an experienced paralegal at a rate that will generate additional revenue for the firm at a lower cost to the client.

There are many tasks a paralegal can perform that may take the paralegal the same amount of time as the lawyer. However, with the paralegal's lower hourly rate, the resulting lower fee to the client will surely have an impact during a recession. For instance, if an attorney charges $200 per hour and that attorney spends three hours interviewing two witnesses, the cost to the client will be $600. The same task can be performed by a paralegal at a rate of $90 per hour, resulting in cost of $270 to the client. Which do you think the client would prefer?

Paralegals also provide continuity for the firm. Associates frequently move from one practice area to another or move on to another firm, or become partners where they develop their own client base. Paralegals often work with one group of partners and the same clients for a long period of time. The clients develop a high degree of familiarity with the paralegal and also a high degree of confidence. In this way, paralegals strengthen client relationships.

The economic downturn is on the minds of everyone in the legal profession. Firms should take a long hard look at the benefits of retaining paralegals on their staffs. Clients' demands for lower fees and high quality work will be met by the effective utilization of paralegals. Law firms can only benefit from moving in this direction.

© 2009 Vicki Voisin, Inc. Do you want to use this article in your newsletter, ezine or Web site? You can, so long as you include this entire blurb with it: Vicki Voisin, "The Paralegal Mentor", delivers simple strategies for paralegals and other professionals to create success and satisfaction by achieving goals and determining the direction they will take their careers. Vicki spotlights resources, organizational tips, ethics issues, and other areas of continuing education to help paralegals and others reach their full potential. She publishes a bi-weekly ezine titled Strategies for Paralegals Seeking Excellence. More information is available at www.paralegalmentor.com

3 comments:

Lynne DeVenny said...

Great argument about the benefits of retaining paralegals! From personal experience, we have long term clients who prefer to speak to a paralegal versus an attorney, even in contingency cases, where the client does not pay anything up front.

Jeannie said...

Vicki - Could we reprint this in our eNewsletter? Much thanks in advance for your consideration.

Paralegal Mentor said...

Jeannie...I'd be honored if you re-printed this. Please contact me for the language that should follow it. Thanks a bunch! Vicki