Although the roles and responsibilities of paralegals or legal assistants can differ widely by firm, these employees ideally should spend minimal time performing clerical or other work suited to legal secretaries and administrative staff. By the same token, paralegals should not do work that is best handled by lawyers. This article explains why this matters and how it can affect a law firm's profitability.

Just about every law firm employs paralegal staff. But are you using them too much or too little? Are they overpaid administrative staff or underpaid legal staff? By finding the right balance, both you and your paralegals will benefit.

Defining the Job

The National Association of Legal Assistants states that paralegals "have knowledge and expertise regarding the legal system and substantive and procedural law which qualify them to do work of a legal nature under the supervision of an attorney." According to the American Bar Association, approximately 85% of paralegals spend some time performing clerical work on a weekly basis, and almost all of them (95%) regularly communicate directly with clients via email and written letters. And, while drafting basic court filings and contracts is a traditional paralegal duty, paralegals increasingly manage their firms' technology applications and engage in marketing and business development activities.

Although the roles and responsibilities of paralegals or legal assistants can differ widely by firm, these employees ideally should spend minimal time performing clerical or other work suited to legal secretaries and administrative staff. By the same token, paralegals should not do work that is best handled by lawyers.  As a reminder: Although paralegals can perform many substantive legal tasks, they must be careful not to overstep their bounds. Only attorneys can provide legal advice to clients, represent them in court, plan legal strategies, take depositions, set fees or accept engagements.

How your firm uses paralegals may depend on the type of individuals that you hire.  Although some firms require paralegals to have formal legal assistant education or certification, others hire college graduates with little or no previous experience and train them on the job. Some of these recent graduates are considering law school themselves.

Comparing Revenue and Costs

Consider performing a profitability analysis that allocates expenses, such as salary and benefits, to partners, associates and paralegals. Then, calculate revenues for each of these groups. When you compare revenues with costs, incorporating such factors as utilization and realization, you may be surprised to find that paralegals are your firm's profit center. Setting paralegals' billing rates based on experience often means that senior paralegals offer the best profit margins.

Although paralegals can be profitable if your firm charges hourly rates, the greatest financial potential of paralegal work typically comes in fixed and contingency cases. By enlarging paralegals' roles in such engagements, you reduce your firm's investment in them and free up associates to work on other matters.

Retaining the Best

Because senior paralegals often are the most profitable staff members, look for ways to retain them. Ways to do this include:

  • Providing career path and professional development opportunities, such as continuing education and management roles,
  • Treating paralegals as knowledgeable team members by allowing them to contribute to practice group decisions and participate in client meetings, and
  • Providing a mechanism for paralegals to provide feedback or voice concerns about the attorneys with whom they work and how cases are managed.

Consider designating a paralegal coordinator, such as a senior paralegal or partner who understands the value that paralegals bring to the firm and its clients. The coordinator can be responsible for hiring and training and for optimizing paralegal resources, by, for example, making sure that individuals are assigned to matters that make the best use of their experience and skills.

Improving Profitability

Appropriate assignments make for improved workflows and fulfilled staff.  Your bottom line improves when attorneys are not doing work that your paralegals can handle. It may be time to review your paralegal assignments to improve your profitability.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.