Smart Growth: Tapping Into the Freelance Lawyer Ecosystem
Basically, there are two ways to grow the revenue in your law firm. First, you can charge more. Or, second, you can do more work.
Assuming that raising rates isn’t a weekly activity and that one’s time is finite, lawyers looking to grow their firm move pretty quickly to “hiring.” Using this model, the hiring attorney gives overflow work to an associate and keeps a piece of the associate’s revenue. This is the traditional law firm growth model but it isn’t the only way to expand capacity, and thereby add to your firm’s revenue.
You can also increase revenue by staffing matters with contract or freelance attorneys. In fact, with the rise of the “gig economy” and the power of the internet to connect professionals across significant distances, tapping into the freelance lawyer ecosystem is easier than ever.
How to Hire a Freelance Lawyer
Maybe you’ve never hired a freelance lawyer. Perhaps it seems scary or intimidating. Here are a few steps to get you started.
1. Decide What, Exactly, to Send to a Freelancer Lawyer
This may seem obvious, but the first question to ask is: “What work can or should I send to a contract resource?” Start with something small and discrete. Do you have a research project that you’ve already started and a good idea of how long it will take and what the results will look like? That could be a good candidate. Maybe you need a motion for summary judgment written — one very similar to a motion you’ve written dozens of times before. Maybe it’s a simple letter, or an internal thing — a memo or revision of your client engagement agreement. The key is to find something (but probably something “small”) that you feel comfortable letting go.
2. Find a Freelancer
It’s tough to know how many attorneys are out there providing freelance legal services, but trends suggest that freelancing among attorneys is on the rise. First, we’ve seen the emergence of the gig economy. Driven by the flexibility of remote work offered by technology and a recognition that good, steady work can be found without becoming an “employee,” more and more people of all stripes are freelancing. During the great recession, many attorneys ended up freelancing not by choice but by necessity. So, it’s fair to acknowledge that the population of freelance attorneys is growing.
So how does one tap into this market?
Many lawyers reach out to their networks: Law school classmates may have moved into freelance roles. Or, perhaps colleagues in the same or similar practice areas can point to a qualified freelancer.
Some agencies help place temporary freelance attorneys.
Sometimes freelance attorneys place ads in the local bar journal.
The internet is a great resource, whether sites like LinkedIn or Avvo, Craigslist or UpWork, or sites that specialize in connecting attorneys with freelance legal help such as Lawclerk. Many offer not only an abundance of freelancers but often ratings and reviews to help one choose the right freelancer for the job.
3. Now Figure Out How Much to Pay Them
The next big question is what to pay a freelance or contract lawyer. Unfortunately, there is no great answer. However, here are a couple of suggestions for pricing a freelance project.
Figure out a reasonable hourly rate, then estimate how long it will take for the work to be done (maybe even do some of it yourself to get started). Next, multiply the rate by the time and voila! You’ve got a basic estimate of what you might pay.
Another option is to estimate the billable value of the work and pay the associate a percentage of that value. For example, 4 hours x $250 per hour = $1,000 billable value. You would then pay the freelancer 35 to 40 percent of that. This calculation is based on the adage about where money earned by law firm associates goes: one-third to the associate, one-third to the partner and one-third to the firm overhead. Since the only relevant third here is what goes to the freelance lawyer, 30 to 40 percent seems about right.
4. Make Money
The boldness of saying simply “make money” reminds me of the underpants gnomes from “Southpark”whose startup business plan jumps far too quickly and illogically from “collect underpants” to “profit!” Of course, there are other steps between deciding to use a freelancer, finding one, paying and “profit.” You need to manage the freelance resource, set appropriate expectations, do quality control and clean up the work product before you send it to the client, and much more. But, in this quick guide, we want to ensure that we hit “make money” because “growth” is where we began. Lawyers can profit from work performed for them by freelance legal professionals. In brief, the ABA Model Rules and related ethics opinions are unified in the position that attorneys can make money using freelance attorneys. In fact, the U.S. Supreme Court has said that paralegals, law clerks and other paraprofessionals’ services may be billed at “prevailing market rates” rather than the rate actually paid to the paraprofessional. This is often surprising to lawyers, but a deep discussion of the topic is best reserved for another space. In short, just remember that you, as the hiring lawyer, can charge a prevailing market rate to your client for work performed by a freelance attorney.
Grow Your Firm, Help More Clients … Skip the Associates
Leveraging freelance and contract legal professionals can be a great way to grow revenue. And, with the internet to connect you to and even facilitate leveraging freelance attorneys, there are plenty of opportunities to use these resources. Sure, you can ratchet your rates up every year or bring more people on as full-time employees. Or, you can leverage the gig economy to find qualified, eager partners who can help you grow without those headaches.