The Economics of Freelance Lawyering

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The business of law is headed for huge disruption in 2020. Forward-looking lawyers will continue modernizing their practices, adopting alternative business models to help them grow and scale their business. In addition to spending over $1 billion in legal technology this year, according to the 2019 Altman Weil report on Law Firms in Transition the use of contract lawyers will be on the rise.  Of the 362 firms surveyed, nearly half (48%) were currently using contract lawyers.  Of those, 62% say the use of contract lawyers has delivered a significant improvement in their firm’s performance.

While the concept of a contract lawyer is certainly not new, the way in which attorneys are finding contract lawyers is evolving. Today, there are an array of alternative legal services and marketplaces like LAWCLERK that help busy attorneys find freelance lawyers. Freelance lawyering can be a game-changer for solo and small firms – on the “for-hire” side, or as a hiring attorney it’s a great way to manage the ebbs and flows of business.

Money, Money, Money

With freelancers, one of the greatest ways to reduce labor costs and increase profitability is with a flat fee model. Many law firms prefer the certainty of a fixed fee for legal services so long as they take care in setting their price for clearly defined legal services. And, to set the record straight, freelance lawyers can be billed at prevailing market rates.

The U.S. Supreme Court said it best: “By encouraging the use of lower cost paralegals rather than attorneys wherever possible, permitting market-rate billing of paralegal hours encourages cost-effective delivery of legal services and, by reducing the spiraling cost of civil rights litigation, furthers the policies underlying civil rights statutes.” See Missouri v. Jenkins, 491 U.S. 274 (1989).

To make sure your first encounter is a positive—and profitable—experience, consider the following tips. Taking these precautions early will go a long way towards building a lean and mean business model.

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  • Define the scope of the work.What work will and will not be included?
  • Establish change fees.If the scope of the project changes, there should be an hourly or other rate set out to cover it.
  • Manage conflicts at the onset.Before any confidential information is exchanged with a freelance lawyer, be sure they pass your conflicts assessment.
  • Set out payment terms.This includes payment due dates, pricing tiers, identifying when portions of payment are deemed earned and providing for withdrawal for nonpayment.
  • Specify staffing of the matter. Clients may be upset to discover that others will be doing a great deal of work if they expected you would personally handle the matter.

Now that the pricing has been settled, not sure where to start with a freelance attorney? Begin by picking an easy project like a research memo, and hand it off to a freelance lawyer. Make sure it’s not a rush job with a short turnaround deadline. And, let them spend hours digging through authorities and preparing a memo with their legal analysis.

Once you’ve tried freelancing, my educated guess is that you’ll probably wish you had tried it sooner.

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