How to Find “The One”


By Kris L. Canaday, ACP

If you’re thinking about obtaining support from a freelance paralegal (or any service provider for that matter) but are unsure of how to find someone who is a good fit for your practice or legal department, here are a few things to consider.  (Be prepared for a few surprises.)

Define positive and negative attributes of a successful freelance paralegal partnership

Before setting off to find a freelance paralegal, you have some homework.  Yes, homework.  First, be honest with yourself.  Sit down and really think about what you’re looking for in working with a freelance paralegal.  What is important to you and your practice?  What are your goals in working with a freelance paralegal?  What do you want to get out of the relationship?  What do you need?  What are you looking to achieve with a freelance paralegal?  What would make such a partnership beneficial?  Successful?

Also consider what you don’t want.  What would make such a relationship a negative, rather than positive, experience?  What would make it unsuccessful in your mind?  What, specifically, do you not want to happen?  Write down both the positives and negatives as this will form the basis for a successful partnership.  If you’re not clear yourself on what you want, need, or are looking for, both you and your freelance paralegal will be searching in the dark with no clear understanding of your goals or intent and you will likely be frustrated with the experience.

Finding a good fit

Okay, now that you know what you want and don’t want from a partnership with a freelance paralegal, you need to do your research.  (Yes, more homework.  No, it’s not law school all over again.)   You need to find a freelance paralegal who has the same ideas and goals as you.  Start with a list of questions and concerns you would like to discuss with a potential freelance paralegal.  If your top concern is security and confidentiality, you want to inquire into the freelance paralegal’s practices and procedures on this topic.  (If it’s not your top concern, it should be and you should still inquire.)  If you’re concerned about lack of control and oversight, ask what the freelance paralegal does to ensure this doesn’t happen.  Similarly, if you have a particular task you would like to delegate and just don’t know how it could be done, ask.  You’ll probably be surprised at the number of suggestions provided by the freelance paralegal.

So, is it a good fit?  How relaxed and comfortable you are with the responses will tell you if you’re on the right track.

This is also the time to convey the positive and negative attributes you identified above.  You need to discuss your goals and aspirations with the freelance paralegal so s/he has a clear understanding of what you’re seeking.  You also need to let the freelance paralegal know what you don’t want to happen; what would make the experience less than positive for you.  This will let the freelance paralegal know what’s important to you and sets the stage for a productive relationship.  If anything you’ve discussed conflicts with the freelance paralegal’s practice, s/he should let you know it may not be the best fit.

By the way, these should be real, live interactive conversations – either in person, via phone, or video conference.  DO NOT attempt to establish a relationship or ease your concerns with an email.  Back and forth email communications do not give you the opportunity to establish a relationship and become familiar and comfortable with someone as does real-life interaction.  Besides, more often than not, at least one of you will not communicate in a way that addresses everything that needs to be communicated.  It can be difficult for a freelance paralegal to know if all the attorney’s concerns are fully articulated and addressed in an email.  Similarly, as working with a freelance paralegal may be a new experience, practices and procedures in this setting are likely unfamiliar or misunderstood; what may be standard practice for a freelance paralegal may be unfamiliar to an attorney.  It’s much easier to identify unvoiced/unrealized concerns in personal communications and expand on information as necessary.  Even with the most articulate email communications, assumptions are still made.

Communicate, Communicate, Communicate

This final tip relates to both sections above and may come as the biggest surprise: Communication is the key to success; lack thereof almost always results in failure.  If you think about it, most disputes arise as a result of miscommunication or lack of communication altogether.  If you’re not a good communicator, working with a freelance paralegal may not be the most practical solution.  There are other ways to get additional support.  But, if a freelance paralegal is the best solution for your particular situation, now is the time to work on improving communication.  It may take a little more effort to find someone who is a good fit for you, but it can certainly be done.  First and foremost, be honest with that person and let him or her know you will need both understanding and help with communicating.  And, be open to suggestions; if you are, your freelance paralegal should be able to easily develop a plan for successful communication.

Conclusion

When you set out to find the right freelance paralegal for you, make sure you know what you want and don’t want from the partnership.  Also, make sure you inquire as to the freelance paralegal’s practices, policies, and procedures to make sure they align with your own models.  Ask for clarification and don’t hold back questions or concerns.  It all ties in to the importance of communication; if you have a hard time communicating at this stage, you may find it even more difficult down the line as you become more comfortable with the partnership and your communication becomes more lax.  You should build enough of a relationship to feel you can be honest with your freelance paralegal and not expect him or her to “read between the lines.”  Begin establishing this relationship from the beginning with real-life communications either in-person, via phone, or web conference. If you follow these guidelines, you’ll be well on your way to finding “The One.”

Kris L. Canaday

Kris

Advanced Certified Paralegal, and founder of Integrative Legal Support, Kris L. Canaday provides trademark, corporate, and litigation support to law firms and legal departments across the country.  She’s also the author of Paralegal Support 101, a knowledgebase for attorneys on the paralegal profession and paralegal support services.  She can be reached at 888-454-5782 or Kris@IntegrativeLegal.com.

Kris is also a member of Freelancelaw.com.  See http://www.freelancelaw.com.

The Managing Partner’s Nightmare: Leaving Money on The Table


By Les Altenberg

In our over 20 years of marketing law firms, one of the most often expressed concerns by managing partners is a fear that they are leaving money on the table.  By this, they are usually referring to the fact that clients are associating the firm and/or individual attorneys with specific areas of focus, rather than as a resource for resolving any of a number of legal matters.  This is typically seen in the client who contracts with a law practice for one legal matter and then walks down the street to contract with another regarding a different legal concern.

Part of this may stem from compensation arrangements that do not reward internal cross-promotion and part may simply be a function of internal politics, territoriality and a philosophy that “I’m not doing well unless you’re doing worse.”

So how does the growth-inclined law practice avoid the dreaded “’shoulda’s’ ‘woulda’s’ and coulda’s?’”

The answer lies first in creating a culture in which the firm moves from a practice area orientation to a problem-solving one. Such an orientation often requires re-educating personnel that the firm’s major focus really is on just helping people. Administrative and human resource matters should be approached with that mindset and compensation should, in large part, be based on each attorney’s capacity to do just that. That means rewarding individuals not just for the work they bring in or the work that they do, but also for the work, internal or external, that they can bring to another member of the firm’s staff. Further, in some cases, an interdisciplinary team approach to client problem-solving should be considered. And processes should be put into place that allow firm attorneys to regularly be made aware of the legal matters in which their brethren are involved.

Second, law firms must do a better job of educating both prospects and clients as to the full range of their legal services. This means developing the kinds of materials – both online and off, which easily convey the many ways in which the firm can be of service. Specific areas of the firm’s legal expertise that are buried deep inside a firm brochure or web site do little in communicating how the firm can help an individual or business in more ways than they might have otherwise thought. Instead, law practices – particularly those with disparate areas of focus, should consider development of collateral materials that highlight its portfolio of services upfront. Ditto for the firm web site.  Often, it is not enough for such content to be placed under some “Practice Area” button. That’s because the individual looking for assistance on a family law matter may never even bother to see whether the firm can also help him on his pending bankruptcy. Ditto for the corporation seeking help with transactional matters, but not knowing (or bothering to find out) that the firm can also handle matters of litigation as well.

One way in which we have seen law firms address such issues is through the development and dissemination of e-newsletters. Here, what matters most is not the actual content (though it should still be well thought-out and well-written), but rather the subject line on the address and the title of the main article. Recipients may never actually even read the content, but even in rejecting it, will nonetheless still be exposed to other services the firm provides. The goal here is not to drum up business immediately (though its been known to happen), but to plant the seeds among the firm’s database for that day when the need for a particular service does arise.

Finally, in an age where everyone is (or should be) self-publishing, it is easy to communicate the individual skill sets of specific attorneys. What is mandated however, is ensuring that the manner in which such messages are disseminated, show a consistent regard for the firm at large. This means incorporating the firm’s logo, tag line, contact information (and possibly even practice areas) into personal  online communications. Ultimately, it is the sum of all communications that serves as the face (and even the essence) of the organization.

Les C. Altenberg, Principal of A.L.T. Legal Professionals Marketing Group

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Les Altenberg is a principal at A.L.T. Legal Professionals marketing Group (www.legalprofessionalsmarketing.com)  and brings over 25 years of experience to the challenges of marketing law firms.  Initially working at some of the nation’s largest and most prestigious marketing firms (Young & Rubicam, McCann-Erickson, Foote Cone Belding), Les founded A.L.T. Legal Professionals Marketing Group as a means for providing law firms and those who serve the legal profession with strategic insight and resources to which they might otherwise not have access.

He is the author of numerous legal marketing articles that have appeared in such publications as The National Law Journal, Law Practice, Texas Bar Journal and the Legal Intelligencer, among others. An avid lecturer, Les is a member of the Legal Marketing Association (LMA), a former member of the Advisory Board to the Paralegal Program at Burlington County College in New Jersey and has served as an instructor in the LMA distance learning series.

He can be reached at 856-810-0400 or via email at laltenberg@legalprofessionalsmarketing.com.

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Communication – The Key to Working Successfully with Freelance Legal Professionals


By Kris Canaday,

If you think about it, what’s the underlying cause of most disputes?  What’s a leading cause of failed relationships – both business and personal?

Ineffective communication.  Period.

Case-in-point: How many of us have had an argument or disagreement with a significant other where, when you reconcile your differences, you each realize that the other misunderstood what you were trying to say or did not have the same key information you did to be able to draw the same conclusion?

Why can mediation, arbitration, and collaborative law be so effective?  Because they bring in neutral third parties, who are not blinded by emotion, to 1) extract all that has not been communicated before, 2) help minimize emotions, and 3) present the information in a way that the receiving party understands.  Even with individuals who communicate information well, when the receiver is communicating at a different level or from a different perception, misunderstandings are bound to occur.

Sound like a hopeless situation?  Well, no.  To start, if there were no disputes, the legal profession would be significantly smaller than it is, so consider it job security.  As legal professionals, it’s our job to effectively identify pertinent facts, apply them to law, and communicate that information to help resolve our clients’ disputes.  Does that mean every legal professional is an incredible communicator across every type of situation?  No.  We’re all human.  We all strive to communicate well and avoid disputes, but at some point and at some level we fail to effectively communicate with or fully understand communications from others.

How is this relevant to working with a freelance legal professional?  Quite simple, really.  Simply realizing that communication is key to working successfully with a legal freelancer puts you on the track to success.  Realizing that problems may be the result of ineffective communication also has you well on your way.  Why?  To resolve a problem, you must first recognize it and identify its cause.

You may be used to working, and thus communicating, face-to-face with clients and colleagues.  The people you work with see you in action and thereby learn your preferences and ways of communicating.  When you work with a service provider, such as an accountant, printer, or freelance paralegal, it’s important to articulate your preferences, goals, and expectations to ensure the end-product is satisfactory, especially when establishing the work relationship.

For example, if work products ABC and XYZ are equivalent, but you envisioned ABC and did not communicate that information, you’re going to be dissatisfied if you receive XYZ.  There are many ways to accomplish the same work product and every attorney has his or her own preference in reaching that result.  Successfully communicating those ideals will afford the desired result.

When you’re working with a freelance legal professional, especially in the beginning or anytime you have something out of the norm, communication is key to successful collaboration, exemplar work-product, and a long and prosperous business relationship.

*****

Originally published May 30, 2011, at Paralegal Support 101 under the title “Communication – The key to working successfully with a freelance paralegal (or anyone for that matter).”  Updated and reprinted with permission.

Kris Canaday (Integrative Legal Support)

Kris

Advanced Certified Paralegal, and founder of Integrative Legal Support, Kris L. Canaday provides trademark, corporate, and litigation support to law firms and legal departments across the country.  She’s also the author of Paralegal Support 101, a knowledgebase for attorneys on the paralegal profession and paralegal support services.  She can be reached at 888-454-5782 or Kris@IntegrativeLegal.com.

Kris is also a member of Freelancelaw.com.  See http://www.freelancelaw.com.

Freelancing, Editing and More – Upcoming Presentations


Are you looking to launch a freelance business or get started as a freelance writer?  FreelanceLaw.com member Ruth E. Thaler-Carter, who provides editing and proofreading to law firms and a PR firm serving the legal profession, has a number of presentations coming up.  Join Ruth and learn how to launch a freelance business, work with freelancers, edit and proofread, and more.

Upcoming Presentations:

  • “Editing on Your Own: Launching a Freelance Business,” American Copy Editors Society (ACES), Saturday, March 28, Pittsburgh, PA (http://www.copydesk.org/aces2015/)
  • “The Employer’s Side of Freelancing—Finding and Working with the Tech Comm Contractors You Need,” Society for Technical Communication (STC)-Rochester, 3–4 p.m., Monday, March 30, Rochester, NY “Going It on Your Own—Launching Your Tech Comm Business” (half-day workshop), STC-Rochester, 12:30–3:30 p.m., Tuesday, March 31, Rochester, NY (stc-rochester.org/spectrum)
  • “Getting Started as a Freelancer,” “Websites for Freelancers,” “Basics of Editing and Proofreading,” webinars for the EFA, 7–9 p.m., April 9, 21 and 28 (http://www.the-efa.org/eve/catalog.php)
  • Benefiting from the RWN’s Newspaper Column,” Rochester Women’s Network, 6 p.m., April 29, Roc City Wellness, 1598 Penfield Road, Rochester, NY
  • “Getting Started as a Freelance Writer,” “Websites for Freelancers,” “Basics of Editing and Proofreading,” classes for Writers and Books, 7–9 p.m., May 5, 12 and 20; “Back to Basics: Overcoming Your Fear of Grammar,” 1–3 p.m., Saturday, May 9, Rochester, NY (www.wab.org)
  • “Websites that Work for Editors,” Editing Goes Global conference of the Editors Association of Canada (EAC), 1:15 p.m., June 14, Toronto, Ontario, Canada (http://www.editors.ca/node/2772)
  • “Managing and Promoting Your Business,” noon, Monday, September 14, Technology Farm Associates, Geneseo, NY

For more information about these presentations or to hire Ruth Thaler-Carter for a project, visit http://www.writerruth.com.

Ruth E. Thaler-Carter

Ruth E. Thaler-Carter (www.writerruth.com) is an award-winning freelance writer, editor, proofreader, desktop publisher and speaker whose motto is “I can write about anything!”® She provides editing and proofreading services to two law firms and a public relations firm serving the legal profession and industry, among many other projects and clients. She also hosts an annual conference for freelancers (www.communication-central.com).

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2 Sides of Attorneys’ Online Presence: Being Found and Being Vetted


By Diane Bucka

Remember the big controversies over whether to take out a Yellow Pages ad for your law firm? There were legal ethics concerns, cost/benefit challenges, and general trepidation about whether even to “go there” at all. The days of questioning whether to market your law firm are long-gone; having an online presence and deploying basic business development tools are now baseline expectations for any practice.

But what should your attorney website accomplish?  There are really two purposes of existing online:  being discovered by potential clients, and presenting a viable summary of your unique strengths to help you rise above the crowd.

Ever-Elusive SEO:  Why Search Results Matter and What Really Contributes to Them:

Potential clients seeking legal services look for them the way they look for most professional services:  they ask people they trust for referrals or consult everyone’s good buddy Google. A 2014 FindLaw survey showed that searching online is the highest-ranking method to find a lawyer, beating out asking a friend or contacting local bar associations or other ads.  Arriving at or near the top of a local search for legal services depends on careful presentation of your website content along with consistent, rigorous engagement on social channels.  Participating in social media, legal forums and the like aligns your messaging with the boost provided by their broader reach.  It’s a commitment – initial set-up of profiles on social media, directory listings and ongoing posting – but one you can maintain in about 15 to 20 minutes per day if done right.  (Or, of course, you can outsource these tasks to a qualified professional.)

Try a google search for yourself to see what happens (using subject-matter keywords, not your name); notice how many of the results below the sponsored listings are from directories or social media.  If you don’t appear near the top of the organic search results, take a look at those who do with a careful eye toward what those websites say relative to intuitive search terms used.  While refined search engine algorithms no longer reward forced keyword placement or “jamming,” there’s no denying the importance of appropriate contextual inclusion of relevant search terms.

Once You’ve Been Found:  Does Your Site Endorse You?

After all the effort required to get eyeballs onto your website, don’t squander the opportunity.  Whether  for referral sources validating your bona fides or potential clients seeking solutions to vexing issues, it’s vital, at a minimum, to verify that:

  • Content addresses the most frequently asked questions you hear from new clients;
  • The language is clear, not hyperbolic, and differentiates you from other practitioners in your field;
  • Tangible, relatable success stories are presented in the form of testimonials or case studies as social proof that strongly influences buying decisions.

Consider using video to humanize your messaging; many people relate to seeing and hearing someone more than reading.

The goal is to provide content that informs, but some is properly placed on your static (fixed) pages while some belongs on your blog (which, yes, you should have).  Limit static pages to what fits on the screen without too much scrolling required, typically under 100 words per page.

Above all, more than your alma mater, your publications, or awards…..remember to keep a constant and vigilant orientation toward the point-of-view of those perusing your website to compare and vet you.  Their issues and concerns are the reason they are looking, so be sure they find what they are seeking.

About Me | Diane Bucka | Freelance Copywriter

Diane Bucka is a freelance writer, content marketing specialist and paralegal who assists law firms and business owners with effective communication and business development solutions. Visit her site or reach her at diane@dianebucka.com. 

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Montage Legal Group Acquires FreelanceLaw


Montage.FreelanceLawAfter six years operating a successful nationwide freelance attorney network, Montage Legal Group has acquired FreelanceLaw.  FreelanceLaw will enhance Montage Legal’s current freelance attorney services by providing law firms with an online searchable database of non-attorney freelance professionals.  While Montage Legal will stay focused on sophisticated contract/freelance lawyer services, FreelanceLaw is now the solution for law firms looking for all other types of freelancers – from legal secretaries to virtual bookkeepers.

Freelance professionals who specialize in serving law firms can join FreelanceLaw, and grow their own businesses by accepting projects that fit their schedules.  Once a freelancer subscribes and creates a profile, law firms can hire them directly for one-time projects or long-term work.

Founded in 2006 by Melody Kramer, FreelanceLaw is designed to be a single resource for law firms seeking access to every type of freelancer needed to start, maintain, or grow a law practice, including virtual paralegals, legal secretaries, web developers, bookkeepers, court reporters, translators, and more.  With Montage Legal Group’s excellent reputation, I am confident that aligning FreelanceLaw with Montage will strongly benefit law firms and freelancers alike,” says Kramer, owner and founder of Legal Greenhouse.

Montage Legal Group, with 100 freelance attorneys hand-picked out of thousands of applicants, is well known for its emphasis on work/life balance for attorneys, especially during parenthood.  Montage Legal’s founders, Laurie Rowen and Erin Giglia, intend to expand their family-friendly philosophy to reach beyond the freelance attorney market.  FreelanceLaw will be a supportive space for non-attorney freelance professionals who specialize in assisting law firms to find the career balance they seek.

Rowen and Giglia have been assisting law firms since 2009 by connecting them with highly skilled freelance attorneys.  “Our law firm clients have asked whether we have paralegals or secretaries on our team.  Law firms are unique businesses that require specialized skills, and are so busy that they need the convenience of a single resource. We saw an opportunity to provide our clients with that resource through FreelanceLaw,” said Rowen.

To view this press release in its entirety, please see Montage Legal Group Acquires FreelanceLaw.

Rowen and Giglia will now be managing the Legal Outsourcing Journal blog associated with FreelanceLaw, as well as From BigLaw to FreelanceLaw associated with Montage Legal Group. To submit a post for either blog, please email info@montagelegal.com.

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Eight Tips for Conducting a Successful Deposition – From a Court Reporter’s Perspective


By Stephanie Leslie

Taking a “good” deposition can help you settle the case your client’s way. Expert litigators have been able to win cases based on the quality of the deposition reflected in the transcript. Below are 8 tips that can help you make this a reality.

  • ContextProviding spellings of proper names, technical terminology, attorney names, and a caption before a deposition begins can help us to create a cleaner transcript with faster turnaround time.

 

  • Special Circumstances – Giving us advance notice that the deposition will be “realtime,” expedited, requiring a rough, etc. can ensure that it runs as fast and efficiently as possible with a quick turnaround time.

 

  • Timeout – Short breaks every hour or two not only help us rest and stretch, but also help with our endurance throughout the day. A long day with very few breaks may actually impede the integrity of the transcript.

 

  • Fast Talkers – A 3-second pause in between the questions and answers can help immensely. They allow us to catch up and prevent us from having to interrupt and slow everyone down.

 

  • Arguers – Heated arguments are often unavoidable, but you should know that if you want what you’re saying on the record, you must try your best not to interrupt and talk over others. Otherwise, it is virtually impossible to get it down.

 

  • Mumblers – A mumbler is usually more difficult to take down than a fast talker, so please speak up clearly, and avoid covering your mouth with your hands.

 

  • “Exhibit A” –When assigning exhibit markers, please pause a moment so we can mark them. We can’t type and mark at the same time.

 

  • Video – Beware: Everything that can be heard on the video will be transcribed. We mean “everything.”

Stephenie Leslie

Steph's Head  Shot

Stephanie Leslie, CEO and co-founder of Regal Court Reporting, has over a decade of experience as a court reporter working in the legal services industry.

Stephanie is a certified shorthand reporter, CSR #12893, with a technical degree from South Coast College in Orange.  She also holds an associates degree from Florida College.

You can reach Stephanie at stephanie.leslie@regalcourtreporting.com

 

What Law Firms Should Know Before Contracting With Temporary Contract/Freelance Attorneys


1-501041309MontageLegalGroup_pdf-SECURED-Adobe-Reader-562013-93446-AM-230x300By Erin Giglia

In the current economic climate, many businesses seek law firms offering reduced rates or alternative fee structures to lower their legal bills.  But law firm lawyers are overwhelmed since their pool of associates is smaller due to layoffs and hiring freezes.  Rather than hiring additional associates, firms increasingly rely on temporary “freelance” or “contract” attorneys to meet their clients’ needs.

Temporary attorneys can be an attractive model, but firms must consider the ethical rules.  How are conflicts of interest managed? Can a firm add a surcharge to the temporary attorney’s rate?  Must a firm disclose the relationship to its clients?

In California, the Code of Professional Conduct does not include rules that specifically address temporary attorneys, so temporary attorneys and law firms must look to the Code, ethics opinions, and the ABA Model Rules for guidance.

The Ethics of Contract Lawyering, Part 1 and Part 2, published in Law.com/The Recorder, discusses eight important considerations for law firms when contracting with temporary freelance lawyers: conflicts of interest, aiding and abetting the unauthorized practice of law, duty of competence, duty to inform the client, fees charged to the client, duty to preserve client confidences, fee splitting, and malpractice insurance.

The article addresses the following questions:

  • How should a law firm manage conflicts of interest when outsourcing legal work to a freelance attorney?
  • Does the use of freelance attorneys who are not members of the State Bar of CA violate ethical rules prohibiting aiding and abetting in the unlawful practice of law?
  • Does a law firm violate ethical rules if it uses an inexperienced contract attorney?
  • Is a law firm required to disclose to its clients that it is using a freelance attorney for a legal project?
  • Can a law firm add a surcharge to the freelance attorney’s hourly rate?
  • Can a law firm disclose its client’s confidential information to a freelance attorney?
  • Can a law firm pay a company an hourly rate for the work performed by a freelance attorney associated with the company?
  • Do freelance attorneys need to carry their own malpractice insurance?

For a full copy of The Recorder’s article, The Ethics of Contract Lawyering, by Laurie Rowen and Erin Giglia, please email ethics@montagelegal.com.

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A Tale Of Two Markups: One For Lawyers, The Other For Non-Lawyers


by Wilton H. Strickland

Almost a year has passed since I embarked on my quest to become a freelance lawyer, and it’s been the best of times and the worst of times. While exciting and liberating, there are serious challenges such as finding attorney clients and persuading them that they can benefit from outsourcing some of their work to me.

An obvious advantage is that my fee is discounted and thus allows them to turn a profit while saving time. It sounds too good to be true, which often leads people to ask just how this “markup” can be ethical. Upon researching the issue to prepare a CLE course, I stumbled on divergent standards governing markups for lawyers versus non-lawyers. This is an important distinction to flesh out, since many who provide outsourcing services are non-lawyers (often paralegals) who have just as much of a stake in conducting their business in an ethical manner as we lawyers do.

Marking Up The Fee Of An Outside Lawyer

In its landmark Formal Opinion 08-451, the ABA offered several guidelines for ethical outsourcing, including how to pass along the expense to clients. Page 5 of the Opinion broaches the subject as follows (emphases added):

[T]he fees charged by the outsourcing lawyer must be reasonable and otherwise comply with the requirements of Rule 1.5. In Formal Opinion No. 00-420, we concluded that a law firm that engaged a contract lawyer could add a surcharge to the cost paid by the billing lawyer provided the total charge represented a reasonable fee for the services provided to the client.

Notice how the surcharge analysis centers on lawyers, not on paralegals or other non-lawyers. This theme continues on page 6 (emphases added):

Likewise, the lawyer is not obligated to inform the client how much the firm is paying a contract lawyer; the restraint is the overarching requirement that the fee charged for the services not be unreasonable. If the firm decides to pass those costs through to the client as a disbursement, however, no markup is permitted. In the absence of an agreement with the client authorizing a greater charge, the lawyer may bill the client only its actual cost plus a reasonable allocation of associated overhead, such as the amount the lawyer spent on any office space, support staff, equipment, and supplies for the individuals under contract.

Thus according to the ABA, an outside lawyer’s fees may be marked up so long as the final fee to the client is reasonable, and there is no obligation to tell the client what the outside lawyer is being paid. The only stated exception is when the firm chooses to pass along the expense as a disbursement, in which case the firm must charge at cost absent client consent for a different arrangement.

I have found no state or local ethics opinion that disagrees with the ABA’s analysis on this issue. At most, the other ethics opinions stress that the outsourcing relationship might constitute fee splitting if the outside fee is linked to the client’s fee, in which case client consent indeed becomes necessary. See, e.g., Colo. Bar Ass’n, Formal Op. 121, 6 (2009); S.C. Bar Ethics Advisory Committee, Ethics Advisory Op. 10-08, 2 (2010). While the opinions vary on whether client consent is necessary for the outsourcing relationship itself, this is a separate question from whether the payment structure requires client consent, which it normally does not.

Some case law has emerged regarding these markups, and it parallels the ABA’s approach. In one instructive instance, the defendants in a class action sought to exclude outside attorneys’ hours from the lodestar calculation of plaintiffs’ recoverable attorney fees, citing Formal Opinion 08-451 and arguing that such hours must be billed only at cost. The court disagreed, holding that a law firm may choose to pass along this expense as a unified fee rather than a cost disbursement: “[T]hat rule addresses the situation ‘[i]f the firm decides to pass [the contract attorney] costs through to the client as a disbursement.’ . . . This Court is aware of no requirement that a firm do so.” In re Citigroup Inc. Secs. Litig., 965 F. Supp. 2d 369, 394 n.6 (S.D.N.Y. 2013). In a ruling that slightly pre-dates Formal Opinion 08-451, one court gave this assessment that is music to the ears of any contract or freelance lawyer:

[Objectors] argue . . . that the work done by contract attorneys should be treated as an expense to be reimbursed, rather than being included in the lodestar. This objection lacks merit. The lodestar calculation is intended not to reflect the costs incurred by the firm, but to approximate how much the firm would bill a paying client. An attorney, regardless of whether she is an associate with steady employment or a contract attorney whose job ends upon the completion of a particular document review project, is still an attorney. It is therefore appropriate to bill a contract attorney’s time at market rates . . . .

In re Tyco Int’l, Ltd. Multidistrict Litig., 535 F. Supp. 2d 249, 272-73 (D.N.H. 2007) (emphasis added).

Marking Up The Fee Of An Outside Non-Lawyer

Whereas a law firm may choose to bill the work of an outside lawyer as a discrete, marked-up legal fee or an obvious, at-cost disbursement, it seems there is no such choice regarding the work of outside non-lawyers. Their work must be billed at cost, absent client consent to the contrary.

Turning back to Formal Opinion 08-451, only scarce mention is made of how to bill for anything other than the services of an outside lawyer, and it appears within the discussion of billing at cost on page 6. Some duplication of the previous quote is necessary (emphasis added):

In the absence of an agreement with the client authorizing a greater charge, the lawyer may bill the client only its actual cost plus a reasonable allocation of associated overhead, such as the amount the lawyer spent on any office space, support staff, equipment, and supplies for the individuals under contract. The analysis is no different for other outsourced legal services, except that the overhead costs associated with the provision of such services may be minimal or nonexistent if and to the extent that the outsourced work is performed off-site without the need for infrastructural support. If that is true, the outsourced services should be billed at cost, plus a reasonable allocation of the cost of supervising those services if not otherwise covered by the fees being charged for legal services.

So it appears that services outsourced to non-lawyers must be billed at cost unless the client agrees otherwise. One could argue that “analysis” refers back to the entire discussion of billing for an outside lawyer’s work, meaning that there indeed is an option to present a single legal fee that is marked up to reflect the non-lawyer’s work. The flaw in this argument is that the work of a non-lawyer cannot ethically be presented as a legal fee, as emphasized by the New York City Bar Association on page 4 of its oft-cited Formal Opinion 2006-3:

By definition, the non-lawyer performing legal support services overseas is not performing legal services. It is thus inappropriate for the New York lawyer to include the cost of outsourcing in his or her legal fees. See DR 3-102. Absent a specific agreement with the client to the contrary, the lawyer should charge the client no more than the direct cost associated with outsourcing, plus a reasonable allocation of overhead expenses directly associated with providing that service.

Though other ethics opinions do not appear to tackle this issue head-on, many of them rely on Formal Opinion 2006-3 as authoritative. See Fla. State Bar Prof’l Ethics Comm., Ethics Op. 07-2 (2008); N.C. State Bar, 2007 Formal Op. 12 (2008); Ohio Sup. Ct. Bd. of Comm’rs on Grievances & Discipline, Advisory Op. 2009-06, 6 (2009); Colo. Bar Ass’n, Formal Op. 121, 4-5 (2009); Va. State Bar Ethics Counsel, Legal Ethics Op.1850, 4 n.7 (2010).

It’s also worth remembering that in 2012 the ABA Commission On Ethics cited Formal Opinion 2006-3 when construing the ABA’s own Formal Opinion 08-451, specifically in Resolution 105C (which adds new outsourcing commentary to various Model Rules).

I have found only one instance where the work of an outside non-lawyer was allowed to be marked up without the client’s consent, a bankruptcy case out of Mississippi: In re Thorne, 471 B.R. 496 (Bankr. N.D. Miss. 2012). A creditor’s law firm outsourced certain drafting tasks to a paralegal firm and billed those tasks to the creditor as a full legal fee. The debtors argued that the arrangement was illegal and violated several rules of professional conduct, especially the prohibition against splitting fees with non-lawyers. The court disagreed, finding no legal or ethical problem with the arrangement. Id. at 504-07.

Yet Thorne should be taken with a grain of salt. For one, the arguments concerned whether the outsourcing arrangement amounted to fee splitting, not whether a markup for non-lawyer services should receive client consent. Moreover, ethical questions cannot ultimately be settled or enforced by a bankruptcy court, but rather by state licensing authorities.

Conclusion

Unless and until an ethics opinion clearly states otherwise, it is best to operate on the assumption that work outsourced to non-lawyers must be billed at cost, absent the client’s consent to a more profitable arrangement. The hope of obtaining such consent strikes me as a bit fanciful. I could be wrong on that score; if I am, so much the better! For the time being, though, we should assume that the only markups that do not require client consent are for work outsourced to lawyers. It is a far, far better thing to err on the side of being more ethical than less.

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Outsourcing and the feudal legal system


When I was a kid I remember playing a game called “King of the Mountain.”  Its sort of a medieval type of game.  As so aptly described in Wikipedia, the game involves “children attempting to occupy the highest point on a raised platform or hill, while resisting attempts by other children to knock them off and replace them.”  Picture medieval soldiers trying to scale the walls of a castle with men on the wall throwing rocks and hot tar trying to stop them.  In this game, the success of the winner depends on knocking down the other players.

I sort of thought we had developed more as a society since the Dark Ages.  I certainly thought that entering a profession as prestigious as the legal profession would ensure that I spent my career surrounded by professionals in the quest for liberty, justice and fairness for all.  I was wrong.  Way wrong.  I joined a grown-up version of King of the Mountain.

Do you know what kind of salary a law school graduate makes?  It all depends, on whether they are part of the “King” or the “Mountain.”  According to AmLaw 100, a yearly battle of King of the Mountain between the largest law firms in the country, DLA is the new King of the Mountain (overtaking last year’s king, Baker & McKenzie) with annual revenue of over $2.4 billion dollars.  (No, that’s not a typo – billion, not million).  DLA has 4,036 lawyers, so when you do the math, that’s $604,683 in revenue per lawyer.  Of the top 15 ranked law firms on the criteria of profits per partner, the top 15 ranked law firm partners received between $2.7M and just shy of $5M – per partner.  How to they rack up such huge profits year after year?  Okay, if you have over 4,000 workaholic lawyers churning out billable hours at obscene hourly rates, that helps.  But that’s not all that helps.  These large law firms also employ (and I’m using that term loosely), serfs.

This morning I was reading the all too familiar story of a former contract attorney who worked, via a temporary employment agency that specializes in legal work, for $33/hr (trying to pay off a likely $100-$150K student loan) in a room off a parking garage with no heat, no windows, no bathroom, no insurance, no paid holidays or vacations, no connection to the plush offices in the neighboring highrise building other than the case she is working on, a class action suit in which the highrise lawyers are bound to reap large financial rewards, while the contract lawyers working in the dungeon below will be shuffled out the door without even a thank you to be herded into the next dungeon for another law firm.  The Kings in their highrise law firms are millionaires sitting on a Mountain of contract attorneys.

Is it just me that thinks this is a French Revolution situation in the making?

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