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How Do Paralegals Improve the Law Firm’s Bottom Line?

Part One of an Occasional Series

We have worked in this rewarding profession for many years and frequently meet members of the legal community who wish to learn more about the benefits of employing paralegals to improve the quality of legal services they offer.  We will use this blog to provide information regarding the benefits of hiring paralegals to be contributing members of the legal team.

Generally, a paralegal is qualified by education, training or work experience to perform specifically delegated substantive legal for work under the supervision of an attorney and for which an attorney is responsible.  California Business and Professions Code section 6450(a) states:

“Paralegal” means a person who holds himself or herself out to be a paralegal, who is qualified by education, training, or work experience, who either contracts with or is employed by an attorney, law firm, corporation, governmental agency, or other entity, and who performs substantial legal work under the direction and supervision of an active member of the State Bar of California, as defined in Section 6060, or an attorney practicing law in the federal courts of this state, that has been specifically delegated by the attorney to him or her.

A paralegal may not provide legal advice, represent a client in court, establish fees, or engage in the unlawful practice of law.

In 2005, D. Jeffrey Campbell and the American Bar Association Standing Committee on Paralegals published a report entitled “The Economic Benefits of Paralegal Utilization.”  Mr. Campbell discusses the five principal advantages to paralegal utilization:

  • Increased firm leverage
  • Improved firm profits
  • Improved return on investment
  • Improved client satisfaction and retention
  • Improved lawyer quality of life

It is important to note that four out of the five advantages have a direct positive impact on the bottom line of the firm.

The benefits are realized to their greatest extent by attorneys who have educated themselves regarding their own practice needs and the assistance they expect from a paralegal.  Included in the decision making process should be a well developed idea of those tasks the paralegal will perform and an accompanying billing rate.

Future articles in this series will include hiring and retaining paralegals, work paralegals perform, how paralegals improve client satisfaction, and how paralegals result in increased billing rates.  If readers have any questions regarding paralegals, we invite you to contact us and we will respond to them.

Ellen Sheffer                            Leslie Donahue