Staffing your firm is a double-edged sword. The additional support is often vital to maintaining a healthy and profitable caseload. Yet, the additional overhead and drain on assets that go with adding staff can seem overwhelming and intimidate the best of us. There is no doubt that a careful cost and benefit analysis is necessary when altering your practice by adding new staff members to your practice. A business approach is necessary to override some of the emotional aspects that can come into play, especially in solo or small firms.
It is important to remember that the extra cost of an associate or paralegal does not come without financial benefit. To make sure that the cost of the associate or paralegal creates financial benefit to your law firm consider the following issues:
Properly vet new hires to be confident that they are skilled to the level necessary to generate the fees you expect and need to cover the employment costs. Of course, you want that and more to provide quality representation to your clients.
Extra Billing Hours
Calculate that freeing yourself up for just one or two extra billable hours per day by delegating non-attorney tasks to a legal assistant or paralegal will generate more than enough extra revenue to pay the paralegal’s wages for an entire day. Additionally, they should be doing their own billing which will also generate additional income.
Cost and Benefits
The additional productivity of good employees who do billable work on your cases can, in fact, outpace employee expenses. Generally, you should calculate approximately 25% of salary on top of an employee’s wages for required taxes and contributions, health care insurance, etc. to determine the actual cost of an employee. Any other benefits you may provide, such as paid leave, paid holidays, and retirement accounts, should also be added to the calculation. Consider what space you have for accommodating additional staff, and the added monthly expense if you need more room, additional office furniture, telephone, and computer equipment.
With both new associates and legal support staff, it is important to work the numbers and be certain that you are sure to be earning more in fees than you are spending to employee your new hires. Consider tying at least a portion of salaries to fees billed and received.
Division & Growth of Caseload
If you are considering hiring an associate attorney, you very likely already have more cases than you can easily manage yourself. Having additional staff can offer you the ability to dedicate additional time to existing cases and manage them in more efficient and effective ways. Plus, you have the opportunity for the newly hired associate to either bring cases to your firm with them and/or take on a whole client load themselves. Either way, it is entirely feasible that the fees billed by an associate will quickly be higher than the employment costs and salary associated with the position.
Commit to Success
Once you have determined the need, conducted a search, made your selection, negotiated the contract, and hired the right person to add to your firm, make sure that you invest in the success of your new hire with purposeful and thorough training. This person will be a face and voice representing your firm. Do your best to ensure that they understand not only the policies and procedures of your practice, but also your goals and expectations in how they represent your firm and your clients.
Take steps to increase your caseload and provide a consistent workload for your staff and plenty of opportunity for meeting new challenges. Monitor the progress of your new hires and, again, be engaged in ensuring their success.
Investing your time in these steps will help you to be successful in expanding your firm and meeting your own goals for growing your practice and, hopefully, improving your quality of life.
Jeanne, co-founder and managing partner of Divorce Lawyers for Men, is a successful civil litigator who has focused her legal practice on complex litigation, primarily catastrophic injury and wrongful death lawsuits. She has served as a member and Chair of the Washington State Bar Association Law Clerk Board, as a Thurston County Family Court Child Advocate, and as a founding member of the Thurston County Volunteer Legal Clinic.