It’s Time to Replace Your Paralegals . . . with Lawyers

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Over my 25 years of practicing law, I’ve seen the economy change quite a bit. The biggest impact in my little world has been the price of associates. Over the years, it has come steadily down to the point where we can now pay an associate very, very little money.

That has an impact on the mix of employees in a law firm. I’d advocate that you stop hiring paralegals and replace them with lawyers.

It’s a harsh fact of life that attorney pay has declined significantly. It’s a matter of supply and demand, and the supply of attorneys is well beyond the demand. There aren’t nearly as many jobs as there are lawyers.

Should we be upset about this fact? For more than a decade, we’ve known that law school hasn’t been a good career move if you’re worried about income. Law schools have been cranking out graduates even when they knew jobs weren’t going to materialize, and a cursory review of the business and legal press made it clear that career prospects weren’t going to be pretty. If people chose to go to law school and missed that information, they weren’t looking very hard.

Of course, there are lots of reasons to go to law school beyond the money. That’s a personal decision.

The impact of these extra lawyers is lower and lower pay for attorneys. That’s an opportunity for law firms and for clients.

We’ve reached a point where a recent law school graduate can be hired for less—and sometimes much less—than a good paralegal. The reality is that the salary for associates isn’t going to increase for a long time unless a particular associate proves very valuable. Salaries will probably continue to decline over the next decade.

Of course, comparing lawyers to paralegals isn’t an apples-to-apples analysis. Lawyers may require expensive licensing expenses, training and education costs, and insurance. You’ve got to look at the particulars as you consider your options. Compare billing rates, productivity, and the wage and hour laws (which may require overtime for paralegals and not lawyers, among other things). Today, I think you’ll find that lawyers compare pretty favorably to paralegals.

Generally, lawyers are more useful than paralegals. They’re versatile. They can go to court. They have greater credibility with many clients, and they’ve been deeply educated in thinking about problems in an analytical manner. They’re productive, helpful, and capable. That’s all good for you and your firm, especially if they aren’t able to command a high paycheck.

It’s unfortunate that the economic situation is what it is with respect to the value of attorneys in the marketplace. We don’t control that value.

We do, however, control the management of our practices, and it’s incumbent upon us to create value and deliver that value to our clients. In the current economy, you may be better positioned to create value for your customers with attorneys rather than paralegals. It’s time to evaluate that decision.

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