By The Association of Corporate Counsel, with contributions from Alex Hoover, Esq.
Given the tough economic climate many companies face, legal departments are increasingly under pressure to reduce costs. For many in-house counsel, reducing costs can simply mean renegotiating outside counsel arrangements or firing lawyers. However, the effective use of a department’s paralegals can achieve many of the same cost cutting results as well as improve the productivity and work/life balance of everyone in the legal department. To utilize paralegals properly, in-house counsel must first understand their capabilities and limits as well as the benefits they can bring. This Top Ten presents ten of the issues every in-house counsel should know and consider when dealing with paralegals.
1. Who is a Paralegal?
A paralegal is generally a college graduate with some post-B.A. education, either a master’s degree or a certificate. Paralegals are often people who chose to be paralegals, not simply people on their way to law school. Furthermore, the paralegals are generally people who applied to and were accepted to competitive, selective programs.
2. Paralegals learn…
Paralegals are subject to rigorous assessment and overview in their certificate or masters programs. Attorneys, other paralegals, and professional educators review these programs and the paralegals’ performance. The curriculum of these programs generally focuses on the local legal market. For instance, paralegal programs in Silicon Valley will focus on tech or IP legal needs whereas programs in Washington, DC will focus on government contracting or international law.
3. Capabilities Paralegals have a broad range of skills that make them very useful in any legal setting.
Paralegal programs teach their students how to:
- Conduct print and web legal research;
- Legal, business, and scholarly writing;
- Rules of procedures and evidence;
- Motion practice;
- Substantive law; and
- Filing procedures.
Knowing what paralegals can do will help in-house counsel utilize their abilities.
4. Substantive Tasks
A paralegal’s usefulness to an in-house legal department goes beyond preparing documents and conducting legal research. In fact, paralegals can complete tasks that, at first glance, may seem legal in nature. These tasks include:
- Coordinating annual property tax appeal;
- Review/coordinate existing 3rd party office leases;
- Coordinate legal matters related to acquisition, sale, zoning, etc. of corporate real estate; and
- Investigate product liability issues.
By using paralegals on semi-legal tasks like those listed above, legal departments can give the much higher paid attorneys actual legal work.
5. Paralegals do have limits.
Although they are knowledgeable and capable of contributing to the practice of law, the law prohibits them from serving certain functions. Paralegals cannot accept cases, set fees, conduct depositions, sign legal documents, advocate in courts, or give legal advice. These prohibitions mark the line separating paralegals and lawyers. That boundary is important for in-house counsel when they are assessing the use of paralegals.
6. Decreased Expenses
The biggest benefit of paralegals is cost reduction. The simple math is that the average in-house attorney makes $78,000-124,000 per year. That is roughly $50 per hour. A paralegal on the other hand makes $46,000-70,000 per year, or $30 per hour. In-house counsel should consider this drastic difference in cost when assessing the value of paralegals. In many circumstances, paralegals can do the job of a junior attorney for much less.
7. Work/Life Balance
Paralegals can be an effective tool in managing the work/life balance that many in-house attorneys seek throughout their careers. Because paralegals can do many of the things that lawyers do, like legal research or writing, the non-legal tasks that often take up much of an in-house attorney’s day can go to paralegals. By shifting this work to paralegals, the attorneys can limit the amount of time they have to spend in the office doing tangential work. That frees up time for in-house attorneys to devote time to family or outside interests.
8. Effective Use of Attorneys
Related to the work/life balance benefits is the effective management of in-house counsel’s time and knowledge. The usefulness of a paralegal in supportive roles can open up time for attorneys to actually work on legal issues and do things that only attorneys can do. Not only does this more meaningful work give attorneys a level of personal satisfaction, it allows corporate law departments to get the most out of their attorneys, and their higher salaries. Drawing these lines also encourages the happiness and productivity of paralegals. If paralegals receive work researching and writing on substantive issues, they may feel like they are doing more than menial tasks. Defining lines can also avoid the tendency of junior lawyers to encroach on the paralegals’ workload, which gives paralegals a sense of job security, thus making them more satisfied with their work.
An obvious benefit of using paralegals to decrease legal costs is the benefit to the shareholders. Especially in smaller companies, a legal department can be a significant source of a company’s costs. By effectively using paralegals, in-house counsel can reduce those costs, resulting in more money being available for other departments or investor profit. Cutting legal costs may also help a legal department avoid more severe cuts from outside the department. As the economy continues to shuffle along, many companies have reduced department budgets and laid off employees. Preemptively reducing legal department costs through the use of paralegals may help you avoid those consequences.
10. Managing Paralegals
A key strategy to effectively managing paralegals and using them efficiently is to first assess the needs of the legal department. In-house counsel can reap most of the benefits just discussed by first understanding the legal needs of the corporation. Create a comprehensive list of the tasks the department needs to accomplish regularly and a breakdown of the component steps to each of those tasks. This simple process can help in-house counsel assess their needs and allocate tasks among paralegals and attorneys more efficiently.