Does Use of Paralegals Save or Cost More in Legal Expenses?

Reese Morrison in an article posted in Inside Counsel on March 24, 2011, states that “available data suggests that having more paralegals correlates with more legal spending, not less as some might expect.”   http://insidecounsel.com/Exclusives/2011/3/Pages/Morrison-on-Metrics-Paralegals-and-Total-Legal-Spendingg.aspx?utm_source=ic&utm_medium=email&utm_campaign=iccommentarya

Morrison, a management adviser to general counsel and the founder of General Counsel Metrics LLC, was writing about in-house use of paralegals.  Interestingly, though, Morrison’s research parallels what I have found in reviewing legal bills for insurers.  By far and away, the number one billing problem I see with outside counsel bills is the use and mis-use of paralegals.  In checking some of my past reviews, I note that overbilling and misbilling by paralegals can easily add 5% to 6% to legal bills.

Don’t get me wrong here.  I am a HUGE proponent of using paralegals.  In fact, I am the current Chair of the Indiana State Bar Association’s Affiliate Members Committee which is predominately made up of paralegals.  I really appreciate the real value (and cost savings) that wise use of paralegals can bring not only to in-house legal departments, but to outside counsel firms as well.    That is why it really pains me when I see law firms misusing or not using paralegals when it should be appropriate to do so.

I have written an article on common billing issues involved with using paralegals and clerical staff.  If anyone is interested in obtaining a copy, please contact me.  Also if you are going to be near Indianapolis on June 16, I will be speaking at an Indianapolis Bar Association seminar on the topic of “Ethical Billing Practices for Paralegals.”  I am assured that non-IBA members are welcome to attend.

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