How Law Firms Benefit from Outsourcing Paralegal Services

Written by Erika Winston

5 min read

Paralegals offer law firms extremely valuable services, helping attorneys provide quality legal services to their clients. While many firms choose to employ in-house paralegals, more and more attorneys are choosing to outsource their paralegal service needs instead. With the numerous benefits of outsourcing like cost reduction, on-demand staffing, and remote work capabilities, this business practice is quickly becoming a not-so-secret-weapon for law firms nationwide.

This post will address many of the common questions about outsourced paralegal services, including those related to confidentiality, privacy, and liability. It will also discuss the benefits that law firms can experience when choosing this option over traditional staffing.


How Much Knowledge are Outsourced Paralegals Expected to Have?

Professional paralegals have extensive knowledge about the areas in which they practice, as well as the procedures and processes of general legal work. They should also understand the terms commonly utilized for law firm billing, like those included in this helpful blog post.

Most paralegal educational programs offer a broad curriculum focused on the development of practical skills and core legal concepts. For example, paralegals may receive instruction related to:

  • Client interviews
  • Drafting documents, such as pleadings, discovery, separation agreements, and divorce decrees
  • Preparing financial declarations
  • Legal procedures
  • Ethics
  • Substantive law
  • Legal research

In states that require certification, paralegals must pass an exam given by a formal organization, such as the National Association of Legal Assistants (NALA) or the National Federation of Paralegal Associations (NFPA.) These organizations test on a variety of subjects, which helps to reassure lawyers that the paralegals they contract possess adequate knowledge and skills.

In states without certification requirements, law firms look for educational accomplishments, like a certificate or associates degree program from a school or college. They also seek out contract paralegals with established work histories and stellar reputations.


Are Outsourced Paralegals Responsible for Client Confidentiality?

While attorney-client privilege is commonly understood, many people may not know that this privilege extends to any paralegal working on the matter. Even though paralegals are not lawyers, they still have professional and ethical obligations that must be followed in their dealings with law firm clients. In addition, even though outsourced paralegals are not technically employees of a law firm, they are held to the same levels of confidentiality.

Like attorneys, confidentiality and privilege duties extend to all aspects of paralegal work, including communications with clients, third parties, and the courts. Under Rule 5.3 of the Model Rules, attorneys with managerial or supervisory authority over paralegals and other legal staff must “make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer.”

The protection of client confidentiality extends to a variety of situations, including:

  • Documents and other written communications
  • Nonverbal communications
  • Files and computer security
  • Social media and online communication
  • Electronic communications with opposing counsel
  • E-mail communications sent to with clients and others
  • Verbal discussions about client matters in the presence of others

Revealing confidential data can result in the termination of a paralegal contract, along with potential ethical and criminal liabilities for the contracting law firm. However, it is vitally important for paralegals to inform attorneys any time a breach of confidentiality occurs. Ignoring the situation can have far greater consequences. The sooner the attorney learns of the situation, the sooner they can take steps to mitigate the damages.

Lastly, contract paralegals should remember that their duty to maintain confidentiality extends past the end of the contract. They have a lasting obligation to maintain the client confidentiality of matters worked on during the course of the contract.


What are the Benefits of Outsourcing Paralegal Services?

By outsourcing paralegal services, law firms may experience economic growth, as well as overhead cost reduction. Since staff attorneys generally bill at a higher hourly rate, they can pass lower-value tasks to paralegals while handling the higher value tasks themselves. Outsourcing promotes more efficient utilization of practice resources, which can significantly add to a firm’s profitability.

Outsourcing paralegal services can also result in the reduction of firm costs, including payroll taxes, health insurance, physical office space, and overhead costs related to in-house personnel. With outsourcing, law firms can make staffing decisions that directly correlate with their workload. Let’s look at a few examples:

  • The firm attracts a new client who is the defendant in a multi-million-dollar lawsuit. Defending the case will require substantial research and document review. To meet this immediate need, the firm outsources the work to a contract paralegal with extensive experience in this type of law instead of creating a new paralegal position that may not be needed after the case concludes.
  • A firm’s only paralegal is going out maternity leave while the firm is in the middle of a major case. Firm leaders contract a paralegal to handle their duties until they return.
  • A tax firm experiences a major influx of clients each year right before the tax filing deadline. Instead of hiring a paralegal to meet this temporary need, they outsource the tasks to a contract paralegal. They may even establish an ongoing relationship with the paralegal so that they can come back and help each year during tax time.

The workload within a law firm fluctuates depending on the demand. Legal practices can use outsourcing to adjust their staff as needed. It supplies firms with the support they need to handle the highs while saving overhead costs when no immediate need exists.


Law Firms of all Sizes Benefit from Outsourcing Paralegal Services

Law firms of all sizes can greatly benefit from the advantages of paralegal outsourcing. Smaller, growing practices find it particularly useful to outsource paralegal services rather than employing full-time paralegals, which can prove costly and detrimental to profits. For many firms, outsourced paralegal services prove to be a more profitable choice in the long run.

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