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An example of savings from the use of contract professionals

Charles Volkert III, executive director of Robert Half Legal, cites in InsideCounsel, Feb. 2007 at 56, an example of a huge company that “hired 40 contract professionals for six months to review” discovery documents in concert with a law firm. Compared to what the firm would have charged, that decision saved the company more than \$2 million. Volkert mentions later that on average “companies save 30 percent to 50 percent by using contract attorneys and paralegals instead of sending the same work to a law firm.”

I put those three statements through some rough math. Six months of work for 40 professionals is around 1,000 weeks of work, say 40,000 hours. I gave 10,000 hours to attorneys and 30,000 to paralegals. Using \$200 as a rock-bottom associate hourly rate, Volkert’s average saving from a contract lawyer amounts to \$60-\$100 an hour; if law firm paralegals are at \$90, then the savings from contract paralegals come to \$45-63 an hour. Multiply the 10,000 attorney hours by \$80 (close to the mid-range saving, which equals \$.8 million) and the 30,000 paralegal hours by \$50 (\$1.5 million).

All those assumptions yield a savings of \$2.3 million, which gives me more reason to believe the estimated savings of \$2 million (See my post of Nov. 26, 2006 on contract employees and references cited.).

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One response to “An example of savings from the use of contract professionals”

1. Rachi Messing says:

Rees,
What is even crazier than those numbers is when you look at two other factors that we concentrate on when dealing with contract attorneys:
1. What technology was in use? Were the contract attorneys able to make the most efficient review decisions possible?
2. What management and supervision were in place for the contract employees – we have found that simply having a supervising attorney in the same room can increase productivity by as much as 30%