The tedious procedure of Recovering Paralegal Fees

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The tedious procedure of Recovering Paralegal Fees

''The idea behind the recovery of paralegal fees is to free up the attorney and maintain more reasonable control over costs,'' says Cheryl Leone, former legal business manager and CEO of Catalyst Group, Inc., which provides management and administrative help to law firms and others. ''Clients can benefit from paralegal fees because they help keep the costs of attorneys' fees down.''

Courts have acknowledged that benefit by providing for the recovery of paralegal fees in cases where those fees were deemed reasonable. As for what is considered an acceptable hourly amount, the states have taken their own stances. For example, a Massachusetts decision provided that $60 per hour was ''reasonable'' for paralegal and law clerk fees,¹ and the Louisiana courts have deemed $55 per hour in paralegal fees ''fair and reasonable.''² Some of the factors courts will consider when determining reasonable fees include the professional nature of the tasks performed by the paralegal, the location of the firm, the total time spent on the case by paralegals and legal assistants, and the accuracy of billing records kept by the firm.

In reaching a reasonable hourly dollar amount for paralegal fees, the landmark United States Supreme Court case of Missouri v. Jenkins held that firms can recover paralegal fees based on prevailing market rates rather than the hourly amount the firm spends to employ the paralegal.³ Many courts still use the ''prevailing market rate'' calculation or the ''lodestar method,'' which multiplies the number of hours worked by the current hourly market rate to reach the amount owed.

And clients are not the only people who may benefit from the recovery of paralegal fees: the firm and the paralegal also do. ''[Paralegal fees] give the paralegal or legal assistant some control to contribute to the overall success of the firm,'' Ms. Leone said. In addition, paralegal fees may allow a firm to branch out to new areas of the law and take on additional cases. ''Firms may actually expand into other areas. [There may be certain tasks] which just wouldn't be productive if the attorney did them, but if the paralegal takes them on, they can create new markets.'' As such, paralegals and legal assistants may become profit centers for their firms.

An able paralegal will also have much to gain by recovering paralegal fees. ''If you can show the attorney that you're more than paying for yourself, the firm will [more likely] keep you and give raises,'' Ms. Leone explained. Add to that clients who are happy to pay less for legal services, and the paralegal may be considered a great asset to the firm that can recover his or her fees.

When billing paralegal fees to clients, there are a few considerations firms must take. ''[B]e accurate,'' Ms. Leone advised. Billing requirements may differ by firm. ''For certain tasks, some firms may even choose to factor paralegal fees into a flat fee that's charged to the client,'' she said. Whatever the case, close attention should be paid to time sheets and other billing documents. In fact, some courts have said that firms must clearly distinguish between clerical and professional tasks on billing sheets to recover paralegal fees. Others compel firms to submit clear and well-kept documentation of time before recovery of fees is allowed.

Paralegals and legal assistants should also be familiar with their states' requirements and local decisions, as individual states govern paralegal fees. Most jurisdictions require proof that paralegals are directly supervised by attorneys. Also, firms must take precautions not to allow non-attorneys to perform tasks which should be left to attorneys only; these include giving legal advice, setting legal fees, and providing court representation, among others.

The recovery of paralegal fees offers money and time-saving benefits all around. ''[Paralegal fees] are a fairly new concept, and they provide area-driven income to the firm,'' Ms. Leone stated. ''[Paralegals can] become ambassadors for their firms and take ownership for some of the success of the firm.''

Read More About Becoming a Paralegal


Catalyst Group Inc.


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