How Lawyers Find Outsourced Help

Episode Notes

Transcript

The Legal Toolkit

How Lawyers Find Outsourced Help

10/02/2018

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Intro: Welcome to Legal Toolkit, bringing you the latest legal trends and business initiatives to help you manage your law firm, with your host Jared Correia. You are listening to Legal Talk Network.

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Jared Correia: Hey everybody, welcome to a new episode of The Legal Toolkit here on the Legal Talk Network. If you are looking for a really bad movie to watch, 00:00:27 recommend 1990’s ‘Captain America’, I feel like that will be a good primer for Infinity War 2, an interesting fact J.D. Salinger’s son play Captain America in that movie.

If you are a returning listener, welcome back. If you are a first-time listener, hopefully you will become a longtime listener. And if you are Aaron Judge, Jose Altuve, Stephen Strasburg, Lance McCullers or any of the other injured players on my fantasy baseball team, get well soon, gentlemen.

As always, I’m your show host, Jared Correia, and in addition to casting this pod, I am the CEO of Red Cave Law Firm Consulting which offers subscription-based law practice management consulting services for law firms, bar associations, and legal vendors. Check us out at redcavelegal.com.

You can listen to my other podcast, ‘The Lobby List’, a family travel show I host with my wife Jessica on iTunes. Right now, we are going island to island as part of a Hawaii boot camp. So rate us and comment.

Here on the Legal Talk Network however we provide you each month with a new tool to add to your own legal toolkit so that your practices will become more-and-more like best practices.

In this episode we are going to talk about How Lawyers Find Outsourced Help. So this is your guide to freelancing. But before I introduce today’s guest, let’s take a moment to thank our sponsors.

Answer 1 is a leading virtual receptionist and answering services provider for lawyers. You can find out more by giving them a call at 800-Answer-1 or online at www.answer1.com.

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We would like to thank our sponsor, Thomson Reuters Firm Central, cloud-based legal practice management that streamlines your day and automates non-billable administrative tasks, so you can accomplish more with less.

My guest today is Talitha Gray Kozlowski. Talitha is a Co-Founder and the COO of LAWCLERK, which manages law firms with freelance attorneys. Talitha also still practices law as a partner at Garman Turner Gordon, a boutique law firm in Las Vegas.

Talitha has received numerous state and regional awards for her work with clients in a wide variety of cases. She represents debtors in possession, creditors and ad hoc committees, secured and unsecured creditors, individual debtors, trustees, asset purchasers and other constituencies in the numerous facets of corporate bankruptcy, liquidation and work out matters. That sounds thrilling.

Welcome to the big show Talitha Gray Kozlowski.

Talitha Gray Kozlowski: Thank You Jared. It’s a pleasure to be here. As you know, I’m a big fan of the podcast, so you’ll have to forgive me if I’m a little bit starstruck.

Jared Correia: Oh thanks. Your check is in the mail. Thank you for doing this, this is going to be fun, and I was telling before, there is an ‘X-Files’ episode essentially named after you. So after the show, I would ask that you watch Season 3, Episode 24 which is based on The Grand Inquisitor, a chapter in The Brothers Karamazov because David Duchovny was an English major, so.

Talitha Gray Kozlowski: That is exciting. I’m looking forward to it.

Jared Correia: Yeah, we bring it all home here at The Legal Toolkit. So, one thing I want to ask you about because I read your bio at your firm website, you’re doing bankruptcy stuff and I do apologize but bankruptcy is not necessarily probably the most exciting thing in the world, right, especially what are you going through it.

You also run marathons, right?

Talitha Gray Kozlowski: I have done some marathons. I’m currently training for a Duathlon, which is a whole new exciting venture as I don’t think I had been on a bike since I was 17, so it’s been exciting to be training for that.

Jared Correia: Okay, so I know what a triathlon is which is biking, swimming, and running. So, it’s a Duathlon biking and running?

Talitha Gray Kozlowski: It is. I swim like a frog so the triathlon is a little too much, a little too daunting, but it’s the biking and running.

Jared Correia: All right, so where would one do a Duathlon? I know that there’s like an Ironman triathlon in Kona in Hawaii, right, like is there a place where you do one of these?

Talitha Gray Kozlowski: This one that I’ve signed up for is in Catalina Island, so that should be quite lovely.

Jared Correia: Oh, wait a second, in California?

Talitha Gray Kozlowski: Yeah, yeah.

Jared Correia: Like the Catalina Wine Mixer of ‘Step Brothers’ fame?

Talitha Gray Kozlowski: Very, very similar I think.

Jared Correia: Oh wow, that sounds awesome. It seemed really painful but I might want to train to get out there, that’s exciting.

Talitha Gray Kozlowski: Well, you’re invited so I will buy you a drink afterwards.

Jared Correia: Great. All right, I’ll hold you to that. All right, let’s get to talking about freelancing and attorneys because this is a cool subject. So, let me start by saying they are like I’ve seen businesses who are non-law firms turning to freelancers on a regular basis like they like it because it keeps their costs down, they can hire contractors instead of employees, they get more freedom to work with different people.

(00:05:05)

And you see services like Upwork and Fiverr in the private sector really making headway. So, other than the stocking answer which is like law firms are slower to adopt everything like why you think law firms have been slower to adopt freelancing attorneys as a model?

Talitha Gray Kozlowski: So I think probably the biggest challenge is that the practice of law as you know involves really strident, ethical and professional restrictions and requirements that other businesses just simply don’t have to take into consideration.

Our power associations have effectively created state-sanctioned monopolies that have made it a barrier to some technology to really changing the way we think about the business model and thinking about how we practice. But what’s started to come to fruition are number of new and interesting marketplaces and new companies that have spent time working their way through the ethical requirements so that law firms and attorneys can now utilize the services of freelancers and still be ethically compliant and not run into the buzzsaw with the bar associations.

So, I think that the biggest hurdle these days is helping attorneys to rethink their business model and to take a moment from being superstar attorneys and to think about how they’re going to generate revenue, and to give consideration to these new resources that are available that do comply ethically and allow them to take advantage of this incredible resource that has been available to other businesses for quite some time.

Jared Correia: Yes, all right, so that’s a good segue that you make, they are like the practical considerations here because one side of it is like lawyers are always worried about ethics roles, right, and we’ll dive into that a little bit later on.

But there’s also this like mindset change, the fact that you’re adopting a new style of business, so if this is a continuum, and you can tell me if you don’t think it is, where law firms start by adopting freelancers for non-substantive work and then move to freelancing lawyers, how does that work in terms of on-boarding in a law firm?

Talitha Gray Kozlowski: So, I think there is some truth to this idea of a continuum. Certainly, I think firms that have started outsourcing their receptionists to companies like Answer 1, for instance, are more —

Jared Correia: Yeah, oh very nice, podcast sponsor, points for you, you have done your homework.

Talitha Gray Kozlowski: I am a long time listener.

Jared Correia: Well, done. I love that.

Talitha Gray Kozlowski: But, folks that have begun outsourcing those types of more administrative services I think are generally more comfortable with the idea of outsourcing and so I think just on a just sort of a comfort level it’s a little bit easier. But I do think outsourcing legal services is really the core business function of law firms and I think attorneys need much more education as to how they can do it, how they can do it ethically, how they can make money at it in order to begin adopting it.

I don’t think it’s as obvious to many attorneys whereas outsourcing your administrative services I think makes much more sense on a gut level to attorneys.

Jared Correia: Yeah, I think that’s totally true. All right, so say I am a law firm and I’ve hired out freelancers for other stuff and I’m like, I’m going to make the move, I’m going to hire some freelance attorneys, how does that process work?

Talitha Gray Kozlowski: So, I think there is a few things you need to first consider. Do you want to have a freelancer that is going to be able to go to court or are you looking for someone to just to do written product for you, for instance because those are very different functions and have very different ethical considerations.

Are you wanting to pay somebody on a flat fee basis so that you have much more control over the expense side or are you comfortable with an hourly — an hourly payment to them and those are really sort of I think important initial ideas to think through what is your need and what is your comfort level with how you pay for it.

And once you’ve thought through that, I think there’s a number of available services that meet all of those different requirements. The bar association’s practice management professionals at the bars have a lot of resources that are good places to go.

Obviously, this podcast is a fantastic place to go.

Jared Correia: Naturally, yes, and you have some stuff at your site LAWCLERK as well, I’m sure.

Talitha Gray Kozlowski: Yeah, so exactly. If you’re looking for highly skilled freelancers to provide services within your office, a quick Google search for freelancers would bring up companies like Montage Legal, which has been around for a number of years, very well-respected and provide freelance services that can actually be in your office.

If you’re looking to be entirely remote, for instance, and not looking to put people in your office but looking to have a broad network of freelancers and to do it all in the cloud, our service LAWCLERK is a great way to provide that. Similarly, again a quick Google search for appearance counsel, you’re going to find companies like Attorneys on Demand which provide with really limited intake information will connect you with appearance counsel in your city that’s able to make appearances.

(00:10:07)

So there are a number of resources as far as going to the Bar but just simply quick Google search for freelance attorneys, my freelance services are going to bring up a lot of these companies and you can pretty quickly vet who has experience and who has been providing these services and get a comfort level with which one fits your needs.

Jared Correia: Yeah, yeah. And one of the questions I want to ask you about which I just thought of as you’re saying this is, I think there’s this notion out there for attorneys who would consider using freelance lawyers, and I think this relates to like attorneys who get involved in document management products or document review projects with big law firms is like this idea that if you’re freelancing as an attorney, you like couldn’t cut it as an attorney who worked as an employee.

And my guess is that that is not your sense of the industry because you work with attorneys who want a freelance. Am I correct in saying that?

Talitha Gray Kozlowski: Absolutely. When we first started our platform, our expectation was that our freelancers were probably going to be first years at least at the outset and what’s been really incredible is that the vast majority of freelance attorneys we encounter are either folks that practice for 20 years and are retiring and want to do a little bit of work. We have a lot of military spouses which totally make sense, right, and just a lot of stay-at-home parents who ended up having multiple kids and decided trying to balance everything was too much and have this incredible skill-set and a desire to do work but not have a 9 to well, in a law firm 9 to 9 job. And so it really is remarkable, the talent that is available and interested in providing freelance services.

Jared Correia: Yeah, I think that’s a good point that you make and it kind of blows up a lot of people’s expectations. So I am going to freelance for a moment here and move us into a break. Here’s all the stuff that you should buy.

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Jared Correia: All right, thanks for sticking around. I don’t have anything better to do either, but I am here with Talitha Gray Kozlowski of LAWCLERK. We’re talking about freelance attorneys.

All right, so Talitha, you just talked a little bit about what types of people are doing freelance work and it’s probably different sorts of attorneys than most people who want to hire those attorneys think. I know we talked about the process of getting involved in this.

Let’s talk about some of the potential risks involved and you touched on this a little bit with the ethics because there’s nothing lawyers love more than throwing cold water on a fun new way of doing things.

So, you talked a little bit about how there is more leeway now in terms of ethics codes than there’s been before. Could you talk a little bit more about attorneys’ concerns either with remote staff or freelance staff and how they might be able to do this in ethical way?

Talitha Gray Kozlowski: Absolutely and while there I do think there’s a little bit more leniency in the rules, what I really think has changed is that there’s technology and companies that are really focused on ensuring the ability to freelance in an ethically compliant way.

And so the biggest issue or one of the biggest issues is running into the unauthorized practice of law and so what’s important to be thinking about as you’re engaging freelancers are what relationships are they having with you and what relationship are they having with your clients.

So, for instance, if your freelance attorney is providing written product for you, they’re not going to court, they’re not talking to the opposing counsel, they’re not talking to the client then really you may have a 20-year attorney who’s acting in the paraprofessional capacity, a glorified paralegal. And if you have these type of restrictions on the work they’re providing you don’t run afoul of the unauthorized practice of law and you can work with anyone from around the country.

So, I do corporate bankruptcy work, for instance, so having somebody in Nevada is not nearly as important to me as having somebody who has a good bankruptcy experience and big cases often come out of the Second Circuit so having a freelancer in the Second Circuit able to assist me is a much better position for me to be in.

Jared Correia: Yes, yeah that makes a lot of sense.

(00:14:57)

Talitha Gray Kozlowski: Right. And if you’re looking at sort of appearance counsel and things like that making sure you’re thinking about where are they barred, making sure they’re barred in your jurisdiction, but as long as you’re checking those boxes, you can make sure that you’re ethically compliant.

Another big thing to think about is confidentiality like how are you sharing information. So, a lot of the technology that’s being built and a lot of the freelance sites that help connect attorneys and freelancers are working to provide document repositories and management software to ensure that when you’re sharing documents that everything is secure and that everything is confidential, and that’s really an important thing to think about when you’re evaluating different sites is, is if you’re going to be sharing information how is it being sent and is it secure, is it maintaining our confidentiality requirements.

And, as you’re evaluating companies that’s going to be front and center on anybody’s page who’s making sure that they’re compliant.

Jared Correia: No, absolutely, and those are some good general tips for lawyers accessing technology vendors aside from those who provide free alliance attorneys.

All right. Let’s move on to another consideration. I think a lot of attorneys are thinking about when they think about hiring help who’s not a traditional employee, so tax considerations and classifications of independent contractors versus employees, that’s been in the news a lot lately and how do you think attorneys are dealing with that or in your experience how are attorneys dealing with that and what do you tell them?

Talitha Gray Kozlowski: So, again, if you’re working through like a Montage Legal or a LAWCLERK, we’re going to handle all of the tax reporting, so —

Jared Correia: Oh beautiful.

Talitha Gray Kozlowski: So it’s off your plate. We handle all of the 1099, so the freelancers et cetera, so you simply — if you’re working through one of our sites, it takes that stress and burden off your plate.

Jared Correia: Well, look at that. That was easy. All right, moving on. So last thing I want to ask you in this category about practical considerations is — and you touched on this before but I wanted to dig a little bit deeper into this like, I think one of the challenges for hiring freelance attorneys for law firms is because it screws up their traditional billing posture, right? So how are law firms billing for the work done by freelance attorneys and are there multiple ways that they’re trying to figure that out?

Talitha Gray Kozlowski: So, in multiple — and I had a really sort of interesting statistic, this surprised me when I read it.

Jared Correia: I love stats, give me.

Talitha Gray Kozlowski: 69% of the law firms in the 2017 Altman Weil Survey reported that they were shifting work to contract temporary lawyers and that in doing so it “resulted in a significant improvement in firm performance”. So —

Jared Correia: Oh good. Good, good.

Talitha Gray Kozlowski: Yeah, pretty remarkable that you’re having such a significant number of attorneys that in this last year are starting to engage contract attorneys and certainly wonderful to hear that it’s a positive economic impact but —

Jared Correia: Yes, yes.

Talitha Gray Kozlowski: So, I think people are doing it in several ways. I think a lot of folks are billing out their attorney, their freelancers on an hourly rate. So the Supreme Court has unequivocally stated that paraprofessionals can and contract attorneys can be billed out at reasonable market rates.

Now obviously reasonable is subject to your jurisdiction in competitive rates but as long as you are billing your freelance attorneys’ rates out consistent with what you would bill a paralegal or an associate out, the Supreme Court has been clear that that’s permissible.

Jared Correia: Can’t get better than that, right?

Talitha Gray Kozlowski: Right, absolutely. There are some states like Texas for instance that require that you identify in your engagement agreement that you utilize contract attorneys, freelance attorneys, but that’s simply a disclosure in your engagement agreement and then you’re able to bill out just like you would an associate.

So, I think that’s probably the most frequent way we’re seeing people generate a revenue off of utilizing freelance services.

Jared Correia: That makes sense, how about anybody using alternative fee methods to do this?

Talitha Gray Kozlowski: So, yes, what’s interesting is we’ve been seeing in a couple of ways. One, attorneys are doing a lot more of flat fee appellate work because if you know that you’re going to pay $2,000 for the initial draft of a brief to a freelance attorney that gives you much easier visibility or much clearer visibility into what you’re ultimately going to bill the client for an appeal. So, you can have a much greater comfort level with flat feeing projects.

So, I think it’s a great way as all of our clients are demanding certainty and pricing and demanding more rates.

Jared Correia: Yes, yes.

Talitha Gray Kozlowski: It’s a great way for firms to have more comfort level doing that. So I think it helps retain clients as well as make sure that when you do provide those flat fee that you don’t end up on the wrong side of it.

Jared Correia: Talitha, you did an excellent job making it through that gauntlet. Now the rest of the show is going to be softball questions, okay?

Talitha Gray Kozlowski: I support that.

Jared Correia: Good, good. Now, while I look for my sandals, listen to some more words from our sponsors.

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Thanks for coming back. I just want to take a moment to say that Salted Caramel Roasted Chickpeas are my jam. Now, let’s get back to Talitha Gray Kozlowski of LAWCLERK, who’s talking with me about incorporating freelance attorneys into the practice of law.

So, we talked about one aspect of this, which is fee setting. Let’s talk more broadly. So, for law firms that are starting to use freelance attorneys, how are they changing their business models generally to accommodate for that? And if so, if they’re doing that, what sort of things are they trying to accomplish by doing that and let’s leave fee setting aside because we just talked about that.

Talitha Gray Kozlowski: So, one of the things we hear a lot, particularly with solos and small firms and certainly something that my firm has experienced is that, you spend two or three years training an associate, getting them up to speed and then they leave to head to a greener pasture whether it’s hanging their own shingle, whether it’s going to a bigger firm or being taken away with the promise of a bigger check.

But, that’s one of the really big challenges though being a small firm because that really has a dramatic impact on your overhead, and so what we’re seeing is that firms are instead of maybe hiring associates when they get solely a big case and running into concerns about having to subsequently terminate them or concerns over constant, this just constant turnover of associates, what they’re doing is effectively engaging a team of freelancers.

So instead of having one associate maybe they have three or four freelancers that they work with on a pretty frequent basis. So the freelancers learn their — learn how they write, they learn their approach to cases, they effectively gain some of the benefits you would have training an associate.

But without all of the fixed overhead and without when you have without the issue of if that associate leaves, you’re left destitute because you have three or four or five people that you’ve been working with. So I think it really — it provides a lot of flexibility to firms as far as how they’re going to structure, are they going to be two partners and one associate or are they going to be two partners with five freelancers and that really provides just I think a lot of flexibility in how they engage in their practice.

Jared Correia: Yes and because small firms especially have a lot of divergence and income in terms of what they’re making for any given month having that flexibility is important. So, let’s finish up by asking some questions about solo and for small firms specifically like I think it’s tempting in those environments for lawyers to just evolve into this.

I do everything on my own strategy and it’s easier for them in some ways even if it’s harder in the long run, so how and why is it better for attorneys to hire freelancers than to do it themselves or to make another internal hire? Solo and small firms I’m talking about.

Talitha Gray Kozlowski: Yeah, absolutely. So a couple of things. I think often solo attorneys run into the issue of a good client comes in and they’ve been doing litigation work with them for years and they say, hey, I need a residential lease and you certainly have the ability to do a residential lease and you’re just going to have to spend some time researching it and thinking about it.

So you spend six hours doing a residential lease because you want to keep the client when you could have paid $200 and have somebody who writes them in their sleep do it for you. That’s not a good use of your time because time is money as an attorney, so —

Jared Correia: All right, so speed, that’s a good advantage.

Talitha Gray Kozlowski: Yeah, absolutely, and bringing in this additional subject matter expertise because you can take advantage of these skills. Again, you could do it yourself but that’s just not the best use of your time and it ultimately is not the best use — the best way to generate a profit.

The other thing is really I think flexing up and down with cases. There’s 24 hours in a day and I think by you engaging freelancers, solo attorneys and small firms have the ability to take on bigger cases because while they may still work a 10-hour day, you can effectively work a 30-hour day if you have the use of freelancers, and it lets you bring in these bigger cases without saddling yourself with permanent overhead that can be challenging when that big case concludes.

Jared Correia: Got you. Okay, those are three good answers, all right. Last practical, technical, legal question. So here’s a $60,000 question, so how could small law firms and solo attorneys use freelancers to grow their practice because if a solo or small firm attorney is not looking to become the next great American novelist, they want to grow their practice.

Talitha Gray Kozlowski: So I think it’s a number of ways. One if you’re not doing all of the work yourself, you’re able to be out there marketing, you’re out there in generating more clients.

(00:24:58)

I think as attorneys, many of us often sort of get stuck in the grind and if you’re spending 10 hours drafting a motion, you’re not out there generating business and making the contacts you need to make. So, if you outsource that first draft of your motion, you now have five, six, seven hours that you could be out there marketing that before you would have been at a desk.

And you’re still generating a profit off of it because you’re still able to build that freelance attorney with an additional reasonable rate. So, you may be paying them $100 an hour and you may be billing them out at $50 an hour. So you’re still making a profit and giving yourself significant time to continue generating business.

So it really is a great way to grow your practice without saddling yourself with significant overhead.

Jared Correia: Well done. Now, you live in Las Vegas.

Talitha Gray Kozlowski: Yes.

Jared Correia: And you practice in Las Vegas, what’s your favorite television reality show set in Las Vegas?

Talitha Gray Kozlowski: Oh, it has to be ‘Pawn Stars’.

Jared Correia: Okay, good choice, that’s great. I like that one, ‘Counting Cars’ I think is good too and as a follow-up question, how big of a fan of the Golden Knights are you following their Stanley Cup run?

Talitha Gray Kozlowski: Oh huge. It’s been really remarkable how it really brought this whole community together after the October shooting and it’s just — it’s been really, really incredible to see everybody rally around the team but I had the luxury of going to two of the playoff games and —

Jared Correia: Oh, very nice.

Talitha Gray Kozlowski: And just absolute blast and we can’t wait for next year.

Jared Correia: Over/under on the number of bobbleheads you have on your desk, three.

Talitha Gray Kozlowski: So I don’t have that many bobbleheads but ask me how many shirts I have?

Jared Correia: Okay, are you ready? Over/under on how many shirts you have in or around your desk, 17?

Talitha Gray Kozlowski: We’re getting close.

Jared Correia: Oh, really, really? No, are we talking like jerseys or are we talking just random shirts?

Talitha Gray Kozlowski: Oh just — you have to have the garb for the game so you have the t-shirt, the shirt, the skirt.

Jared Correia: Oh, well, wow, all right, so you are legit, 20+, 20+, really?

Talitha Gray Kozlowski: That’s probably closer in the ballpark.

Jared Correia: Oh my God. Well, I have a lot of shirts around my home but some people choose to call that laundry but you have like legitimate fan going where. Awesome. All right, I think that’s probably enough of my meandering. So, this will do it for yet another episode of The Legal Toolkit. We’ve been talking with Talitha Gray Kozlowski of LAWCLERK about freelancing lawyers.

Now, I’ll be back on future shows with further insights into my soul, the soul of America and the legal market.

If you are feeling nostalgic from my dulcet tones; however, you can check out our entire show archive anytime you want at legaltalknetwork.com.

So, thanks again to Talitha Gray Kozlowski of LAWCLERK for making an appearance as my guest today.

All right, Talitha, tell everyone how they can find out more about you and about LAWCLERK?

Talitha Gray Kozlowski: Wonderful. We are available at lawclerk.legal and any questions can be directed to [email protected] and we hope you check us out and give us a try.

Jared Correia: Check out LAWCLERK, look for Talitha at the Golden Knights’ games and at marathons around the country. Thanks again to Talitha Gray Kozlowski of LAWCLERK for appearing on the show today.

Talitha Gray Kozlowski: Thank you, it’s been wonderful.

Jared Correia: Finally, thanks to all of you out there for listening. Feel free to go about the rest of your day as you normally would.

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Outro: Thanks for listening to Legal Toolkit, produced by the broadcast professionals at Legal Talk Network. Join host Jared Correia for his next podcast covering the current business trends for law firms.

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