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The day of the $200 billable paralegal hour may not be far off in New Jersey. The median hourly rate at which a sampling of 21 large and midsized firms bill out their paralegals’ time is $120, and rates range from $65 to $195, according to a Law Journal survey. What’s more, paralegal time is making up a growing portion of legal bills, as both firms and their clients have warmed to the idea that charging for nonlegal services is both reasonable and thriftier than staffing a case entirely with lawyers. When a firm bills $100 an hour for a paralegal, for instance, instead of $150 an hour for an associate, clients generally view that as prudent. On the law firm side, since paralegals are paid far less than associates, the return on cost is far better. The paralegal rates compiled compare to an average of $235 per hour and a range of $135 to $400 for associates at the state’s largest firms, according to a Law Journal survey last year. As paralegals take on more and more billable tasks previously done by associates, their expertise and billing rates are becoming hierarchical. Some firms maximize paralegals’ billable hours by assigning them their own administrative assistants, to whom are delegated nonbillable tasks, says Robert Denney, a Wayne, Pa., consultant. Charging for paralegal time, while not a new phenomenon, is still an acquired art, and lawyers admit their rate-setting is far from scientific. “We’re all over the place, depending on volume discounts, newness of the case,” says one attorney who did not want his firm named. He adds that paralegals working for different lawyers in the firm are billed out at different rates. Lawyers typically base their paralegal billing rates on what they have heard competing firms are charging. “There’s not a lot of forethought into what law firms will charge for attorneys, and likewise there’s not a lot of thought what they’re going to charge for paralegals,” says Edward Poll, a law firm management consultant in Venice, Calif. “Most of them see what the market is,” says Poll. What’s more, firms fail to review their rates on a regular basis. “Very few firms understand what it costs them to operate on a per-attorney basis or a per-paralegal basis,” Poll says. Pitney at the pinnacle Of the 21 firms that provided their paralegal rates, Florham Park’s Pitney Hardin charged the highest, with an average rate of $158 and with labor and employment paralegals at the high end of $120 to $195 range [see chart]. The next highest-charging were Ballard Spahr Andrews & Ingersoll’s Voorhees office ($153), Wolff & Samson in West Orange ($153) and Newark’s McCarter & English ($150). At the other end of the scale were Methfessel & Werbel, Edison ($70); McCusker, Anselmi, Rosen, Carvelli & Walsh, Chatham ($80); and McElroy Deutsch, Mulvaney & Carpenter in Morristown ($98). The surveyed firms generally said the range of billing rates reflects the complexity of tasks performed and seniority of personnel. At Cole, Schotz, Meisel, Forman & Leonard in Hackensack, where paralegal billing rates range from $100 to $150 per hour, the difference mainly depends on experience of the staff member, but the type of work performed is also considered, says a spokesman. For example, residential real estate closings, which the firm performs chiefly as a courtesy for clients who use it for other business, are billed at the bottom of the scale. Firms weigh other factors. Paralegals may bill different hourly rates to different clients based on prenegotiated terms or charge new clients more than longtime ones. At smaller firms, the same paralegal might bill at different rates depending on the complexity of various tasks performed, while larger firms tend to have enough staff to avoid such circumstances. The $120 median hourly rate gleaned from the 21 firms surveyed compares with a $108 paralegal rate for the Newark area and a $149 rate for the Philadelphia-southern New Jersey region in a report on paralegals published in July by Altman-Weil Inc. of Newtown Square, Pa. The Altman-Weil report studied paralegal billing rates nationwide and reported a nationwide average of $151 and a New York City average of $173. The Altman-Weil study also found that New Jersey paralegals bill fewer hours than their counterparts elsewhere and earn less. The average New Jersey paralegal billed 1,175 hours and earned $53,909, while the nationwide averages were 1,340 hours and $61,134. New Jersey firms charge more for paralegal time than their Florida counterparts, according to a Florida Bar study published on Aug. 15 in The Florida Bar News. In that state, 8 percent of respondents had rates of $120 or more; 8 percent had rates of $101-$119; 26 percent had rates of $81-$100; 29 percent had rates of $61-$80; 12 percent charged $41-$60, and 17 percent charged $40 or less.

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