The Real Cost of a Paralegal: In-House, Virtual and Outsourced Compared

Start With the Salary

The U.S. Bureau of Labor Statistics put the median annual wage of paralegals and legal assistants at $61,010 in May 2024, or $29.33 an hour. Pay varies widely by city, experience and practice area: experienced paralegals in large metropolitan markets and specialist fields earn well above the median.

Add Benefits and Payroll Taxes

Wages are not the whole compensation cost. In the BLS Employer Costs for Employee Compensation survey, benefits, which include employer payroll taxes, paid leave, insurance and retirement contributions, make up roughly 30% of total compensation for private-industry workers. On a $61,010 salary, that puts total compensation at around $87,000 a year, or about $42 for each of 2,080 paid hours.

Then the Costs That Do Not Appear on Payroll

• Office space, furniture and equipment for another seat.
• Software licenses: practice management, document management, research, e-signature and AI tools.
• Recruiting: advertising, agency fees and the partner time spent interviewing.
• Training and onboarding before the new hire is fully productive.
• Turnover: when a paralegal leaves, the firm pays the recruiting and training costs again.
• Idle time: paid hours during holidays, leave and quiet weeks when there is not enough work.

The Number That Matters: Cost per Productive Hour

Divide the total annual cost by the hours of useful work the firm actually gets. A paralegal who costs $95,000 a year with overhead and does 1,500 hours of productive work costs about $63 per productive hour. If the firm only has steady work for 1,000 hours, the cost rises to $95 an hour. Use your own figures; the point is that utilization, not salary, drives the true cost.

Virtual Paralegals

Freelance and agency virtual paralegals, US-based or overseas, are paid by the hour or on a monthly retainer. The firm pays only for work done, with no benefits, space or equipment, though it still spends time on onboarding and supervision. Rates vary widely with location, experience and specialty, so compare quotes for the same defined task.

Legal Process Outsourcing

An LPO provider supplies a team rather than an individual, which means cover for holidays and sickness, capacity for busy months and a second person to check the work. Offshore providers in India can charge a fraction of US rates, and the time difference means work sent in the evening can be back in the morning. ABA Formal Opinion 08-451 permits outsourcing, including overseas, if the firm supervises the work, protects client confidences and, where confidential information will be shared, obtains the client's informed consent.

Which Model Fits Which Work

• Hire in-house for steady, full-time volume, client-facing work, in-person tasks such as court filings and hearings, and roles that need deep knowledge of the firm.
• Use a virtual paralegal for a predictable part-time load in your own time zone, such as calendar management or client follow-up.
• Outsource defined, document-heavy tasks that come in waves: bankruptcy petitions, deposition summaries, medical chronologies, trademark searches, cite-checking and document review.
• Many firms combine them: a small in-house team that handles clients and the court, supported by an outsourced team for volume work.

What Prodigy LPO Costs

Our hourly work starts at $8 an hour, repeatable tasks can be priced at a fixed fee, and a dedicated team member who works your hours in your systems is available monthly. Every piece of work is drafted with AI where it helps and checked by a qualified lawyer. Send one real task as a free sample and compare the result, and the cost, with your current approach.