oduce a reasonable as a meeting with a 7. You are a paralegal manager in a small- to medium- fore the 10:00 A.M. sized firm. The firm administrator asks you to prepare a es and asks you to proposed income budget for your department of six legal e. You reluctantly assistants. You are not required to do an expense budget, s at the end of the as this is handled by the administrators and the accounting office is. Suddenly, department. From past years, you know that you must sit down with each of the paralegals and discuss billable hours, hourly rates, and so forth. You do not relish this much, because the firm has consistently pressed for more and more y through the billable hours. Thus, this topic can be somewhat touchy for you as a manager. Below is the information you obtained to our and must help you. Also, note that time-to-billing percentage is fig- ou think that ured at 95%, and the realization rate is also 95%. be eligible to Paralegal #1 typically works for one of the firm's general s amount. litigators. Because of her extensive background in this area, cement, so do her hourly charge is about $90. However, during trial and trial preparation, her hourly charge is usually about $100. You figure that She figures that about 40% of her time will be spent either because if in trial or preparing for trial. About 10% of her time is spent or a partner- traveling to and from trials, finding witnesses, and so on. Her travel time is billed at $60 an hour. She is a very hard worker, ined that its the realiza- and although she billed 1900 last year, she is requesting that her billable hours be lowered to 1800. You tentatively agree. 0 a month. Paralegal #2 has recently been given a new assignment: to work almost exclusively on insurance defense cases. His typical hourly billing rate was $85. However, you know that the insurance company, he will primarily be working for, will only pay a maximum of $75 an hour for paralegal time. In addition, the insurance company is extremely picky about $50,000; its invoices and absolutely refuses to pay for anything even Budget a remotely close to secretarial functions. The paralegal states he increase. thinks that 1750 is a reasonable number of billable hours, o of the considering his present salary. You figure that, based on your experience, the insurance company will either reasonably be or unreasonably question about 40 hours that he bills. You reduce your estimate by this amount just to be safe. our Paralegal #3 handles workers' compensation cases. 00 Unfortunately, these cases are almost all taken on a con- tingency basis. The firm typically recovers 25% of these types of cases. You estimate that the firm will receive about $600,000 in revenues from this gross part of its practice. ability You also note that about one-third of this is usually allo- orated cated to the work of the paralegal. not Paralegal #4 works mainly in the probate area. She typically receives about $70 per hour for her work. You note that although she billed more than 2000 hours last year, she did not take any vacation and took very little time off. Your conversation reveals that she is going to take three weeks off for an extensive vacation and that she may need to take an additional week off for medical reasons. Paralegal #5 is new to the firm. From your past experi- ence, you do not want to burn him out by putting too many billable hours on him at first. You also recognize that he will have many nonbillable hours during the first several months due to staff training and general unfamiliarity with the firm. You budget him for 1600 hours. He will be a rover, working for many different people, and thus his hourly billing rate is hard to estimate, but you budget $70.00 an hour. Finally, Paralegal #6: yourself. You have many admin- istrative responsibilities. You would like to set a good exam- ple, so you budget yourself at 1400 hours. You bill at $90 per hour. You are responsible for coordinating the efforts of the legal assistants under you, for handling personnel- related issues, and many other duties. You also remember client. that you are to take a greater role in marketing this year trust a and that approximately 160 hours of your time will be culate nonbillable while you handle this function