Many bankruptcy attorneys wonder whether outsourcing petition preparation actually makes financial sense. Published claims vary widely, and none of them know your caseload, your fees or your staff. The better approach is to run the numbers yourself. This article gives you the structure. You supply the figures.
Step 1: Find your real cost per petition today
Write down, for a typical consumer case:
- Hours spent by you, a paralegal and any other staff, from intake to a petition ready to sign.
- The hourly cost of each person, including salary, benefits, payroll taxes, software and overhead, not just the wage.
- The time lost to rework, such as missing documents, corrections and amendments.
Multiply it out. Many offices have never done this and are surprised by the answer. It is also worth doing separately for Chapter 7 and Chapter 13 cases, because they usually take different amounts of time.
Step 2: Price the outsourced alternative
Ask two or three assistants for their fee per case type, and add your own time to review and to answer questions. Review time is easy to forget, and it is the most important number: if you spend almost as long reviewing as you would drafting, outsourcing is not saving you much.
Step 3: Count what capacity is worth
The comparison is not only cost per petition. Ask what you could do with the time and capacity you free up:
- How many consultations or new cases do you turn away or delay during busy periods?
- What is the average fee on the cases you could take on?
- What would it cost to add staff to handle the same volume, and how long would it take to hire and train someone?
Capacity is where outsourcing often pays most, particularly in seasonal peaks. See handling the tax-refund-season surge for how that works in practice.
Step 4: Consider the risks and how you manage them
Outsourcing is not free of risk, and these should go into the decision as costs:
- The need for a reliable review step on every file.
- Data security when documents travel outside your office.
- Your professional duty to supervise non-lawyer assistants, wherever they sit.
All three can be managed with a clear process; they are not a reason to avoid outsourcing, but they should be part of the calculation. Our guide to supervising a remote assistant explains how.
Step 5: Compare with hiring in-house
If the real alternative is a new employee, compare the full cost and the flexibility. An in-house paralegal gives you someone on site every day, which suits a steady high volume. A remote assistant is usually easier to scale up and down. We compare the two in virtual bankruptcy assistant vs. in-house paralegal.
A simple way to decide
- Choose one month of typical cases.
- Calculate what those cases cost to prepare in-house, using the figures from Step 1.
- Calculate what they would have cost with outsourcing, including your review time.
- Add the value of the extra cases you could have taken.
- Test the answer with a pilot: outsource a handful of cases and measure the real numbers.
The pilot matters more than any estimate. After a few cases you will know what review costs you, how many questions come back and whether the quality is there.
Next steps
Our free eBook for attorneys looks at the profit side of outsourcing petition drafting. When you are ready to try it, see how hiring a VBA works or request a VBA and start with a single case.
This article is general information about bankruptcy practice, not legal advice. Local rules, trustee preferences and state law vary, so confirm current requirements for your jurisdiction.
