Outsourcing is all the rage, and bankruptcy lawyers are swiftly realizing the power of hiring an outside professional to get the job done effectively and affordably. Because consumer bankruptcy practice has such low profit margins for many, the question of cost is important.
In the past I have hired people with core computer expertise but who needed to be trained in handling consumer bankruptcy petitions, rather than seeking out a certified virtual bankruptcy assistant. I’ve done this so that I could provide my VBA with detailed instructions regarding my process, confident that they are coming to the task without any preconceived notions or understanding about what should and should not be done.
Give the fact that I have typically taken on people without well-developed skill sets specific to bankruptcy petitions, my cost has been significantly lower. Whereas many VBAs will charge $350-$400 to draft a Chapter 7 or Chapter 13 petition, my cost has been a fraction of that.
In return, I pay in training time. For me, that lower cost is worth it as a means of ensuring that I have someone who does things exactly as I like them to be done.
That is not meant as a knock to the profession (I believe them to be valuable additions to any bankruptcy lawyer’s practice management efforts). Rather, it goes to underscore the fact that with a virtual bankruptcy assistant – as with any other outsourced professional – you must determine your goals prior to making a hiring (and, hence, a pricing) decision.
I recognize that many lawyers prefer to have a VBA who understands the process more intuitively. For those lawyers, the question is one of price for value. For that reason, you need to look carefully at not only what YOU charge for your bankruptcy cases, but whether the costs associating with hiring a particular VBA are such that you or your staff will be freed up to make that much money or more on other cases.
For example, if you can hire an office staffer for $12 an hour and that person can blow through a petition in 3 hours, the cost-per-petition is approximately $72 (double the cost of the gross wages to account for such ancillary costs are payroll taxes and benefits paid to the employee, as well as the cost of equipment and desk space). Factoring in the cost of downtime between petition preparation tasks, it may work out to be more in line with $175 per petition for the employee to handle it in-house.
Does a VBA cost you more than $175, or less? Is it worth it for you financially to bring on a VBA? Only you can answer that question, and you must do so before deciding on outsourcing your petition preparation.
What a great discussion topic!! I am a certified virtual bankruptcy assistant and have been serving attorneys for almost 3 years. I have worked with many attorneys who do not understand their cost per petition. At the same time, I work with many new attorneys (or attorneys who are adding BK to their practice) and their costs are unknown. Yes, a staffer may be able to knock a petition out in 3 hours. What has not been factored into this particular example and are critical steps to consider in the overall process is an additional 3 hours on the phone with the clients obtaining missing and/or incomplete intake information and 1 hour for proper due diligence. On average, another 4 hours which now totals 7 hours per petition (7 * $12 hr = $168). I would suggest another $200 for office overhead, equipment, software, supplies, and training. Now the average cost per petition is $368.What do you do when your staffer calls in sick or has scheduled vacation during a case? If you have back-up staffers to step in, then your cost has just doubled because now you're paying 2 staffers per case.How do you factor case-overload or overworked staffers? The risks are client satisfaction, attention to details, and case turn-around-time. How do you determine the value/cost associated with a lost client or the added costs associated with filing amendments? Are you paying overtime to keep up with your case load?In my experience, depending on the type of service an attorney is seeking, fees are adjusted accordingly. It is all about understanding the cost of doing business and finding the right CVBA (certified virtual bankruptcy assistant) to meet your needs.
Jay, I agree with your assessment that each bankruptcy lawyer must determine their needs first and I understand your need to train someone yourself. Other things to ask a VBA are about their experience, work style, billing, strategy for handling multiple clients and their preferred communication style. I look forward to reading more of your posts.
Jay, I agree with your assessment that each bankruptcy lawyer must determine their needs first and I understand your need to train someone yourself. Other things to ask a VBA are about their experience, work style, billing, strategy for handling multiple clients and their preferred communication style. I look forward to reading more of your posts.