How Law Firm Overheads Affect What You Should Charge as a Freelance Paralegal

The Mistake Most Freelance Paralegals Make

When a freelance paralegal or unqualified legal professional tries to set their rates, the most common approach is to look at what a qualified solicitor earns as a salary and charge something less. If a newly qualified solicitor earns £35,000 per year, the reasoning goes, then an experienced paralegal should charge something in that ballpark — perhaps £25,000–£30,000 equivalent.

This logic is fundamentally flawed, and it consistently leads to undercharging.

The problem is that the comparison is between two entirely different things. A solicitor's salary is what they receive after the law firm has extracted its costs and profit. It is not what the client pays. The client pays the solicitor's charge-out rate — which, for a newly qualified solicitor, might be £150–£200 per hour. The salary is roughly one-third of that.

The Rule of Thirds Explained

The Rule of Thirds is a well-established framework in legal practice management. It describes how a law firm allocates the revenue generated by a fee-earner:

• One-third goes to the fee-earner as salary and employment costs
• One-third goes to the firm's overheads (rent, insurance, support staff, technology, professional indemnity)
• One-third goes to the firm as profit

This means that when a client pays £200/hour for a solicitor's time, approximately £67 reaches the solicitor, £67 covers the firm's costs, and £67 is profit for the partners.

When you work directly with a client as a freelance paralegal or unqualified legal professional, the second and third thirds do not exist in the same form. You have your own costs — professional indemnity insurance if you carry it, home office expenses, software subscriptions — but these are a fraction of a law firm's overhead structure. And there is no partner extracting a profit margin from your labour.

What This Means for Your Rate

If we apply the Rule of Thirds logic to a freelance engagement, the appropriate rate is not the salary equivalent of a paralegal — it is the charge-out rate equivalent, adjusted downward to reflect the client's cost saving from not paying law firm overheads.

Consider the following example:

The freelance rate of £55–£70/hour represents a genuine saving for the client compared to instructing a law firm, while fairly compensating the paralegal for their skill and experience. It is not the salary equivalent — it is the market rate for the service, adjusted for the direct-engagement model.

Calculating Your Specific Rate

The precise figure depends on several variables: your practice area, your years of experience, your location, and the complexity of the matter. A paralegal with 10 years of family law experience working in London should charge more than one with 3 years of experience working in the North of England.

Our UK Legal Professional Rate Calculator takes all of these variables into account and produces a personalised rate with the reasoning behind each component — including the overhead adjustment. The result is a figure you can explain to a client in plain English, grounded in market data they can verify independently.

The Confidence to Charge What You Are Worth

The most common reason freelance paralegals undercharge is not ignorance of the market — it is a lack of confidence in justifying the rate. When you can explain exactly why your rate is what it is, referencing Law Society guideline data and the Rule of Thirds methodology, the conversation with a client becomes straightforward rather than awkward. You are not asking for a favour. You are presenting a market-rate proposal.