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Law Firms: Payroll Outsourcing Cost vs. In-House Hire (2026)
Payroll outsourcing for a law firm costs $45 per employee per month, all-inclusive, against an in-house payroll clerk at the $58,260 BLS national median before benefits and taxes. Live in 3 to 5 business days, with billable hours tracking and partner draw vs. salary configured at setup.
What the outsourced price includes for a law firm
Processing on your schedule, federal and state deposits and filings in every state with an employee, new hire reporting, direct deposit, garnishment processing, W-2s and 1099s, year-end close, and the law firm configuration for billable hours tracking, partner draw vs. salary, attorney bonus structures and IOLTA compliance. Corrections caused by the provider are the provider's cost, including amended returns. There is no per-run fee, no per-state fee and no year-end fee.
What the in-house price includes, honestly
A payroll and timekeeping clerk at the BLS OEWS May 2025 national median of $58,260, about $75,738 loaded, plus software, plus the cost of the errors one person makes alone. Employees holding a valid license to practice law who actually practice are exempt professionals, and the salary level and salary basis tests do not apply to them. Job titles alone do not determine exemption status; duties and pay must meet the regulations.
Break-even for law firms
At 50 employees outsourcing is $27,000 a year; at 100 it is $54,000. Both sit under the loaded clerk at about $75,738. Below about 20 employees the realistic comparison is with software rather than a hire, where the case rests on billable hours tracking rather than price.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Employees holding a valid license to practice law who actually practice are exempt professionals, and the salary level and salary basis tests do not apply to them. Job titles alone do not determine exemption status; duties and pay must meet the regulations. [DOL Fact Sheet #17D]
Read the full guide to how much payroll outsourcing costs, and the rest of the law firm payroll library.
Managed Payroll, Handled.
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Frequently Asked Questions
What is included in the outsourced payroll price for a law firm?
Processing, all federal and state filings, new hire reporting, direct deposit, garnishments, W-2s and 1099s, year-end close and the law firm pay code setup. No per-run, per-state or year-end fees.
What does a payroll clerk cost a law firm in-house?
$58,260 a year at the BLS OEWS May 2025 national median, about $75,738 with benefits and employer taxes, before software.
What does a payroll error cost a law firm?
Employees holding a valid license to practice law who actually practice are exempt professionals, and the salary level and salary basis tests do not apply to them. Job titles alone do not determine exemption status; duties and pay must meet the regulations.
What does managed payroll cost for a law firm?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Billable hours tracking, partner draw vs. salary and attorney bonus structures are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Law Firms. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Bureau of Labor Statistics: Occupational Employment and Wage Statistics
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