Five Things a Law Firm Should Know About PEOs
- Business Tips

Five Things a Law Firm Should Know About PEOs

After growing your law firm locally, the next logical thing is to expand to other locations to double the profits. However, a business expansion is no mean feat, especially where you are eyeing potential markets across the national border. It can be a complex procedure for law firms, which is why you need a reliable expansion partner to do so successfully and compliantly. That is where a PEO (Professional employer organization) comes in. 

A PEO can be an invaluable partner to help you navigate your law firm expansion strategy. A PEO is a form of co-employment that offers full-service human resource outsourcing. In this arrangement, the PEO manages many personnel administrative functions for a company, including payroll and benefits management.

Here are five things that you should know about PEOs and how you can utilize their expertise and experience to establish your law business in new locations.

PEOs allow you to operate without a legal entity.

Ideally, you are required by law to register a business in every country that you want to operate. Working with a PEO, however, allows you to bypass this and start operating without incorporating a legal entity. In addition, this eliminates the need for the time-consuming process of clearing with various bureaucracies and figuring out foreign legal requirements, which allows you to enter the markets quickly.

Additionally, you can reduce the risk associated with establishing a business in foreign countries with a PEO. It is not guaranteed that your law firm will be accepted in other locations. When it proves hard to gain traction in some areas, you can easily withdraw from those countries without the risk of incurring a serious financial loss.

PEOs offer payroll assistance.

You know that payroll regulations vary from country to country as a law firm. If you have expanded to several locations, you would be required to keep a payroll for each country. This goes without saying that it can be quite complex and time-consuming. Moreover, it gets more hectic if you decide to outsource to a number of vendors. Adopting a global payroll helps centralize all the payrolls in one platform.

Additionally, when you outsource it to a PEO, it becomes less complex. A global PEO gives you access to global HR experts to assist with payroll management. This ensures that your payroll is accurate, timely, and compliant with the local payroll regulations in each country.

PEOs ensure HR compliance.

HR compliance spans from ensuring payroll regulations to regulations governing hiring practices in each country. Moreover, they vary in every jurisdiction and keep changing due to different factors such as politics, a global pandemic, and more. While you may be in a position to understand the complex and sometimes complex HR regulations, keeping up with all the changes can be quite time-consuming. Insisting on doing it in-house can take up valuable time you should be using to grow your law practice in these countries. 

Keeping up with regulations updates regarding hiring practices, dismissal claims, employee classification, tax filing, and the like is what PEOs do best. Outsourcing your HR function to a PEO eliminates the task of keeping up with changes and updates from your plate. As a result, you can concentrate on roles that need your attention most without worrying about local compliance.

PEOs make global recruitment easier.

PEOs have extensive networks and impeccable recruitment capabilities to find top talents for their clients across different industries. To grow your law practice in various countries, you need to find the best associates to help you carry out your vision. But, you can agree that hiring internationally isn’t the same as hiring locally. You need to consider the different hiring practices, ensure global compliance with the contracts, and more. Leaving the recruitment to a PEO means one less thing to worry about. Moreover, you can enjoy faster onboarding of new employees, which can translate to a faster expansion.

PEOs offer access to competitive employee benefits.

PEOs pull together their clients’ employees, allowing them to negotiate for better employee benefits packages. This means that it puts you in a position to offer better employee benefits, something that you might otherwise not be able to do with your growing law firm. The good thing is that this presents you as an ideal employer so that you can attract the best talents. In addition, it works well in motivating your workforce, which is crucial in building a positive culture.

Ethics of law firms using PEOs

A recent New York ethics opinion offers recommendations for law firms considering hiring a professional employer organization (PEO). The question for New York attorneys is whether employing a PEO is ethically permissible in accordance with the New York Rules of Professional Conduct, including: 

  • The Duty to Preserve Confidential Information
  • The Prohibition against Sharing Fees with Nonlawyers.

The Committee allows law firms to utilize PEOs as long as the company:

(1) does not allow the PEO to interfere with the lawyer’s ethical obligations to exercise independent professional judgment or supervise other lawyers and nonlawyers at the firm; 

(2) does not allow the PEO to access confidential information belonging to the firm’s clients; 

(3) complies with the obligation to avoid conflicts of interest; and 

(4) does not compensate the PEO in a manner that violates prohibitions against sharing fees with nonlawyers.


If you are considering expanding your law firm, doing so through a PEO poses some benefits. First, you need to know that a PEO can offer you payroll assistance, help with recruiting employees, and give you access to robust benefits. Additionally, a PEO can act as your employer of record to allow you to operate without a legal entity and ensure that you operate compliantly in each country you set your foot in.

Five Things a Law Firm Should Know About PEOs

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