How to set up your own paralegal practice

Article
Amanda Hamilton, CEO of National Association of Licensed Paralegals
Amanda Hamilton

If you are planning to set up your own paralegal practice, delivering paralegal services direct to businesses and consumers, there are several issues to consider. These range initially from whether you have sufficient qualifications and/or experience, professional status, and demand to how to go about setting up your business including the dos and dont’s.

So, let’s stake a look at each in turn.

Do you have the necessary competency?

Although you may feel you have the knowledge to perform certain legal tasks and offer advice and assistance, it is important you are able to provide evidence to back this up. Clients want to be sure that the person handling their delicate legal issue is in fact competent to do so.

Being able to show your qualifications and/or work experience to date will help give clients that comfort. Although it is not necessary to have a recognised qualification, it will certainly help. It will ensure you are fully informed and it will give clients confidence too.

Even if you already have a number of years work experience, perhaps in-house at a large company, in the public sector, or within a solicitor’s practice, gaining an Ofqual recognised paralegal qualification will help to cement that experience and prove that you are competent to perform the work you are being asked to do.

There are various levels of qualifications and which one you choose will depend on how much experience you have. These qualifications start with an entry level qualification which is the Level 3 Award in Paralegal Practice (2 units of study) to the Level 3 Certificate (4 units of study) and finally the Level 3 Diploma  (6 units of study). There is also the Level 4 Diploma in Paralegal Studies (10 units of study) and the Level 7 Diploma in Paralegal Practice for those who already have gained a Law Degree (6 units of study).

Even if you do have a recognised qualification, it’s always best to keep your knowledge up to date (which you have to do if you have a NALP Licence to Practise) by completing CPD courses each year.

Protection – for you and your clients

Being a member of a professional body, such as the National Association for licensed Paralegals (NALP) is another way to give you extra kudos and credibility, and your clients confidence. It also offers both you, and them, protection.

Gaining a Licence to Practise from NALP, for example, shows that a level of due diligence has been performed to ascertain that individual’s experience and/or qualifications which have been thoroughly checked and scrutinised. In addition, the eligibility to gain a Licence to Practise requires the applicant to have PII (Professional Indemnity Insurance) and this gives any potential client confidence that you have the back-up should there be an issue.

Should there be a grievance, NALP can act as an independent arbiter ensuring you are not the victim of vexatious complaints, while also helping to ensure that the reputation of the paralegal sector is properly protected.

Being a NALP member also offers you the opportunity to get support and advice from highly experienced individuals within the organisation about your practice and career.

The demand

Before thinking about setting up on your own, you have to be sure that there is sufficient demand out there for your particular type of work.  Failure to do so means that you will not succeed in having a sustainable business. This means that you have to  know your market. It is important to have experienced the area in which you wish to work and to understand the services clients may want from you. Who are your potential clients? Where will you find them? What services will they want? Can you fulfil that need? How much competition is there? How will you set yourself apart?

Ensuring you understand the market and the demand is key to building a profitable business.

Case study:

A learner signs up for a Paralegal Studies qualification. It takes her two years to complete, after which she joins a criminal law firm. She works there for five years during which time she spots that there is a demand for legally qualified individuals to care for vulnerable clients during the criminal law process. She leaves the firm and sets up her own business assisting such clients. She qualifies as a police station representative, and after a period of time, she applies to the Bar Standards Board for Licensed Access in order to be able instruct barristers directly on behalf of her clients. She succeeds in her application. She now runs a very successful practice where she can provide continuity and a presence for her clients from the moment they are arrested right the way through to court proceedings if it gets that far.

Setting up the business

So, you have your professional membership and your Licence to Practise. What next? Should you incorporate your business straight away? Simple answer is no. The best way to test whether a business works is to commence as a sole trader. If it is successful enough after the first few years, then you could consider converting it to a limited company. However, it’s always best to get some independent financial advice from an accountant first in respect of the pros and cons of each type of business.

For example, an issue to consider if you were to incorporate your business is the cost, as it involves the requirement to get accounts drafted each year by a chartered accountant. On the other hand, one of the advantages is that you will have limited liability if something goes wrong, so make sure you get the proper advice before starting up.

Marketing and PR

In order to ensure your business is sustainable there should be consistent, and ongoing marketing. This can take the form of Search Engine Optimisation (SEO) e.g. ensuring your website (and you really should have one) is found easily on any search engine, to PR involving the publication of articles written by you in relevant magazines and websites, which will really help to get your name and expertise known.

What type of marketing you choose may well be determined by the kind of business you have (and want to have in the future) and what you like to do. For example, some people love posting on social media, other like to create webinars or newsletters, some prefer to write articles. Networking is also a good option to get your name and business known; it can be very effective, but it is a slow burner.

You also need to decide whether to outsource such expertise which in the first instance, is probably the best option as you can control the costs and it frees you up to do the work you love – being a paralegal. However, outsourcing does come with a financial cost, which leads quite nicely into the final element but perhaps the most important:

Finance

Clearly, in order to set up a business, whether as a sole trader or as a limited company, you need finance. Of course, you could do everything yourself; create your own website, post on social media, do your own PR, etc., but you may find that this is not only time consuming but also has an adverse effect on your business since the more you are working on marketing, for example, the less time you have to offer your services. At some point you will need help and this is where you need the finance. Some may say, it’s a chicken and egg situation as you need the business to earn the money to sustain the marketing but you can’t gain the business without the marketing! By starting small and building gradually you may be able to finance your growth from your earnings, but if not, then borrowing money from a bank could be the way to go if you can provide a proper business plan. There are government backed loans available too. But, once again, it’s always best to get proper independent financial advice first both in terms of what your business can afford, what it might need, and where to go to access that finance.

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Amanda Hamilton, CEO of National Association of Licensed Paralegals
Amanda Hamilton

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