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Setting up a Paralegal Practice – some areas to consider - National Association of Licensed Paralegals

Setting up a Paralegal Practice – some areas to consider

Amanda Hamilton, CEO of National Association of Licensed Paralegals
Amanda Hamilton
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As the cost-of-living crisis continues to bit, more and more Paralegals are setting themselves up in practice in order to offer vital legal services direct to consumers. With experienced solicitors and barristers charging upwards of £235 per hour[i], many people are now turning to Paralegals. Paralegals can do much the same as a solicitor or barrister (with a few exceptions) but for a fraction of the cost. If you have been considering setting up a paralegal practice, now is a good time. But before you do so, here are some dos and don’ts.

The following advice and suggestions may assist in helping you to avoid the most common pitfalls and may help you to decide whether to proceed towards a career as a professional paralegal.

Dealing with Naysayers

Paralegals are not statutorily regulated. So, you may come up against people who tell you that anyone can call him/herself a ‘Paralegal’. They will say it is not necessary to gain any training or qualification to carry out paralegal services. This is technically true, but in practice, it’s not accurate.

Some of these may be law graduates who, for whatever reason (cost, lack of training contract etc.), haven’t got their professional qualifications to become a solicitor or barrister.

The best way to deal with naysayers like this is to get qualified. Do a paralegal qualification and get some experience before you consider starting a paralegal practice.

Also, bear in mind that you will be handling delicate legal matters for your clients and therefore you will have to consider the possible consequences if something were to go wrong. Gaining knowledge of academic Law and practice is essential to give you and your client, confidence.

Choose what type of paralegal practice

If you’re reading this and planning for the future, now is a good time to consider the area of law you wish to practice in. Practical experience is the only way to really see if you will like a particular specialism, or you would like to run a general practice. Don’t forget that you do not have to work for a legal firm. Any firm with an element of legality to the work they do is likely to have some sort of legal department. NALP has members in every sector, from law firms to football clubs.

If you are considering starting a paralegal practice in the near future, make use of the experience you have already gained. If you have practiced in multiple legal areas, which did you enjoy the most, and can see yourself practicing in the future?

What company structure?

So, you’re ready to start…but do you carry on your business in your own name, in partnership with other paralegals or incorporate as a limited company and use another name?

This is entirely up to you but be careful: There are duties you must comply with if you set up your business as a company. For example, you need to submit company accounts each year, and this may be burdensome (especially if you are just starting out) and costly. For this, you need to employ an accountant and probably a bookkeeper.

As a sole practitioner, you can work under your own name and do not have such legal obligations. However, you would need to submit your annual tax return each year and be subject to income tax on your earnings.

The advantage of setting your business up as a limited company is that your financial obligations may be limited if something goes terribly wrong.

For further advice and assistance on the financial aspects of setting up in business, it is recommended that you get independent advice. Talk to an accountant.

Reassuring your first clients

Remember that your clients are consumers of legal services. They want to know that the person offering legal assistance is qualified and competent to do so. It would also help if you were a member of a membership body such as NALP which has been a Paralegal organization for thirty years and is well established in the legal sector.

Membership of such a body will give you kudos and confidence and will, more importantly give your potential client confidence that you know what you are doing. Membership is also confirmation that you have been vetted by the organization and have to abide by its rules, and can be sanctioned if something goes wrong.

License to Practice: being a member of NALP entitles you, subject to the requisite qualifications and/or experience and fulfillment of eligibility criteria, to apply for a License to Practice in the areas of law in which you can provide evidence of experience. Again, this means that NALP has done its due diligence on you and thoroughly vetted you and your credentials. You can see the eligibility criteria here.

Make sure you are not Holding Out

You should ensure that there is no inference in any marketing for your business, whether via a website of Facebook Page, that you are a solicitor or barrister. This is what is known as ‘Holding Out’ and is illegal. So, in all your marketing you must make it clear that you are a paralegal and not a solicitor or barrister. Even if you do not mention this specifically, you may be held accountable if consumers can make an assumption.

You must also be very much aware that there are certain activities you are unable to perform. You must know these ‘reserved activities’ (as defined by S12 of The Legal Services Act 2007) back to front and ensure that you do not undertake such activities, making it clear in any contract for services with your client, what this means, and what these activities are. For example, you cannot buy and sell property for a client. This requires the services of a solicitor or Licensed Conveyancer who is regulated through the Council for Licensed Conveyancers (CLC)

Apart from the ‘reserved activities’, you can operate in much the same way as a solicitor, e.g. you can operate as a Paralegal Firm and have partners.

Finally, setting up your own Paralegal practice can be very rewarding – but do make sure you follow the advice above to give both your clients and yourself the expertise, confidence and protection that you and they deserve.

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

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