What is a paralegal and when should your business use one?

Amanda Hamilton NALP

Business Leader Magazine recently interviewed Amanda Hamilton – the chief executive of the National Association of Licensed Paralegals (NALP) to ask what a paralegal is when your business should engage their services.

Can you give our readers an overview of the NALP?

NALP was established in 1987 as professional membership body for paralegals in order to promote paralegals as an independent profession, not only within the legal sector but also within commerce, industry and the public and private sectors.

NALP is also the only paralegal body that is recognised as a qualifications awarding organisation regulated by Ofqual (the government body that regulates qualifications in England & Wales). Via its awarding organisation NALP has developed bespoke nationally recognised paralegal qualifications at Level 3, 4 and Level 7.

In 2004, as the foremost self-regulatory professional body for paralegals in England & Wales, NALP introduced a system of Licensing for its high status members whereby on application, and in compliance with eligibility criteria, a NALP Member can gain a Licence to Practise, offering services to their own clients (provided they have Professional Indemnity Insurance in place).

What is a paralegal? And how are they different from solicitors?

A paralegal is an individual who is trained and educated to perform legal tasks but who is not a registered solicitor, barrister or chartered legal executive. A paralegal can do almost everything that a solicitor can do except ‘reserved activities’ (as defined by section 12 of the Legal Services Act 2007), which still remain the monopoly of solicitors. See below for more details on this.

When should a business seek aid from a paralegal?

This is difficult to assess since all business differ. However, wherever there is any legality to a task that needs performing, or advice that needs to be sought in relation to, for example, an employee or employment matters generally, a threat of being sued for money owing, or money that is owed to the business, or commercial contracts that need to be drafted or checked, a paralegal can step in.

What are ‘reserved activities’ and whose help should a business seek?

‘Reserved Activities’ are those that remain the monopoly of solicitors and are defined by Section 12 of The Legal Sevices Act 2007. They are as follows:

The exercise of a right of audience (representing a client in court) – this reserved activity is being eroded in practice since there is an increase in consumers representing themselves in court and, at the discretion of the Judge, a paralegal can step in to assist.

The conduct of litigation (the ability to conduct a case from start to conclusion on behalf of a client) – in practice, a paralegal can assist a client to do this themselves.

Probate activities (to handle a deceased person’s estate after they die and apply for a Grant of Probate on behalf of a client in order to distribute that persons estate according to their Will – a paralegal can assist an executor to do this themselves).

Reserved instrument activities (such as being able to draft a contract for sale of a property on behalf of a client – unless a paralegal is Licensed to do so by the Council for Licensed Conveyancers.

Notarial activities.

The administration of oaths.

As you can see from this list, there are very few areas in which a Paralegal is restricted. In respect of numbers 1, 2 & 3 a paralegal can assist and advise their client how to go through the process themselves, even if they cannot perform the task themselves on behalf of their client.

What alternatives are there to businesses that cannot afford the services of a solicitor?

Clearly, paralegals can offer access to justice at a reasonable cost. Solicitors’ fees tend to be on average between £150 – £350 per hour. Sometimes more if they are a prestigious firm and more again if a senior partner deals with any matter. Whereas, a paralegal may only charge between £20 – £80 an hour depending on the task in hand.

How has Brexit and political uncertainty worldwide affected the UK legal system?

At this point in time, it is difficult to assess. However, in reality, the English legal system (rather than UK, since Scotland (and Ireland) has a different system of law to England and Wales) has an excellent reputation around the world and many different states use the English Legal System as their preferential system of law should anything go wrong, for example in contracts.

What are the common mistakes start-up business make from a legal perspective?

This writer is no business expert but can only give an opinion from experience. It is important to know when you start a business who your demographic is and concentrate on that. Know your budget and create a strategic plan.

Also, be aware that stepping straight into incorporation has its financial and legal dangers since there are rules and regulations to comply with as a Director of a company, regarding accounts, and compliance with corporate documentation such as Articles of Association. My main advice would be to start-up as a sole trader, and when you know that you are successful and making a profit, then incorporate your business.

Be very aware of the legal responsibilities of being a director, and especially those pitfalls relating to being an employer. From this writer’s experience, there is never an easy ride when it comes to employees – it is vitally important to get your contracts of employment spot on.

When a company looks to scale up and expand what are the common mistakes?

Common mistakes of expansion – is to expand in the first place! But this of course, depends on what the business is!

It is quite common, when a business has been running for several years and is in profit, to consider expansion. However, expanding too quickly and widely can create its own problems.

Outsourcing is so underestimated. Keep your expenditure and overheads to a minimum. Only employ minimum amount of employees and if possible, outsource the rest. The other thing to possibly consider is franchising your business (if this is a possibility).

If expansion is the only answer, then ensure that every financial and legal detail is considered first, and is manageable. Experience has dictated that expansion has been the biggest reason why businesses fold.