How to ensure your paralegal business succeeds

If you are to have a successful business as a paralegal practitioner, in addition to qualifications, experience is essential. This does not have to be with a solicitor or barrister, because nowadays you can gain the relevant legal experience by working in a variety of different employment environments. Examples include local authorities, the National Health Service, charities, housing associations, HM Revenue and Customs, the Crown Prosecution Service and company in-house legal departments. In fact, anywhere that has an element of legality to the work that they do.

Once you have gained some knowledge of law and legal procedure, you need to decide whether you wish to specialise in one area of the law or would like to be a general practitioner. For example, you may have worked in a human resource department of a company and have studied employment law – this then may well be the area of law in which you wish to practice. Alternatively, you may have gained your experience in a busy solicitor’s firm dealing with an assortment of legal matters or cases (criminal law, small monetary claims, consumer rights, matrimonial matters, etc.) and, as a consequence, you may decide that you wish to become a general practitioner.

Regardless of the route you choose, there are a few things to consider.

Reserved legal activities

Reserved activities can only be carried out by those authorised by the Legal Services Act 2007, such as solicitors, barristers and chartered legal executives. This legal work that a paralegal is not authorised to do includes (among others): the right of audience, the conduct of litigation, reserved instrument activities (relating to the transfer of land) and probate activities, which can only be conducted by a solicitor or chartered legal executive or under the supervision of the same.

Fees and money

Paralegals are not allowed to take monies in advance or hold client money on account. Everything that a paralegal does should be agreed with the client beforehand and the fees should also be agreed before any work is undertaken. Once completed, the paralegal can invoice the client as agreed. There should be no surprises. If a fee is required in advance for something, then the client will have to pay for it themselves.

Holding out

Paralegals operating their own business offering advice and assistance to consumers must ensure that they do not hold out. This means, that they must not, either expressly or impliedly, give the impression to consumers that they are solicitors or barristers. For example: referring to yourself as a ‘lawyer’ is not technically incorrect if you are a qualified paralegal, but the inference to a consumer will probably be that you are a solicitor because they may not be aware that paralegals are lawyers. So, the only way around this is to expressly describe yourself as a paralegal or ‘paralegal lawyer’ and this must be stated in all marketing.

Client care

To ensure that paralegals have a sustainable business practice, not only should they adhere to all of the above, but they should also relay all of this in a client care letter together with any complaints policy and have all the information publicly available online. Hopefully, being fully compliant with the above will effectively negate any possible complaint.

How you provide paralegal services

A hugely important decision is how you carry out your business: in your own name; in partnership with other paralegals; incorporate as a limited company and use another name?

This is entirely up to you but be aware that if you set up your business as a company, there are duties you must comply with. For example, you need to submit company accounts each year, meaning you will need to employ an accountant and likely a bookkeeper too. 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. Before making a decision, seek professional advice and assistance on the financial aspects.

Amanda Hamilton is the patron of the National Association of Licensed Paralegals (NALP)
nationalparalegals.co.uk