You state that you want to start your own paralegal service. Your business would include drafting of legal documents for law firms and the general public, filing documents with the appropriate agency and payment of the appropriate filing fees. You would also represent persons directly in negotiations.
By law, paralegals are not allowed to directly represent persons in legal matters. A business that directly represents the general public in legal matters is engaged in the unauthorized practice of law (or UPL), which is a felony. Setting fees for legal matters is also reserved for duly licensed attorneys. For a non-lawyer to do the same is to engage in the unauthorized practice of law. Preparing legal documents for the public is also reserved for duly licensed attorneys and to “draft” legal documents for the general public without working under the direct supervision of a licensed attorney is to engage in UPL. Opening a “forms” practice that provides standard legal forms for the general public, may also be engaging in UPL by simply choosing or recommending a particular form. Working as a freelance paralegal under the direct supervision of a duly licensed attorney is not UPL. Representing persons in disputes or negotiations may or may not be UPL, event it that representation does not involve money settlements. And direct representation of a person in legal matters is reserved for duly licensed attorneys.
Simply filing a document with a clerk or other appropriate person and/or paying fees for the filing of such document does not constitute UPL. The simple act of presenting a document for filing, whether in person, by mail or online, is not normally the practice of law but a simple administrative matter. If a legal representation is directly made, an opinion directly given or a signature to an official document is made, that is where UPL might come into the picture. Simply conveying a document from point A (the attorney) to point B (the clerk or other official) is a transportation issue.
Yes, contract paralegal fees can be recovered as part of a settlement or trial verdict. Any paralegal work performed on a case that the attorney is seeking recovery of attorney’s fees, can be included in the amount being sought to be recovered. Of course, there are many types of cases that do not allow for attorneys fees to be recovered. If it is a case where the statutes allow the recovery of attorney’s fees, then the attorney can include a contract paralegal’s work performed on the file. For further explanation, refer to the Gill Savings case* and the Paralegal Definition and Standards here Both paralegals and attorneys should read and become familiar with the Paralegal Standards that were approved by the Paralegal Division and by the State Bar of Texas Board of Directors.
*Gill Savings Association v. International Supply Company, Inc., 759 S.W.2d 697 (Tex. App.- -Dallas 1988, no writ). Gill Savings was a case of first impression in Texas regarding recovery of paralegal fees as part of an attorney’s fee award.
Working as a freelance paralegal (offering services to and under the direct supervision of a duly licensed attorney) is not contrary to the Unauthorized Practice of Law.
Paralegals must always identify themselves by name and title on any business correspondence they send. This includes email, faxes (and fax cover sheets) as well as regular “paper” letters or documents. It matters not to whom the letter is addressed or by whom it was requested; if it is business correspondence or documentation on which the paralegal’s name appears, the paralegal’s title must also be included. This applies to business cards and letterhead on which the paralegal’s name appears.
Contact the Chair of the Professional Ethics Committee, Paralegal Division, State Bar of Texas, firstname.lastname@example.org if you have an ethics question.
A person convicted of a felony offense may work as a paralegal in the state of Texas but is precluded from holding membership in the Paralegal Division of the State Bar of Texas.
Once you become aware of UPL or other fraudulent activities, you have a duty to report such behavior to the appropriate authorities. To do otherwise is to knowingly assist in the behavior.
In most cases, paralegals are not exempt from overtime under the Department of Labor guidelines. For more information on the portion of the labor code that addresses this, go to http://www.bls.gov/ooh/legal/paralegals-and-legal-assistants.htm and http://webapps.dol.gov/elaws/whd/flsa/overtime/p42a1.htm.
An ethical wall is a device by which a paralegal helps to preserve and protect the confidences and secrets of a client and avoid conflicts of interest pertaining to a client. Paralegals are not in a position to determine whether a potential conflict is of concern and should let their supervising attorney make that determination. Freelance and contract paralegals have a particular responsibility to keep up with the cases on which they have worked and the parties and attorneys involved to avoid possible disqualification of an attorney for whom they may work in the future. In any event, a paralegal is obligated to inform the supervising attorney of the existence of any possible conflict. See Canon 7.
When a firm hires a paralegal who formerly worked for opposing counsel or an opposing client, the entire firm should be notified that an ethical wall is to be erected around the paralegal and that no one may: (1) discuss the case in the presence of the paralegal; (2) allow the paralegal access to any documents, including keeping files locked away from any cabinets to which the paralegal would normally have access; and (3) engage in any discussions with the paralegal about prior work on the case or work his or her previous firm may have done. These precautions are necessary to avoid the firm’s possible disqualification in the case. Texas case law is clear that it is presumed that a paralegal receives confidential information while working on a case. See Phoenix Founders, Inc. v. Marshal, 877 S.W.2d. 834 (Tex. 1994). See also In Re American Home Products Corporation, 985 S.W.2d. 68 (Tex. 1998).
Tex. Disciplinary R. Prof. Conduct 1.01 requires that a lawyer provide “competent and diligent representation” to a client. According to Texas Ethics Opinion 396 “the offers and counter-offers that constitute realistic bargaining for settlement, the judgment of the defendant’s attorney as to when and how much should be offered, and of the Plaintiff’s attorney as to the adequacy of the offer, is itself a measure of competence. The client is entitled to this full measure of competence from his attorney in the bargaining process, and to the benefit of his attorney’s analysis and recommendation concerning all offers of settlement. After the full disclosure and recommendation from the attorney, the burden of decision then shifts to the “client.” Therefore, it would seem that paralegals are precluded from negotiating settlement agreements.