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126 N.J.L.J. 1306
November 15, 1990
Modified In re Opinion
No. 24,
128 N.J. 114 (1992)
COMMITTEE ON THE UNAUTHORIZED PRACTICE OF LAW
Appointed by the New Jersey Supreme Court
OPINION 24
Independent Legal Assistants
This Committee has conducted an investigation to determine
whether paralegals or legal assistants, who perform their services
outside the environment of employment by a law firm, are engaged in
the unauthorized practice of law. The issue has become significant
because there is an increasing number of paralegals and legal
assistants who have organized to offer their services independent
of employment by lawyers. A number of complaints with respect to
paralegals engaged in the independent practice have been held
pending this Committee's investigation and the promulgating of this
opinion.
The Committee sought written comment from interested
individuals through a notice published in the New Jersey Law
Journal. That request resulted in the Committee receiving
information from a variety of paralegal groups, associations,
state-wide organizations, and the like. The information received
was consistent in the following two respects:
1. All of the material received expressed positive
views as to the value of work being performed by
paralegals; and
2. All of the material expressly or implicitly
recognized that the work of paralegals must be done
under the supervision of attorneys. None of the
written materials submitted focused on the
distinction between the paralegal who works as an
employee of an attorney or a law firm on the one
hand, and the paralegal who functions as an
independent contractor offering services to
attorneys generally on the other hand.
Paralegals or legal assistants (the terms appear to be
synonymous) fall into one of three categories:
1. The paralegal who works as an employee of an
attorney or law firm;
2. The paralegal who offers legal assistance directly
to the public; and
3. The paralegal who is not employed by an attorney or
a law firm but who, as an independent contractor,
offers services only to attorneys.
It is clear from the material submitted that questions
presented by the first two categories present easy answers. The
paralegal employed by the attorney works under attorney supervision
and functions appropriately. The paralegal who offers services
directly to the public has no such supervision and is engaged in
the unauthorized practice of law. It is the third category -- the
independent contractor who offers services to attorneys -- which
presents the more difficult problem and whose activities have been
the focus of this Committee.
Following receipt of the written information, the Committee
determined to hold a hearing. Testimony was invited through a
notice published in the New Jersey Law Journal for several weeks in
advance of the date of the hearing. The hearing was well attended.
The witnesses were primarily either paralegals or legal assistants,
some engaged in independent practice and some employed by
attorneys. The issue on which the Committee sought testimony was,
again, whether paralegals or legal assistants who practice
independently of employment by attorneys are engaged in the
unauthorized practice of law.
There are a number of paralegal organizations. Some were
represented at the Committee's hearing. One such organization, the
National Federation of Paralegal Associations, has undertaken to
prepare a listing entitled "Paralegal Responsibilities." That
document states that it is a "compilation of discrete activities
that can be and are performed by paralegals in various specialties
of law." The list "is not meant to be all inclusive, but is an
example of the types of assignments that can be delegated to
paralegals." There follows a 19-page listing of activities which
includes drafting of many kinds of legal documents from motions to
avoid liens in bankruptcy to shareholder and buy-sell agreements in
corporate work. The list includes almost all activities except
court appearances -- in the collection field, the list includes
appearing in court and conducting examination on garnishment and
execution. The all-encompassing view of the work properly
delegable to a paralegal is instructive when viewed in the light of
the problem, discussed below, inherent in the work of independent
paralegals.
Many of the witnesses took as a starting point the definition
of legal assistant promulgated by the Board of Governors of the
American Bar Association:
A legal assistant is a person, qualified through
education, training or work experience, who is
employed or retained by a lawyer, law office,
governmental agency or other entity in a capacity
or function which involves the performance, under
the ultimate direction and supervision of an
attorney, of specifically-designated substantive
legal work, which work, for the most part, requires
a sufficient knowledge of legal concepts that,
absent such assistant, the attorney would perform
the task.
That definition contains three elements of significance to the
Committee's inquiry:
1. The legal assistant should be "qualified through
education, training, or work experience."
2. The legal assistant is a person "who is employed or
retained by a lawyer."
3. The legal assistant is a person who does work
"under the ultimate direction and supervision of an
attorney . . . which work . . . requires a
sufficient knowledge of legal concepts that, absent
such assistant, the attorney would perform the
task."
The ABA definition does not provide a simple answer to this
Committee's inquiry. When it defines a legal assistant as a person
who is "employed or retained by a lawyer", it appears, without
more, to recognize that the independent contractor legal assistant
who is retained rather than employed would fit its definition.
Whether the assistant is employed or retained by the lawyer,
however, the requirement of supervision by the attorney is clear.
All of the witnesses who practice as independent contractors
testified that they offered their services only to attorneys and
did not make their services available to the public. All of them
stated, therefore, that, whether engaged as an employee of an
attorney or whether retained as an independent contractor, the work
done was under the supervision of the attorney and, therefore, did
not constitute the unauthorized practice of law. See footnote 1
1
It became apparent from the testimony of the witnesses that,
although the independent paralegals who testified offer their
services only to members of the bar and consider themselves to be
working under the supervision of attorneys, there are problems
inherent in that independent practice of the paralegal or legal
assistant's work. Most significant has to be the absence, in the
case of the retained independent contractor paralegal, of the
inquiry as to the paralegal's credentials that would always be
conducted when the attorney hires the paralegal as an employee.
The hired paralegal would necessarily be subject to the interview
process by the hiring attorney to determine that the person's level
of training and experience is such to justify the attorney turning
over the substantive legal work to the paralegal. The retaining of
an independent paralegal for a single transaction, however,
presents neither the necessity for the interview process nor the
day-to-day supervision of the paralegal's work. Because of the
ongoing, day-to-day relationship between the employed paralegal and
the attorney, the opportunity for observation of the paralegal's
skills and for the training as well as direct supervision, are
clearly at the highest possible level.
While the ABA definition imposes the requirement that a legal
assistant be a person "qualified through education, training or
work experience", no law or regulation would prohibit a person
lacking that qualification from holding himself out to the Bar as
an independent contractor offering to do paralegal work for
attorneys. While most of the paralegals who testified do possess
education, training or work experience, and many of them
recommended that paralegals should have certain minimum amounts of
experience or education or a combination thereof, all of the
witnesses recognized that there is no supervisory body which would
prevent untrained or otherwise unqualified persons from working as
independent paralegals. While it may be suggested that there is no
difference in levels of supervision by the attorney in the case of
the employed paralegal as against the independent contractor
paralegal, common experience and evidence presented to the
Committee demonstrate that the contrary is true and, in the case of
the independent contractor, the supervision is far less and,
unfortunately in all too many cases, non-existent.
Rule of Professional Conduct 5.3 promulgated by the Supreme
Court of New Jersey requires attorneys to maintain reasonable
efforts to insure that the conduct on non-lawyers (retained or
employed) is compatible with the attorney's professional
obligations. See footnote 2
2
That rule makes the lawyer responsible for the conduct of a
retained or employed paralegal that would violate the Rules of
Professional Conduct if (i) the conduct is ordered or ratified by
the lawyer; (ii) the lawyer has failed to make reasonable
investigation that would disclose prior instances of misconduct by
the non-lawyer; or (iii) if "the lawyer has direct supervisory
authority over the person and knows of the conduct at a time when
its consequences can be avoided or mitigated but fails to take
reasonable remedial action." It is the view of the Committee that,
where there is an employment relationship between the paralegal and
the attorney, the attorney will have that direct supervisory
authority and will be in a position to take steps to avoid or
mitigate the consequences of improper bad actions by the paralegal.
If the relationship is one of independent contractor, however, the
lawyer cannot have the same direct supervisory authority over the
paralegal and is unlikely to learn of conduct in a way that would
permit him to avoid or mitigate its consequences. RPC 5.3, by
limiting the attorney's responsibility to those circumstances
wherein he knows of conduct and can avoid it, makes it clear that
the protection afforded by the Rule will not extend to the
independent paralegal with the same force and effect as it will to
the employed paralegal. Since there is no body maintaining files
or information with respect to misconduct by paralegals, it is
difficult to determine how a lawyer could comply with RPC 5.3(c)(3)
by making "reasonable investigation" in instances of past
misconduct.
As matters presently stand, there is no mechanism that would
regulate the conduct of the paralegal other than the supervision of
the attorney for whom the work is done, which, more often than not,
may be sporadic, uneven or non-existent. That is demonstrated by
the following:
1. While there are a number of different associations and
organizations with which paralegals may affiliate, there have been
no standards or guidelines set down by any body with regulatory
authority to control and regulate the activities of independent
paralegals.
2. At least one New Jersey college provides an American Bar
Association-approved paralegal program and provides a Certificate
of Completion to successful candidates. A Bachelor of Arts degree
is a prerequisite to the obtaining of the Certificate of
Completion. Those requirements are applicable only to
matriculating students and it is clear that no law or regulation
imposes the requirement of obtaining such a Certificate of
Completion on those students who propose to practice.
3. Neither the State of New Jersey, any Bar Association, nor
any organization or affiliation of paralegals or legal assistants
provides for licensing procedure or any other procedure to regulate
and control the identity, training and conduct of those who engage
in the work. See footnote 3
3
4. While the ABA definition states that a legal assistant
should be "qualified through education, training or work
experience" which will serve as a guideline for its members in the
use of paralegal assistants, that requirement is not imposed or
binding upon a person who desires to engage in independent
paralegal practice. Most of the witnesses testified that they
believed there should be a requirement of a minimum number of years
of training or education to permit one to practice as an
independent paralegal. All of them agreed, however, that no such
requirement presently exists.
5. There is no paralegal association or organization which
functions in a way that can impose any uniform mechanism of
standards of ethics, disciplinary proceedings, and rules and
regulations to oversee the activities of paralegals. Those who
function as paralegals, therefore, do so pursuant to standards and
rules either of their own devising or of the devising of the
variety of different groups or organizations, none of which have
the power to impose adherence to standards or to control or
discipline those who do not adhere to standards.
Problems raised by the absence of direct supervision and
regulation of the independent paralegal are highlighted by the kind
of work being undertaken by some independent paralegals. For
example, one of the witnesses testified that she had become an
expert in probate matters as a result of experience in the probate
field and learned from that experience that many attorneys who do
probate work do not specialize in estate work and are generally
unfamiliar with the field. Many of those attorneys do not want to
refer their matters to attorneys who are specialists, but desire to
retain control of their files and clients. Accordingly, those
attorneys retain the witness to handle the estates that come into
their offices. She testified that she handles matters for
approximately forty-five attorneys. She stated that she
'ultimately takes full responsibility for making sure that I get
done what needs to be done and, believe it or not, that the
attorney gets done what he or she need to get done." She signs
correspondence for the attorneys, initialing it to make it clear
that she has written the correspondence. She states that she never
signs a letter "that contains a legal opinion, legal advice." She
does, however, prepare many of those letters for her attorney
clients and she has much client contact (Tr. at 24). See footnote 4
4
She handles
safe deposit box openings, takes clients to motor vehicle
departments to transfer vehicles, handles social security matters
for them. She charges the attorneys at the rate of $45 per hour.
She testified that she accepts work from many attorneys who have no
experience or training in estate or probate work. See footnote 5
5
Therefore, as
a result of her perceived expertise, she does all of the technical
estate and probate work for the attorney and the attorney who
participates in this practice and collects a fee over and above the
charges of the witness faces the possibility of ethical problems.
See, e.g., RPC 1.5(a).
Another paralegal described a different specialty which
permits her to provide a service for attorneys who do not have in-
house competence in that specialized area. She stated the
following:
On occasion a matter will come into the attorney's office in
a very specialized area of law that the in-house staff is
unfamiliar with. Rather than send their client away, the attorney
can call me to assist.
For instance, one of my specialties is bankruptcy law and of
late my work in assisting attorneys has been in that area. (Tr. at
69)
To the extent that paralegals such as the probate specialist
and the bankruptcy specialist are providing expertise to attorneys
who do not have that expertise in-house, their work demonstrates
that the concept of direct supervisory control by the attorney is
illusory. It seems highly unlikely that an attorney who does not
do estate work or bankruptcy work in his office would employ a
full-time paralegal to perform that work in the attorney's office.
There appears, however, to be some significant group of attorneys
who do retain the services of an independent paralegal to fill in
that area of specialty and expertise for the attorney that the
attorney does not have in-house. While the attorney who retains
that specialist paralegal may, on the surface, appear to have
responsibility for the work of the paralegal, it is difficult to
determine how that attorney can utilize reasonable efforts to
insure that the conduct of the paralegal, who is working in a field
unfamiliar to the attorney, will be "compatible with the
professional obligations of the lawyer" (RPC 5.3). Based on the
testimony and evidence considered by the Committee, the paralegal
admittedly is performing legal services in an area not included
within the attorney's range of expertise. It is difficult to see
how the lawyer can either order or ratify the paralegal's conduct
or provide that direct supervisory authority over the paralegal
which would permit the avoidance or mitigation of improper conduct
required by RPC 5.3. In these areas, the paralegal is becoming a
substitute for the attorney, not an assistant to the attorney, and
that is a situation which comes about because of the independent
nature of the paralegal's work relationship.
The nature of the work of independent paralegals presents
other problems. Those paralegals employed in an attorney's office
do prepare correspondence that is routinely reviewed and signed by
the attorney. The independent paralegals made it clear through
their testimony, however, that a much looser arrangement exists in
their practices with respect to correspondence and communication.
Some of the paralegals keep supplies of the attorneys' letterheads
in the paralegals' offices. The paralegals acknowledge that they
send out letters, signed in the name of the paralegal, but that
they do so without prior review by the attorney. In some
instances, the attorneys whose letterheads are used do not receive
copies of the letters from the paralegals. The potential for
misunderstanding by the public which may receive those letters, and
the absence of supervision by the attorney in the use of the
attorney's letterhead, is an example of the kind of problem that
the practice of the independent paralegal presents.
Conflict of interest is another area of concern created by the
practice of the independent paralegal. When a paralegal is
employed by a single law firm, conflict can be avoided through the
law firm's own techniques for avoidance of potential conflicts.
When the independent paralegal works for numerous law firms,
however, the possibility of being involved in situations of real or
apparent conflict must exist. One of the paralegals testified:
I realize and I have had instances where two
attorneys, an attorney involved in a contest [sic]
estate where we filed the complaint order to show
cause contesting an issue, and an attorney on the
other side has called me who happens to be my
client in other estate matters who is unable to use
me in this contest because I'm working for another
firm. And I've just said I'm sorry. You know I'm
working on the side that's filing against your
client. I certainly can't work on your side as
well. (Tr. at 33) (Emphasis added)
While the paralegal in that instance expressed a sensitivity
for the conflict, the appearance of and potential for conflict will
increase dramatically when independent paralegals offer their
services to multiple law firms to assist them in litigated matters.
Although the paralegal may be sensitive to avoid functioning for
two adversary attorneys in the same case, the potential for
conflict increases in the same magnitude as is represented by the
number of different law firms represented by the one paralegal.
Attorneys know how difficult it can be for their law firms to avoid
conflicts of interest when there are multiple attorneys working
within the same firm. The problem is exacerbated to a point which
may not be controllable when the relationships multiply by virtue
of a single, independent paralegal representing multiple law firms.
The Committee is sensitive to the fact that the practice of
law becomes ever more complex and that there is a need to provide
legal services to the public. Some of the witnesses who appeared
before the Committee expressed the view that the work of the
independent paralegal would have the result of bringing legal
services more extensively to the public and at fee levels that
would be more affordable because of the lesser charges involved in
the work of the paralegals. It is the view of the Committee that
the need to bring services to the public and the need to provide
legal services at more affordable rates should not be met by
permitting legal services to be performed by non-lawyers who, by
virtue of their independent status, cannot be subject to the kind
of direct supervision by attorneys that is otherwise required.
There certainly are differing levels of complexity in the legal
issues and matters to be handled by attorneys and paralegals. When
the paralegal is employed by the attorney, the nature of the
employment relationship makes it possible for the attorney to make
the decisions as to which matters are appropriate for handling by
the paralegal and which matters require direct hands-on work by the
attorney. When the attorney and the paralegal are separated both
by distance and the independent nature of the paralegal's
relationship with the attorney, the opportunity for the exercise of
that most important judgment by the attorney becomes increasingly
difficult.
This is not to say that there are not matters that could be
handled by an independent paralegal with appropriate supervision by
the attorney contracting with the paralegal. The problem is that
the decisions as to what work may be done by the paralegal should
be the attorney's to make but the distance between attorney and
paralegal mandated by the independent relationship may result in
the making of those decisions by the paralegal or by default.
It is the view of the Committee, moreover, that the paralegal
practicing in an independent paralegal organization, removed from
the attorney both by distance and relationship, presents far too
little opportunity for the direct supervision necessary to justify
handling those legal issues that might be delegated. Without
supervision, the work of the paralegal clearly constitutes the
unauthorized practice of law. We found, from the testimony and
materials presented to our Committee, that the opportunity for
supervision of the independent paralegal diminishes to the point
where much of the work of the independent paralegal is, in fact,
unsupervised. That being the case, the independent practice by the
paralegal must involve the unauthorized practice of law. The fact
that some of the work might actually be directly supervised cannot
justify the allowance of a system which permits the independent
paralegal to work free of attorney supervision and control for such
a large part of the time and for such a large part of the work.
Without the direct supervisory control contemplated by RPC
5.3, the attorney who utilizes the independent paralegal might not
have professional responsibility for the paralegal's misconduct.
With the separation of the independent paralegal from the attorney,
both by distance and relationship, the ability of the attorney to
make reasonable efforts to insure that the paralegal's conduct is
compatible with the professional obligations of the lawyer must
diminish. The danger of legal work being done without appropriate
professional responsibility to the public increases to a point
wherein it cannot be condoned.
The attorneys who use independent paralegals are not free of
ethical problems. Where the specialized paralegal, for example
handling probate matters, charges an hourly fee to the attorney,
the attorney may well be put in a position to charge a fee to the
probate client which will constitute a percentage of the estate.
Most or all of the work will have been done by the paralegal.
Since the attorney is not sufficiently skilled in the area to
supervise properly the work of the paralegal, the attorney will be
compensated for work done by the paralegal that, because of the
lack of supervision, will constitute the unauthorized practice of
law. That presents a clear ethical dilemma created by the
existence of the independent paralegal. See footnote 6
6
Where the work of the
independent paralegal constitutes the unauthorized practice of law,
the attorney retaining that paralegal will be in violation of RPC
5.3(d)(2).
It is suggested that the availability of the independent
paralegal makes paralegal services available to the single
practitioner who might not be able to employ a full-time paralegal.
While there might be merit to making some of the paralegals' time
available to the single practitioner, that value does not, in the
opinion of this Committee, override the very real problem of lack
of supervision inherent in that relationship. There well may be
mechanical things to be done by the independent paralegal for the
single practitioner. Any part-timer could accomplish that kind of
work for the attorney without the risk of unsupervised work that is
created by the independent paralegal's distance from the attorney.
We are involved in this inquiry, moreover, with the work of a
legal assistant which the ABA defines as being "substantive legal
work" which "requires a sufficient knowledge of legal concepts
that, absent such assistant, the attorney would perform the task."
If the case is beyond the capacity of the single practitioner,
whether by virtue of complexity or sheer volume of detail, this
Committee does not believe that the problem is properly solved by
work done by the independent paralegal who cannot properly be the
subject of the kind of supervision that would be required. There
are alternatives: The work could be referred to a specialist
attorney or to a firm which has, in-house, the personnel to handle
the volume. This Committee finds, based on the presentation of
both documentary and oral materials to it, that the use of the
independent paralegal to do the substantive legal work which the
attorney would otherwise do, represents an inappropriate level of
delegation.
The Committee does not believe that the need for the supply of
legal services requires that the Bar utilize independent paralegals
whose work is unregulated either by an employment relationship with
the attorney or through any systematic body of regulations.
If there is an argument that legal services have not been
brought to the consumer over the past years, it is no answer to
that argument to permit those legal services to be performed by
persons not subject to uniform standards, not subject to training,
and who can work independently of the supervision of attorneys
which must be the keymark of paralegal work. The Committee
believes that the increasing number of attorneys entering the
practice, the availability of legal service programs, and the
availability of attorneys to do pro bono work can fill those needs
appropriately. It is inappropriate to suggest that there is such
a void in the providing of legal services at reasonable rates that
independent paralegals should move in to fill that void. At its
best, the Committee believes that the remedy of providing legal
services through the independent paralegal can create more harm
than the perceived ill which it purports to be designed to correct.
The Committee recognizes that the bringing of legal services
to the public must be an issue of continuing concern to the Bar.
We believe, however, that it is totally inappropriate to suggest
that legal services can better be brought to the public by a group
that is not subject to any kind of uniform educational, training,
professional or ethical standards.
For the reasons expressed herein, it is the opinion of the
Committee that paralegals functioning outside of the supervision of
an attorney employer are engaged in the unauthorized practice of
law.
* * *
Footnote: 1 1 No witness offered justification for the paralegal or legal
assistant who offers services directly to the public. That
practice was uniformly condemned and is not the subject of this
report.
Footnote: 2 2 RPC 5.3 reads:
With respect to a non-lawyer employed or retained by or
associated with a lawyer:
(a) every lawyer or organization authorized by the Court
Rules to practice law in this jurisdiction shall adopt and maintain
reasonable efforts to ensure that the conduct of non-lawyers
retained or employed by the lawyer, law firm or organization is
compatible with the professional obligations of the lawyer.
(b) a lawyer having direct supervisory authority over
the non-lawyer shall make reasonable efforts to ensure that the
person's conduct is compatible with the professional obligations of
the lawyer; and
(c) a lawyer shall be responsible for conduct of such a
person that would be a violation of the Rules of Professional
Conduct if engaged in by a lawyer if:
(1) the lawyer orders or ratifies the conduct involved;
(2) the lawyer has direct supervisory authority over the
person and knows of the conduct at a time when its consequences can
be avoided or mitigated but fails to take reasonable remedial
action; or
(3) the lawyer has failed to make reasonable
investigation of circumstances that would disclose past instances
of conduct by the non-lawyer incompatible with the professional
obligations of a lawyer, which evidence a propensity for such
conduct.
Footnote: 3 3 Efforts are being made in California to establish licensing
procedures. No licensing procedures have been adopted to date.
Footnote: 4 4 The page references are to the transcript of proceedings
conducted by the Committee on September 19, 1989.
Footnote: 5 5 Of necessity, under this scenario, the attorney cannot (and
does not) provide any supervision or control over her work or her
work product and, as a result, the witness is providing legal
services directly to the public which has been agreed by all to be
the unauthorized practice of law.
Footnote: 6 6 See, generally, the strictures against attorney collection
of improper forwarding fees and against attorney cooperation in the
unauthorized practice of law by lay persons. RPC 1.5 and RPC
5.5(b).
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