Subject to the restrictions set out below, most legal work is now deregulated so there is nothing to stop anyone setting up their own paralegal law firm, regardless of how much legal training or experience they have (a fact which worries us!).
Paralegal law firms usually adopt one of the following "corporate vehicles":
1. Sole practitioner: this is a paralegal who does not incorporate a company and does not go into partnership with somebody else (although they may have someone working for them as an employee). They are self-employed.
2. Partnership: this is where two or more paralegals decide to work in partnership (as distinct from a situation where one paralegal employers another). They then have a legal partnership.
3. Limited Liability Partnership (LLP): this is a special type of company, incorporated and registered at Companies House. Although it is a limited company it is structured in such a way to mimic a partnership. LLPs are very popular with solicitors and other professional services businesses'.
4. Limited company: a standard private company incorporated at Companies House.
All of the above are typically referred to as "firms" although technically only partnerships are really firms.
A paralegal law firm (that term being used to distinguish it from a solicitors' law firm) can call itself a law firm.
Anyone can, in theory, offer any form of legal service provided that the work is not:
1. A reserved activity - i.e. work which is statutorily reserved to one or more of the eight groups of lawyers regulated under the Legal Services Act 2007. The main reserved activities are the right to conduct litigation (i.e. bring, defend or be otherwise represent a client in a court action); rights of audience (i.e. the right to present a client's case before the court); certain elements of the conveyancing and probate registration procedures and witnessing certain documents.
2. Immigration advice or assistance. Paralegals can do this work, and many do. However it is an offence to do so without first being registered with the Office of the Immigration Services Commissioner. In other words, immigration work is regulated.
3. Work which is covered by the Compensation Act 2006. For full details of what work is covered and in what circumstances please visit http://www.justice.gov.uk/claims-regulation
4. Legally aided. In some areas, most notably criminal law and family law, much of regular work is covered by legal aid. Although paralegals would be entitled to do the work privately (subject to reserved activity restrictions) they would not be able to receive reimbursement from the Legal Services Commission under the legal aid scheme unless they were an approved provider. This is not technically a restriction on paralegals doing such work but in practice few clients will want to go to a paralegal and pay themselves for work that they could go to a solicitor and get done for free.
Free explanatory leaflet
To download and explanatory leaflet about the restrictions in setting up your own paralegal practice please click here.
Whilst we applaud and support ambitious, confidence and determined people who want to run their own legal practice, they do need to be aware that all legal practitioners, including paralegals, tend to be held to very high standards by the courts, trading standards departments etc.
The courts etc are very opposed to people doing their “training on the job” where that training is not closely monitored every stage by an experienced supervisor. In other words, anyone wanting to run their own paralegal firm will be expected to get it 100% right, 100% of the time from day one/client number one. No credit will be given for the fact that the paralegal is at the beginning of his/her career and therefore very inexperienced. The courts etc (and us for that matter) think it is deeply unprofessional for legal practitioners to use their early clients as "practice". Real people with real problems deserve more than being used as a d-i-y training programme.
The legal services market is not like most businesses. For example, in the fashion world customers expect to get a different quality product and service depending on whether they go to Jaegar, the Gap or Primark. The price they pay has a direct influence on the quality, depth, breadth and speed of the service they receive. This does not apply in the legal world/to legal services. Clients (and trading standards and the courts and regulators) will expect paralegal practitioners to give exactly the same level and quality of service as a solicitor with his/her own practice.
So what standard of service does a solicitor give? Well, it varies widely of course, but solicitors are not allowed to set up their own practices until they have:
(a) passed a law degree or GDL
(b) passed the LPC
(c) done a two year training contract
(c) had a minimum of three years’ practice experience; and
(d) completed a minimum of three years’ worth of continuing professional development training obligations.
All of that implies a pretty high level of service expectation!
Of course paralegals are not solicitors, and should not be equated with them. What tends to happen in practice is that paralegals specialise in a particular area, become expert in it through prolonged work experience and then set up their own business exploiting that expertise. The key point here is that they have already gained that expertise and experience - they're not purporting to provide legal advice having just done a law degree or even a practice and procedure course.
Anyone looking to set up a paralegal law firm ought to think about sticking to the area where they have expertise and, if necessary, rejecting or outsourcing work opportunities in those areas where they are not personally competent. For example, many barristers can now be approached by paralegals under the public access scheme.
Part of the reason why specialisation is a good risk-management tool is because when you know an area you also get to know the peripheral issues that crop up and which you need to watch out for. By way of example, paralegals can do non-contentious (i.e. non court-related) divorce work. But anyone doing divorce work would need to know a lot more than just the practice and procedure of conducting a divorce. To give their client a proper level of service they would need to know at least enough tax law; child-care law; contract law; trust law and property law to be aware of when they were an issue that needed to be considered. That consideration can be outsourced, but the paralegal would need to know enough to recognise when such issues might arise.
As most legal work is deregulated, there is nothing stopping you immediately setting up your own paralegal law firm. However, if you don't already have sufficient experience or training then you need to think carefully about what level of service you can actually offer, and whether you are leaving yourself open to potentially crippling negligence claims.