Paralegal Today Ch.3-4

Attorney Ethics and Paralegal Practice

1. Duty of Competence— client suffers harm as a result of the attorney's (or paralegal's) incompetent action or inaction. a. May lead to a Negligence Lawsuit.: faulty research, missed deadlines, or mistakes in documents. b. Attorneys must Adequately Supervise Work 2. Confidentiality—All Information MUST be Kept in Confidence. a. Do NOT discuss client information with third parties. Breaches include unauthorized persons overhearing telephone conversations or personal comments, or e-mails being sent to parties not intended to see them. b. Client Confidences revealed ONLY in Certain Circumstances; Informed Consent, Disclosure Necessary to Client or to Prevent Harm to Persons or Property, or Court Order. 3. Attorney-Client Privilege— Some Client information is Privileged Information - Greater Protection 4. Conflict of Interest—Representation of a Client Injures the Interests of Another Client. a. If NO conflict of interest then, an attorney may represent both sides in a legal proceeding MUST Meet Following: neither party's rights will be injured both clients are aware of the conflict a both give informed consent to the representation. b. If there is a conflict of interest then, the attorney or paralegal must be "walled off" from the case— prevented access to files or case information. c. Client Consultation with an Attorney- A Conflicts Check NECESSARY

Should Paralegals Be Licensed?

1. General Licensing—establish minimum standards to meet in order to practice as a paralegal in the state. 2. Registration—Some states (Florida) encourage this; provides more visibility and professional recognition. Other states (California), have education requirements to meet before claiming to be a paralegal. 3. Direct Regulation—The pros and cons are being debated by the leading paralegal and paralegal education associations, state bar associations, state courts, state legislatures, and public-interest groups.

The Organizational Structure of Law Firms

1. Sole proprietorship—In a sole proprietorship, one attorney owns the business and is entitled to all the firm's profits. That individual also bears the burden of any losses and is personally liable for the firm's debts. 2. Partnership—In a partnership, two or more lawyers jointly own the firm and share in the firm's profits and losses. Attorneys who are employed by the firm but who are not partners (such as associates and staff attorneys) do not share in the profits and losses of the firm. Generally, partners are subject to personal liability for all of the firm's debts or other obligations. In many states, firms can organize as limited liability partnerships, in which partners are not held personally liable for the malpractice of other partners in the firm. 3. Professional corporation—In a professional corporation (P.C.), two or more individuals jointly own the business as shareholders. The owner-shareholders of the corporation share the firm's profits and losses (as partners do) but are not personally liable for the firm's debts or obligations beyond the amount they invested in the P.C

The Unauthorized Practice of Law

1. State UPL Statutes—look to court decisions 2. Prohibition Against Fee Splitting 3. Prohibited Acts—Paralegals should always make clear their professional status so clients are not confused. The consensus is that paralegals should not engage in the following acts: a. Establish an Attorney-Client Relationship b. Set Legal Fees c. Give Legal Advice or Opinions d. Represent a Client in Court (unless authorized) e. Encourage or Contribute to ANY Act that Could Constitute UPL.

Financial Procedures

1. Tiers of firms—Top-level firms, which are generally full-service firms in major cities, generally have the highest billing rates, followed by major regional firms. Boutique firms and others fill the needs of different groups of clients. 2. Fee arrangements—Types of fee arrangements include fixed fees, hourly fees, and contingency fees. Clients who pay hourly fees are billed monthly for the time spent by attorneys and other legal personnel on the clients' cases or projects, as well as all costs incurred on behalf of the clients. 3. Client trust accounts—Law firms are required to place all funds received from a client into a special account called a client trust account. This is to ensure that the client's money remains separate from the firm's money. It is important that the funds held in the trust account be used only for expenses relating to the costs of serving that client's needs. 4. Billing and timekeeping—Firms require attorneys and paralegals to document how they use their time. Because the firm's income depends on the number of billable hours produced by employees, firms usually require attorneys and paralegals to generate a certain number of billable hours per year. Double billing presents a major ethical problem for law firms.

The Regulation of Attorneys

1. Who are the regulators?—State bar Associations and the American Bar Association (ABA); model rules and guidelines relating to professional conduct. Others are State Supreme Courts, State Legislatures, and (occasionally) the United States Supreme Court. 2. Licensing Requirements—Licensed attorneys generally must be graduates of a law school and have passed a state bar exam and an extensive personal background check. 3. Ethical codes and Rules—Most states have adopted a version of either the 1969 Model Code of Professional Responsibility or the 1983 Revision, called the Model Rules of Professional Conduct, published by the ABA. 4. Sanctions for Violations— Attorneys may be subject to Reprimand, Suspension, or Disbarment. Additionally, attorneys (and paralegals) face potential liability for malpractice or for violations of criminal statutes.

Trust Account

A bank account in which one party (the trustee, such as an attorney) holds funds belonging to another person (such as a client); a bank account into which funds advanced to a law firm by a client are deposited. Also called an escrow account.

Limited Liability Partnership (LLP)

A business organizational form designed for professionals who normally do business as partners in a partnership. The LLP limits the personal liability of partners.

Professional Corporation (P.C.)

A corporation formed by licensed professionals, such as lawyers or physicians. The liability of shareholders is often limited to the amount of their investments. shareholder One who purchases corporate stock, or shares, and who thus becomes an owner of the corporation.

Fixed Fee

A fee paid to the attorney by his or her client for having provided a specified legal service, such as the creation of a simple will.

Employment Manual

A firm's handbook or written statement that specifies the policies and procedures that govern the firm's employees and employer-employee relationships.

Law Clerk

A law student working as an apprentice with a law firm

Contingency Fee

A legal fee that consists of a specified percentage (such as 30 percent) of the amount the plaintiff recovers in a civil lawsuit. The fee is paid only if the plaintiff wins the lawsuit (recovers damages).

Partner

A person who operates a business jointly with one or more other persons. Each partner is a co-owner of the business firm. managing partner The partner in a law firm who makes decisions relating to the firm's policies and procedures and who generally oversees the business operations of the firm.

Time Slip

A record documenting, for billing purposes, the hours (or fractions of hours) that an attorney or a paralegal worked for each client, the date on which the work was done, and the type of work done.

Forms File

A reference file containing copies of the firm's commonly used legal documents and informational forms. The documents in the forms file serve as models for drafting new documents.

Expense Slip

A slip of paper on which any expense, or cost, that is incurred on behalf of a client (such as the payment of court fees or long-distance telephone charges) is recorded.

Statute of Limitations

A statute setting the maximum time period within which certain actions can be brought to court or rights enforced. After the period of time has run, no legal action can be brought.

Legal Administrator

An administrative employee of a law firm who manages day-to-day operations. In smaller law firms, legal administrators are usually called office managers.

Office Manager

An administrative employee who manages the day-to-day operations of a firm. In larger law firms, office managers are usually called legal administrators.

Retainer Retainer Agreement

An advance payment made by a client to a law firm to cover part of the legal fees and/or costs that will be incurred on that client's behalf. A signed document stating that the attorney or the law firm has been hired by the client to provide certain legal services and that the client agrees to pay for those services.

Partnership

An association of two or more persons to carry on, as co-owners, a business for profit.

Staff Attorney

An attorney hired by a law firm as an employee. A staff attorney has no ownership rights in the firm and will not be invited to become a partner in the firm.

Associate Attorney

An attorney working for a law firm who is not a partner and does not have an ownership interest in the firm. Associates are usually less experienced attorneys and may be invited to become partners after working for the firm for several years.

Paralegal Manager

An employee in a law firm who is responsible for overseeing the paralegal staff and paralegal professional development.

Communications

Attorneys have a duty to keep their clients informed. Paralegals should be aware that this is a legal duty and that they play a significant role in meeting this duty. Sending billing statements to clients is one way to communicate; phone calls, letters, and e-mail messages are other ways to keep clients informed. Firms use a mix of traditional communications and new forms of social media to keep in touch with clients and to help generate new business. Firms need clear policies about communications within the firm and about how the firm presents itself to the outside world.

Double Billing

Billing more than one client for the same billable time period.

Support Personnel

Employees who provide clerical, secretarial, or other support to the legal, paralegal, and administrative staff of a law firm.

Employment Policies

Employment policies relate to compensation and employee benefits, performance evaluations, employment termination, and other rules of the workplace, such as office hours. Frequently (particularly in larger firms), the policies of the firm are spelled out in an employment manual or other writing. Paralegals must be sure to know their specific responsibilities. Most large firms have policies and procedures that apply to evaluation, promotion, and termination at the firm.

Filing Procedures

Every law firm follows certain filing procedures. In larger firms, these procedures may be written down. In smaller firms, procedures may be more casual and based on habit or tradition. 1. Client files—Confidentiality is a major concern and a fundamental policy of every law firm. A breach of confidentiality by anyone in the law office can subject the firm to extensive legal liability. The requirement of confidentiality shapes, to a significant extent, filing procedures. A typical law firm has client files, work product files and reference materials, forms files, and personnel files. Proper file maintenance is crucial to a smoothly functioning firm. An efficient filing system helps to ensure that important documents will not be misplaced and will be available when needed. Filing procedures must also maximize client confidentiality and the safekeeping of documents. 2. Work product files—Law firms often keep copies of all research materials, support materials related to cases, and legal memoranda. Maintenance of backup files is a requirement. 3. Form files—Firms often use standard form files that may have been prepared internally or have been professionally prepared by a service.

Billable Hours

Hours or fractions of hours that attorneys and paralegals spend in work that requires legal expertise and that can be billed directly to clients.

Law Office Management and Personnel

Law firm personnel include associate attorneys; law clerks; paralegals; administrative personnel, who are supervised by the legal administrator or the office manager; and support personnel, including receptionists, secretaries, file clerks, and others.

NALA's Position

NALA supports voluntary certification (self-regulation) but opposes licensing for paralegals. State licensing would only serve to control entry into the profession and would not improve the quality of the services that paralegals provide.

AAFPE's Position

The American Association for Paralegal Education (AAF PE) does not take a position on paralegal licensing. AAFPE recommends that states adopt AAFPE's minimum educational standards in any regulatory plan they enact

The Indirect Regulation of Paralegals

The general rule is that paralegals can perform almost any legal task that attorneys can (other than represent a client in court) as long as they work under an attorney's supervision.