If something happens that has an element of legality, it is natural to turn to a solicitor for assistance, but with hourly costs ranging from £200 to £600, this may be an unnecessary expense if the legal problem is relatively minor.
There is a more cost-effective path that a family office could consider. This leads to the door of a paralegal professional. On average, a paralegal may charge anything between £30 and £80 per hour, depending on the nature of the work.
A paralegal, while not a qualified solicitor, is legally trained and educated to perform legal tasks. A paralegal can do virtually everything that a solicitor can do except activities that are referred to as Reserved Activities.
There are many areas where a paralegal can help with legal issues, but the three most common are debt collection, employment, and contracts.
When owed money it is always best to avoid jumping straight to legal action. An offer and willingness to make a part payment and negotiate how to pay the balance would surely be more acceptable than receiving no payment at all. Plus, you will save the additional time and money needed to chase and collect the debt.
However, if a debtor leaves no option, a paralegal can assist you in completing the necessary pre-action protocols: drafting a letter to the debtor and explaining what is owed and how long it is overdue and giving the debtor a certain time frame to pay the amount outstanding, with the threat that if it is not paid court action will ensue.
If necessary, the paralegal can help you complete the necessary court forms, advising you on what to say and how to write it on the form. Paralegals can also, if it gets that far, represent you in court as long as it is a ‘small claim’ (one that is not more than £10,000). Hopefully, that won’t be necessary as the debtor is likely to be in contact beforehand, but if it is, the paralegal is there and can assist at a reasonable cost.
Similarly, a paralegal can help if you are being taken to court for a similar reason – that you or the business owes money to someone else.
A paralegal can put together an employment contract for your family office, something which remains a minefield for most lay people. On the other side of the coin, a paralegal will be able to assist you if the worst happens and an employee takes legal action against you for any reason. Paralegals also have a right to represent clients in a tribunal. It is likely that if an employment matter escalates, it will be heard in a tribunal.
Drafting commercial business contracts is a skill requiring specialist knowledge, and this is where a paralegal can help, either by drafting such a contract or casting an eye over one that has been sent to you to ensure there is nothing detrimental within it.
For example, a clause expressing that there is a 90-day notice to terminate the agreement, which is a commonly used termination period, may go on to state that notice can only be given prior to the renewal of the contractual term, which may be 12 months. Therefore, if you try to terminate the contract in the thirteenth month, the contract will not come to an end until a further eleven months have passed. This may have financial consequences for which you have not budgeted. A specialist paralegal should be able to spot this on first reading, advise accordingly, and/or suggest an alternative form of words that helps protect you.
These are just three common examples of when using a paralegal can save you money and ensure you get the advice you need without having to pay high solicitor’s fees. A paralegal can also help with many other legal matters.
Of course, as noted earlier, there are some limitations imposed on paralegals. They are restricted in what they can do by what is known as Reserved Activities. The most common restrictions relate to a ‘right of audience’, where a paralegal is not permitted to represent a client in all courts apart from the small claims court and the tribunal.
The second common limitation is that a paralegal is not permitted to ‘conduct litigation’, meaning that they cannot sign letters and documents on a client’s behalf or be an agent and be served with official court documents. However, to get around that hurdle, they can draft letters and complete forms for clients, but clients must sign and serve these themselves.
When choosing a paralegal, be sure to engage one that is both sufficiently qualified and, like any professional, appropriately insured. One way a family office can ensure this is to choose a paralegal that has a Licence to Practise. You can search for paralegals in your area, or with the specialism needed at https://www.nationalparalegals.co.uk/paralegal-register
Amanda Hamilton is the Patron of the National Association of Licensed Paralegals (NALP), a non-profit membership body and the only paralegal body that is recognised as an awarding organisation by Ofqual (the regulator of qualifications in England). Through its Centres around the country, accredited and recognised professional paralegal qualifications are offered for those looking for a career as a paralegal professional.