Advantages And Limitations Of Using A Paralegal For Business. Hello everyone, I hope you are well. In today’s post, I will be sharing a guest post from Amanda Hamilton, Patron of the National Association of Licensed Paralegals (NALP). Amanda will explore the advantages and limitations to small businesses of utilising the services of a paralegal. When running a business, if something goes wrong, the immediate thought is, ‘How much is it going to cost to put it right?’ If that something happens to have an element of legality, the cost implications can be scary. But this is where a paralegal can help. Amanda covers the costs of hiring a paralegal vs. a solicitor; the most common areas a paralegal can help with are debt collection, employment, contracts, what else a paralegal can and cannot do, and how to find the right paralegal.
Advantages And Limitations Of Using A Paralegal For Business
When running a business, you are always mindful of costs, and when something goes wrong, the immediate thought is, ‘How much is it going to cost to put it right?’
Suppose that something happens that has an element of legality. In that case, it’s natural to turn to a solicitor for assistance, but with hourly costs ranging from £200 to £600, you may feel stuck between a rock and a hard place, especially if the legal problem is relatively minor.
Don’t despair! Paralegals are on hand to save the day. Whilst they may not be solicitors, paralegals are legally trained and educated to perform legal tasks and offer help to businesses and individual consumers. They do not charge as much as solicitors. On average, a paralegal may charge anything between £30 and £80 per hour, depending on the nature of the work.
So, if you have an employee causing trouble, a customer who is not paying their bills, or breaching an agreement, you can call a paralegal to assist.
So, how can a paralegal assist your business?
There are many areas where a paralegal can help you, but the three most common are debt collection, employment, and contracts.
Paralegals can help your business collect debts owed. Many businesses issue invoices with a ‘payment by’ date. Cash flow takes priority in any business environment, so when monies are not forthcoming, this can cause stress and pressure on the rest of the business.
If a client can’t pay an invoice, it is always best to talk first. Don’t jump straight to legal action. An offer and willingness to make a part payment and negotiate how to pay the balance would be more acceptable than receiving no payment. Plus, you will save the additional time and money needed to chase and collect the debt.
So, the first thing to do when you see a client is not responding is to contact them and offer to discuss options. This also applies if you are aware that you cannot pay your bills or invoices owing to your suppliers. Contacting the company/individual owed and arranging part payments to clear the debt over time is always best. Some will accept this, and others will not.
Benefits of Hiring a Paralegal for Debt Recovery
If monies remain owing, there may have to be a decision whether or not to take further action. More often than not, that means taking the debtor to court, and this is where paralegals can help. 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 specific 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. If it gets that far, paralegals can also represent you in court if it is a ‘small claim’ (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 create an employment contract for you, which remains a minefield for most lay people. Conversely, a paralegal can 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. If an employment matter escalates, it will likely be heard in a tribunal.
Drafting commercial business contracts with other businesses or individuals requires 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 nothing detrimental within it.
For example, a clause expressing a 90-day notice to terminate the agreement, a commonly used termination period, may state that notice can only be given before 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 end until 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 suggest an alternative form of words that helps protect you.
These are three common examples of when a paralegal can save money and ensure you get the advice you need without paying high solicitor fees. There are many other legal matters that a paralegal can also help with.
Of course, 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 standard limitation is that a paralegal is not permitted to ‘conduct litigation’, meaning 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, engage one who is sufficiently qualified and, like any professional, appropriately insured. One way to ensure this is to choose a paralegal with a Licence to Practice. You can search for paralegals in your area or with the specialism needed at https://www.nationalparalegals.co.uk/paralegal-register.
I hope you enjoyed that.
ABOUT THE AUTHOR
Amanda Hamilton is the Patron of the National Association of Licensed Paralegals (NALP), a non-profit membership body and the only paralegal body 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 to those looking for a career as a paralegal professional.
LinkedIn – https://www.linkedin.com/company/national-association-of-licensed-paralegals/