What You Need to Know When Setting Up a Paralegal Practice

Created: Friday, February 24, 2023, posted by Geetesh Bajaj at 10:00 am

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By Amanda Hamilton, Patron of NALP

In 2007, The Legal Services Act, sought to liberalize and encourage competition in the market for legal services in England and Wales. This statute, together with the withdrawal of Legal Aid (for all but the most urgent cases) means that there is no longer funding to assist consumers financially in bringing an action or defending an action through the courts.

Setting Up a Paralegal Practice
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With solicitors’ fees ranging from £250 to £600 per hour, and paralegal practitioners charging between £30 to £80 per hour, the affordability of paralegal services make the sector very attractive to those needing legal assistance in a world where everyone is minding the pennies.

If you have the relevant experience and/or qualifications, you may be considering setting up your own paralegal practice, but before delivering services direct to businesses and consumers, there are several issues to consider. These range initially from whether you have sufficient qualifications and/or experience, professional status, and demand to how to go about setting up your business including the dos and don’ts.

So, let’s look at each in turn.

Do you have the necessary competency?

Although you may feel you have the knowledge to perform certain legal tasks and offer advice and assistance, it is important you are able to provide evidence to back this up. Clients want to be sure that the person handling their delicate legal issue is in fact competent to do so.

Being able to show your qualifications and/or work experience to date will help give clients that comfort. Although it is not necessary to have a recognized qualification, it will certainly help. It will ensure you are fully informed, and it will give clients confidence too.

Even if you already have several years of work experience—perhaps in-house at a large company, in the public sector, or within a solicitor’s practice—gaining an Ofqual recognized paralegal qualification will help to cement that experience and prove that you are competent to perform the work you are being asked to do.

There are various levels of qualifications and which one you choose will depend on how much experience you have. These qualifications start with an entry-level qualification which is the Level 3 Award in Paralegal Practice (2 units of study) to the Level 3 Certificate (4 units of study) and finally the Level 3 Diploma (6 units of study). There is also the Level 4 Diploma in Paralegal Studies (10 units of study) and the Level 7 Diploma in Paralegal Practice for those who already have gained a Law Degree (6 units of study).

Even if you do have a recognized qualification, it’s always best to keep your knowledge up to date (which you have to do if you have a NALP License to Practice) by completing CPD courses each year.

The demand

Before thinking about setting up on your own, you must be sure that there is sufficient demand out there for your particular type of work. Failure to do so means that you will not succeed in having a sustainable business. This means that you must know your market. It is important to have experienced the area in which you wish to work and to understand the services clients may want from you: Who are your potential clients? Where will you find them? What services will they want? Can you fulfil that need? How much competition is there? How will you set yourself apart?

Ensuring you understand the market and the demand is key to building a profitable business.

Case study:

A learner signs up for a Paralegal Studies qualification. It takes her two years to complete, after which she joins a criminal law firm. She works there for five years during which time she spots that there is a demand for legally qualified individuals to care for vulnerable clients during the criminal law process. She leaves the firm and sets up her own business assisting such clients. She qualifies as a police station representative, and after a period, she applies to the Bar Standards Board for Licensed Access in order to be able instruct barristers directly on behalf of her clients. She succeeds in her application. She now runs a very successful practice where she can provide continuity and a presence for her clients from the moment they are arrested right the way through to court proceedings if it gets that far.

Setting up the business

So, you have your professional membership and your Licence to Practise. What next? Should you incorporate your business straight away? Simple answer is no. The best way to test whether a business works is to commence as a sole trader. If it is successful enough after the first few years, then you could consider converting it to a limited company. However, it’s always best to get some independent financial advice from an accountant first in respect of the pros and cons of each type of business.

For example, an issue to consider if you were to incorporate your business is the cost, as it involves the requirement to have accounts drafted each year by a chartered accountant. On the other hand, one of the advantages is that you will have limited liability if something goes wrong, so make sure you get the proper advice before starting up.

Marketing and PR

In order to ensure your business is sustainable there should be consistent, and ongoing marketing. This can range from Search Engine Optimizations (SEO) to ensure your website (and you really should have one) is found easily on any search engine, to PR involving the publication of articles written by you in relevant magazines and websites, which will really help to get your name and expertise known.

What type of marketing you choose may well be determined by the kind of business you have (and want to have in the future) and what you like to do. For example, some people love posting on social media, others like to create webinars or newsletters, some prefer to write articles. Networking is also a good option to get your name and business known; remember that while this can be very effective, it is a slow burner.

You also need to decide whether to outsource to an expert, which in the first instance, is probably the best option as you can control the costs and it frees you up to do the work you love – being a paralegal.

Protection – for you and your clients

Being a member of a professional body, such as the National Association for Licensed Paralegals (NALP) is another way to give you extra kudos and credibility, and your clients confidence. It also offers both you, and them, protection.

Gaining a License to Practice from NALP, for example, shows that a level of due diligence has been performed to ascertain an individual’s experience and/or qualifications which have been thoroughly checked and scrutinized. In addition, the eligibility to gain a License to Practice requires the applicant to have PII (Professional Indemnity Insurance) and this gives any potential client confidence that you have the back-up should there be an issue.

Should there be a grievance, NALP can act as an independent arbiter ensuring you are not the victim of vexatious complaints, while also helping to ensure that the reputation of the paralegal sector is properly protected.

Being a NALP member also offers you the opportunity to get support and advice from highly experienced individuals within the organization about your practice and career.

Amanda Hamilton
Amanda Hamilton is the Patron of the National Association of Licenced Paralegals (NALP), a non-profit membership body and the only paralegal body that is recognized as an awarding organization by Ofqual (the regulator of qualifications in England). Through its centers around the country, accredited and recognized professional paralegal qualifications are offered for those looking for a career as a paralegal professional.

The views and opinions expressed in this blog post or content are those of the authors or the interviewees and do not necessarily reflect the official policy or position of any other agency, organization, employer, or company.

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