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In re Opinion No. 24 of Committee on Unauthorized Practice of Law

Decided: May 14, 1992.

IN RE OPINION NO. 24 OF THE COMMITTEE ON THE UNAUTHORIZED PRACTICE OF LAW


On review of a decision of the Supreme Court Committee on the Unauthorized Practice of Law.

Garibaldi, Wilentz, Clifford, Handler, Pollock, Stein

Garibaldi

The opinion of the court was delivered by

GARIBALDI, J.

The New Jersey Supreme Court Committee on the Unauthorized Practice of Law (the "Committee") concluded in Advisory Opinion No. 24, 126 N.J.L.J. 1306, 1338 (1990), that "paralegals functioning outside of the supervision of an attorney-employer are engaged in the unauthorized practice of law." Petitioners are several independent paralegals whom attorneys do not employ but retain on a temporary basis. They ask the Court to disapprove the Advisory Opinion.

Like paralegals employed by attorneys, independent paralegals retained by attorneys do not offer their services directly to the public. Nonetheless, the Committee determined that independent paralegals are engaged in the unauthorized practice of law because they are performing legal services without adequate attorney supervision. We agree with the Committee that the resolution of the issue turns on whether independent paralegals are adequately supervised by attorneys. We disagree with the Committee, however, that the evidence supports a categorical ban on all independent paralegals in New Jersey.

I

The Committee received inquiries from various sources regarding whether independent paralegals were engaged in the unauthorized practice of law. Pursuant to its advisory-opinion powers under Rule 1:22-2, the Committee solicited written comments and information from interested persons and organizations.

In response, the Committee received thirty-seven letters from a wide variety of sources. Additionally, the State Bar Association's Subcommittee on Legal Assistants ("Legal Assistant Subcommittee"), the National Association of legal Assistants ("NALA"), and the National Federation of Paralegal Associates ("NFPA") provided the Committee with information on regulation, education, certification, and the ethical responsibilities of paralegals.

The Committee characterized the information that it received in two ways: first, the material expressed positive views on the value of the work performed by paralegals; second, all of the materials expressly or implicitly recognized that the work of paralegals must be performed under attorney supervision. None distinguished between paralegals employed by law firms and those functioning as independent contractors offering services to attorneys. Several recurring themes played throughout the submissions:

1. One need not be a full- or part-time employee of a single attorney to be under the direct supervision of an attorney and independent paralegals in particular work under the direct supervision of attorneys.

2. Independent paralegals provide necessary services for sole practitioners and small law firms who cannot afford to employ paralegals on a full-time basis.

3. Independent paralegals confer an invaluable benefit on the public in the form of reduced legal fees.

4. Independent paralegals maintain high standards of competence and professionalism.

5. Rather than exacting a per se prohibition, the Committee should consider regulations or standards or other alternative forms of guidance, such as licensure and certification.

6. A blanket prohibition on independent paralegals would work a disservice to the paralegals and the general public.

After receiving those submissions, the Committee held a hearing at which four independent paralegals, three employed paralegals, and three attorneys testified. All the independent paralegals testifying before the Committee were well qualified. One independent paralegal noted that as an NALA member she is bound by both the ABA Model Code of Professional Responsibility and the ABA Model Rules of Professional Conduct. The independent paralegals stated that although they had worked with many attorneys during their careers, they had worked solely for those attorneys and only under their direct supervision.

The independent paralegals gave several reasons for being retained by attorneys. First, attorneys may be understaffed at any time and may need to devote additional resources to one case. Second, attorneys may need paralegal assistance but be unable to afford a full-time paralegal. Third, attorneys may hire independent paralegals who have expertise in a given field.

Client contact varied for each independent paralegal. Some see the attorney's client in the attorney's office, while others meet outside of the office. One paralegal testified that she carefully ensures that clients understand that she is not an attorney and that she cannot, as a paralegal, answer legal questions.

The independent paralegals correspond with clients on behalf of attorneys, using the attorney's or law firm's letterhead, which is usually kept in the paralegal's office. Although the paralegals noted that the attorneys generally receive copies of any correspondence, one paralegal testified that she did not provide copies of all correspondence to the attorneys. Another paralegal stated that some attorneys authorized her to send out letters without their prior review. All the paralegals pointed out that they use computer technology, which facilitates rapid transmission of letters and other written material to their supervising attorneys to review, correct, and return.

Three paralegals who were full-time employees of law firms also testified before the Committee. Each paralegal represented a paralegal organization, such as NFPA or NALA. They explained that many independent paralegals are members of those organizations and that both organizations have developed guidelines and standards for their paralegal members. In addition, NALA conducts a certification examination that takes over two days and requires extensive knowledge of a variety of legal matters.

All three employed paralegals expressed support for independent paralegals who work under the direct supervision of an attorney and who do not provide services directly to the public.

Two attorneys appeared before the Committee. One testified that as long as attorneys supervise independent paralegals, that those paralegals do not work full-time for one attorney or firm does not matter. The second attorney, a sole practitioner, testified that independent paralegals provide many benefits to both small firms and the general public alike. The Committee, he suggested, should focus on others, known as "legal technicians" or "forms practitioners," who offer their services directly to the public, rather than on independent paralegals who do not offer their services directly to the public but who are retained by attorneys.

II

After the hearing, the Committee issued Advisory Opinion 24, 26 N.J.L.J. 1306 (1990), in which it compared the amount of supervision attorneys exercise over employed paralegals and retained paralegals. It concluded that attorneys do not adequately supervise retained paralegals. Id. at 1338. The Committee linked the absence of adequate attorney supervision to several different factors.

First, the Committee raised the concern that attorneys retaining independent paralegals do not carefully select those with sufficient training and experience because the short-term working relationship does not allow the attorney enough time to discover their levels of expertise. Id. at 1337. In contrast, the Committee presumed that employed paralegals undergo an interview process with an attorney, and the attorney's ongoing relationship with those paralegals allows him or her to determine whether they are qualified for the job. Ibid.

Second, the Committee believed that attorneys are unable to undertake reasonable efforts to insure that the conduct of independent paralegals is compatible with the attorney's professional obligations pursuant to Rule 5.3 of the Model Rules of Professional Conduct ("RPC 5.3"). Ibid. The Committee reasoned that an attorney who hires an independent paralegal could not satisfy RPC 5.3(c)(3), which requires an attorney to make "reasonable investigations" into a paralegal's misconduct. Ibid. That Conclusion was based on the Committee's perception that the relationship between an attorney and an independent paralegal is more distant than the one between an attorney and a full-time employed paralegal. Ibid.

Third, the Committee maintained that the relationship between attorneys and independent paralegals would cause significant conflicts of interest because the independent paralegal could work for numerous law firms and the attorney might not be able to monitor any conflict that might arise. Id. at 1338.

Fourth, the Committee concluded that attorneys not sufficiently skilled in a particular area of the law who charge a fee for the work done by the paralegal violate attorney-ethics considerations by assisting in the unauthorized practice of law. Ibid.; see also RPC 5.5(b) (a lawyer shall not assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law). The Committee observed that attorneys cannot supervise an independent paralegal who is working in a field that is unfamiliar to the attorney. Ibid. It suggested as an alternative that sole practitioners could seek assistance in substantive legal matters from specialist attorneys or law firms rather than from independent paralegals. Ibid.

Fifth, and finally, the Committee was troubled by correspondence and communication between attorneys and independent paralegals. The Committee was distressed to learn that paralegals had sent out letters on firm stationary without prior review by the attorney, creating potential for misunderstanding by the general public. Ibid.

The Committee summarized its findings as follows:

When the paralegal is employed by the attorney, the nature of the employment relationship makes it possible for the attorney to make the decisions as to which matters are appropriate for handling by the paralegal and which matters require direct hands-on work by the attorney. When the attorney and the paralegal are separated both by distance and the independent nature of the paralegal's relationship with the attorney, the opportunity for the exercise of that most important judgment by the attorney becomes increasingly difficult.

This is not to say that there are not matters that could be handled by an independent paralegal with appropriate supervision by the attorney contracting with the paralegal. The problem is that the decisions as to what work may be done by the paralegal should be the attorney's to make but the distance between attorney and paralegal mandated by the independent relationship may result in the making of those decisions by the paralegal or by default.

It is the view of the Committee, moreover, that the paralegal practicing in an independent paralegal organization, removed from the attorney both by distance and relationship, presents far too little opportunity for the direct supervision necessary to justify handling those legal issues that might be delegated. Without supervision, the work of the paralegal clearly constitutes the unauthorized practice of law. We found, from the testimony and materials presented to our Committee, that the opportunity for supervision of the independent paralegal diminishes to the point where much of the work of the independent paralegal, is, in fact, unsupervised. That being the case, the independent practice by the paralegal must involve the unauthorized practice of law. The fact that some of the work might actually be directly supervised cannot justify the allowance of a system which permits the independent paralegal to work free of attorney supervision and control for such a large part of the time and for such a large part of the work.

[Ibid.]

Based on those findings, the Committee concluded that attorneys are currently unable to supervise adequately the performance of independent paralegals, and that by performing legal services without such adequate supervision those paralegals are engaging in the unauthorized practice of law. Ibid.

We granted petitioners' request for review, N.J. (1991), and the Chairperson of the Committee granted their motion to stay the enforcement of Opinion No. 24.

III

No satisfactory, all-inclusive definition of what constitutes the practice of law has ever been devised. None will be attempted here. That has been left, and wisely so, to the courts when parties present them with concrete factual situations. See Milton Lasher, The Unauthorized Practice of Law, 72 N.J.L.J. 341 (1949) ("What is now considered the practice of law is something which may be described more readily than defined.").

Essentially, the Court decides what constitutes the practice of law on a case-by-case basis. See, e.g., New Jersey State Bar Ass'n v. New Jersey Ass'n of Realtor Bds., 93 N.J. 470 (1983) (permitting real-estate brokers to prepare certain residential-sales and lease agreements, subject to right of attorney review); In re Education Law Center, 86 N.J. 124 (1981) (exempting non-profit corporations from practice-of-law violations); Auerbacher v. Wood, 142 N.J. Eq. 484 (E. & A. 1948) (holding that services of industrial-relations consultant do not constitute practice of law).

The difficulties presented by our undefined conception of the legal practice are reflected in this Court's review of decisions of the Committee on the Unauthorized Practice of Law. For example, in In re Application of the New Jersey Society of Certified Public Accountants, 102 N.J. 231 (1986), (hereinafter Application of CPAs), the Court stated:

The practice of law is not subject to precise definition. It is not confined to litigation but often encompasses "legal activities in many non-litigious fields which entail specialized knowledge and ability." Therefore, the line between permissible business and ...


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