“Attorney Supervision,” Running &
Capping and the Rogue Paralegal
You’ve seen the ads. Countless “rogue” paralegals, who are nothing more than illegal, unregistered legal document preparers, advertise their services as being “provided pursuant to Business & Professions Code section 6450, et seq.,” or “attorney supervised,” or “attorney available for consultation.”
Most of the California legal community is aware that sections 6450-6456 of the Business & Professions Code set forth the education and experience requirements for paralegals, as well as restrictions on advertising for freelance paralegals. Unfortunately, most of the general public does not possess such awareness. The majority of consumers do not know that a paralegal is prohibited from performing services for non-attorneys, nor are they aware that advertising and business cards must include the name of the law firm employing the paralegal or a statement that the paralegal is employed by or contracts with a licensed attorney.
It’s a convenient misunderstanding for the illegal operator, anyway. The first part of Section 6451 almost appears to support the rogue paralegal’s contention that what he or she is doing is codified in California law. “It is unlawful for a paralegal to perform any services for a consumer except as performed under the direction and supervision of the attorney...” So far, so good, right? Just state in the ad, “attorney supervision pursuant to Business & Professions Code section 6450, et seq.”; the document preparer is exempt from registering as a legal document assistant because he or she works “under the direction” of a supervising attorney, right? Wrong. This section goes on to state, “...law firm, corporation, government agency, or other entity that employs or contracts with the paralegal.”
It really boils down to the age-old saying, “Follow the money.” As far as a bona fide independent, freelance paralegal is concerned, the “client” is the attorney who has requested and directs the work; that is who the paralegal must have a contract with. That is the only client a paralegal is permitted to have. An attorney must have the contractual relationship with the consumer, and that attorney may or may not choose to delegate some of the work to a paralegal employee or freelance independent contractor. Nothing in the law permits a paralegal or even a legitimate legal document assistant practice to employ an attorney for the purposes of advising clients or circumventing Business & Professions Code section 6450, et seq. In fact, the California Rules of Professional Conduct state that an attorney “shall not form a partnership with a person who is not a lawyer if any of the activities of that partnership consist of the practice of law.” (Rule 1-310)
After establishing that paralegals are not permitted to have an ownership interest in a law practice, we must turn to the referrals generated by such “paralegal” advertising. Let’s assume that “Everytown Paralegal” advertises their paralegal services, with “attorney supervision” or “consultation,” and it is abundantly clear that this individual is nothing more than an unregistered LDA offering legal document preparation services to members of the public. But Everytown Paralegal claims to comply with section 6450 et seq. because the consumer signs a fee agreement with the “supervising attorney.” Everytown Paralegal is no longer an illegal, unregistered LDA; however we now have a business engaged in running and capping, which is explicitly prohibited under section 6450(b)(4).
No matter how you look at it, these “paralegals” and their business practices are nothing short of fraudulent, preying upon the ignorance of an unsuspecting public. Furthermore, aside from the obvious lack of consumer protection, this represents a business practice that is significantly unfair to those of us who operate our businesses within the parameters of the Business & Professions Code by properly registering as a legal document assistant, advertising in accordance with the law, and utilizing the LDA Contract required by the Department of Consumer Affairs. On the other hand, they avoid the expense and hassle of obtaining a bond and registering, thus lowering their overhead and enabling them to undercut the prices legitimate LDAs must charge for our document preparation services.
To add insult to injury, this type of advertising conveys the impression that the illegal operator actually provides “more” or “better” services than the typical registered LDA. Whereas the LDA’s advertising explains that we are not attorneys and cannot give legal advice, the illegal “paralegal” has an attorney “on staff” who can advise her clients, affording the consumer a “value-added” service. Our contract is long and full of disclaimers and explanations about what the LDA cannot do for the client, while the “paralegal” is free to dispense with the written contracts, take cash without so much as a receipt, and “advise” the client how to proceed. And the average consumer is none the wiser. Unfortunately, our profession is too new, and enforcement too lacking, for the general public to see these ”paralegals“ for the charlatans that they are.