True or False:
- Legal fees can be threatened if paralegal qualifications are challenged in a state where statutes/regulations govern paralegal professionals.
- Fees recoverable by a prevailing party and fees legitimately charged by a firm to its own clients can both be threatened or denied completely if paralegal qualifications are challenged.
- In California, supervising attorneys and paralegals can be held financially and/or criminally liable if they do not ensure that paralegals employed at their firm or corporation are qualified under California Business & Professions Code 6450-6456.
The answer to all these questions is true. I have attended numerous presentations and CLEs on ethics and competency and have never heard state statutes/regulations governing paralegal professionals mentioned before. This is very surprising to me considering that state statutes and regulations governing paralegal qualifications increases the level of liability for supervising attorneys in law firms and corporations.
As a non-attorney litigation support professional without a governing body to oversee competency and qualifications, I never gave much thought to the standards other non-attorney professionals were held to. Imagine my surprise to hear that in California, supervising attorneys and paralegals can be held financially and/or criminally liable if they do not ensure that the paralegals they hire are qualified to work on their matters.
After learning more about California Business & Professions Code 6450-6456 specifically, I realized there is even more risk and liability for supervising attorneys in California if they do not validate the qualifications of their paralegals under B&P Code 6450. Challenges made under B&P Code 6450 could result in malpractice or fee challenging claims through the State Bar as well as ethical claims against an attorney for allowing fees to be billed out under “paralegal” when their team members are not true paralegal professionals.
California Business & Professions Code 6450-6456
Assembly Bill 1761 was introduced as a way for consumers to protect themselves from untrained, unqualified individuals who promoted themselves as “paralegals” and then provided poor services. The Assembly Bill was codified in Business and Professions Code 6450-6456 effective January 1, 2001 and defines the qualifications and functions of paralegals practicing in California.
Some key sections of the code state the following:
- [6450(a)] – “Paralegal” means a person who holds himself or herself out to be a paralegal, who is qualified by education, training, or work experience, who either contracts with or is employed by an attorney, law firm, corporation, governmental agency, or other entity, and who performs substantial legal work under the direction and supervision of an active member of the State Bar of California, as defined in Section 6060, or an attorney practicing law in the federal courts of this state, that has been specifically delegated by the attorney to him or her.
Tasks performed by a paralegal include, but are not limited to, case planning, development, and management; legal research; interviewing clients; fact gathering and retrieving information; drafting and analyzing legal documents; collecting, compiling, and utilizing technical information to make an independent decision and recommendation to the supervising attorney…
- [6450(d)] – Every two years, commencing January 1, 2007, any person that is working as a paralegal shall be required to certify completion of four hours of mandatory continuing legal education in legal ethics and four hours of mandatory continuing legal education in either general law or in an area of specialized law. All continuing legal education courses shall meet the requirements of Section 6070. Certification of these continuing education requirements shall be made with the paralegal’s supervising attorney. The paralegal shall be responsible for keeping a record of the paralegal’s certifications.
- [6452(a)] – It is unlawful for a person to identify himself or herself as a paralegal on any advertisement, letterhead, business card or sign, or elsewhere unless he or she has met the qualifications of subdivision (c) of Section 6450 and performs all services under the direction and supervision of an attorney who is an active member of the State Bar of California or an attorney practicing law in the federal courts of this state who is responsible for all of the services performed by the paralegal. The business card of a paralegal shall include the name of the law firm where he or she is employed or a statement that he or she is employed by or contracting with a licensed attorney.
- [6452(b)] – An attorney who uses the services of a paralegal is liable for any harm caused as the result of the paralegal’s negligence, misconduct, or violation of this chapter.
-  – The terms “paralegal,” “legal assistant,” “attorney assistant,” “freelance paralegal,” “independent paralegal,” and “contract paralegal” are synonymous for purposes of this chapter.
- [6455(a)] – Any consumer injured by a violation of this chapter may file a complaint and seek redress in any municipal or superior court for injunctive relief, restitution, and damages. Attorney’s fees shall be awarded in this action to the prevailing plaintiff.
Why California Business & Professions Code 6450-6456 Is Important
In California, supervising attorneys can jeopardize legal fees and breach ethical obligations if they do not take the necessary steps to ensure that paralegals employed at their law firm or corporation are qualified under California Business and Professions Code 6450-6456. Although the only ways to enforce the code is by means of civil action or violation penalties, all it takes is a savvy client or opposing counsel to start questioning processes and work product before paralegal competency and legal fees are called into question.
Although decisions surrounding B&P Code 6450 are inconsistent and a bit older, the fact remains that legal fees can be threatened if a law firm or corporation ignores the requirements of the statute.
- Sanford v. GMRI, Inc. dba Red Lobster, Civ. No. S-04-1535 (E.D. Cal. Nov. 14, 2005)
Fees denied due to paralegals not meeting requirements of B&P Code 6450.
- White v. GMRI, Inc. dba Red Lobster, Civ. No. S-04-0620 (E.D. Cal. April 12, 2006)
Fees denied due to missing declaration of supervising attorney proving paralegal qualifications under B&P Code 6450.
- Martinez v. G. Maroni Co. dba CHURCH’S et al, Civ. No. S-06-1399 (E.D. Cal. May 2, 2007)
Paralegal qualifications validated however fees reduced under B&P Code 6450 for tasks that were more appropriately identified as administrative tasks.
- Ellis v. Toshiba America Information Systems, Inc., 218 (Cal. App. 4th 853, 2013)
Compliance to educational requirements of B&P Code 6450 is not a prerequisite to the recovery of paralegal fees.
How Regulations Governing Paralegals Apply to eDiscovery
As more paralegals and non-attorney professionals get involved in the eDiscovery process the conversation on ethical obligations and competency has to evolve into more than the attorney perspective. The discussion has to include the ethical obligations and competency of both supervising attorneys and non-attorney professionals.
Even though eDiscovery isn’t specifically mentioned in statues/regulations governing paralegal professionals, if you look at some of the tasks specified under California Business and Professions Code 6450(a) – case planning, interviewing clients, retrieving information, collecting, compiling, and utilizing technical information to make an independent decision and recommendation to the supervising attorney – these are tasks that can easily be associated to eDiscovery which makes education and experience even more important. There is a lot at stake for everyone if eDiscovery isn’t handled properly and both supervising attorneys and paralegals can be held liable for inexperience and negligence under state statutes/regulations.
Bringing It All Together
It is important for supervising attorneys and paralegals to understand what statutes/regulations govern paralegal professionals in their home state. The National Federation of Paralegal Associations (NFPA) has recently published an updated, in-depth guide of Paralegal Regulations broken out by individual state and it is imperative that supervising attorneys and paralegals review and discuss before moving forward on a matter. In California, any consumer injured by a violation of Business and Professions Code 6450-6456 can sue for injunctive relief, restitution and damages and many other states are following suit with similar statutes/regulations.
Ethical and competency obligations are not just for counsel. Supervising attorneys, paralegals and other non-attorney professionals have a responsibility to present their qualifications accurately or they run the risk of exposing their firms, corporations and clients to ethical violations and lost revenue due to reduced or unrecoverable legal fees. It is time for conversations within our industry to evolve so that both attorneys and non-attorney professionals are properly educated and roles and responsibilities clearly defined.
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