The Guidelines for Use of Paralegals in Rendering Legal Services were approved on July 23, 2010.

Introduction

Making legal services of good quality available to all segments of the public efficiently and at an affordable price is an important goal of the North Carolina State Bar. The Plan for Certification of Paralegals, approved by the North Carolina State Bar and adopted by the NC Supreme Court in 2004, advances this goal by recognizing the value of paralegals as a cost effective delivery of legal services, establishing proficiency standards for paralegal certification, and raising the profile of the paralegal profession. The State Bar worked diligently with lawyers and paralegals across the state to establish certification requirements, including a degree in paralegal studies and passing a rigorous examination, that ensure that the certification credential has real value. North Carolina’s voluntary certification program helps lawyers and administrators to identify paralegals who meet or exceed the skills and knowledge required for certification.

The State Bar’s paralegal certification program promotes proper utilization of paralegals and helps to ensure that legal services are professionally and ethically offered to the public. Paralegals, like lawyers, should be held to the highest ethical and professional standards. The State Bar regulates the activities of paralegals indirectly through each lawyer’s professional duty to supervise employees and contractors to whom legal work is delegated. The Rules of Professional Conduct establish the standards for the supervision of nonlawyer assistants, including paralegals. The statutes on unauthorized practice of law in Chapter 84 of the North Carolina General Statutes, Rules 5.3 and 5.5 of the Rules of Professional Conduct, and the formal ethics opinions interpreting those rules determine the extent to which law-related tasks may properly be performed by paralegals.

The following guidelines do not change the Rules of Professional Conduct or the formal ethics opinions of the State Bar interpreting those rules. These guidelines are intended to facilitate the proper use of paralegals in a law firm by clarifying a lawyer’s professional responsibilities when supervising a paralegal. The guidelines also assemble in one document the applicable standards (with appropriate comment) for the ready use of lawyers and their employees when determining the permissible bounds of the conduct and activities of paralegals assisting lawyers in the rendition of legal services. To the extent there may be any inconsistencies, the Rules of Professional Conduct, not these guidelines, govern the conduct of a lawyer.

Guidelines

1. A lawyer is responsible for the professional conduct of a paralegal performing services at the lawyer’s direction. A lawyer must take reasonable measures to ensure that the paralegal’s conduct is consistent with the lawyer’s obligations under the Rules of Professional Conduct.

Rule 5.3,* Responsibilities Regarding Nonlawyer Assistants, provides that the partners or managing lawyers in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the conduct of a paralegal employed by the firm is consistent with the professional obligations of lawyers. Rule 5.3(a). Regardless of whether the lawyer has managerial authority in a law firm, paragraph (b) of the same rule provides that a lawyer having direct supervisory authority over a paralegal shall make reasonable efforts to ensure that the paralegal’s conduct is compatible with the professional obligations of the lawyer.

Lawyers responsible for the management of a firm must familiarize paralegals with all relevant provisions of the Rules of Professional Conduct. See guideline 4. As explained in comment [1] to Rule 5.3, "[t]he measures employed in supervising nonlawyers should take account of the fact that they do not have legal training and are not subject to professional discipline." Particular care must be taken to ensure that paralegals understand and appreciate the obligation to maintain the confidentiality of information received during the representation of clients.

Although legal work is delegated to a paralegal, the lawyer remains responsible for the ethical and competent performance of the work: a lawyer can never delegate his or her professional responsibility for the legal services provided to a client. See guideline 3. A lawyer is normally in a better position to supervise and this ensures ethical compliance of a paralegal who is an employee of the lawyer. The Rules of Professional Conduct do not, however, require that nonlawyer assistants be employees of a lawyer’s firm. Nevertheless, when a paralegal works as an independent contractor, the lawyer is still responsible for the paralegal's work product and ethical conduct. See RPC 216. For this reason, special care must be taken by the lawyer to ensure that an independent or “freelance” paralegal is competent and ethical before delegating work to the paralegal. The lawyer must provide the appropriate supervision and instruction regardless of the employment relationship with the paralegal. See 99 FEO 6 and guideline 3.

Rule 5.3(c) makes a lawyer professionally responsible for any conduct of a paralegal that would be a violation of the Rules of Professional Conduct if engaged in by the lawyer, when (1) the lawyer ordered the conduct or, with knowledge of the specific conduct, ratified the conduct; or (2) the lawyer has managerial authority or direct supervisory authority over the paralegal and learned of the conduct at a time when its consequences could be avoided or mitigated but the lawyer failed to take reasonable action to avoid the consequences.

A lawyer is also prohibited from violating or attempting to violate the Rules of Professional Conduct through the acts of another person. Rule 8.4(a). For example, Rule 4.2 prohibits a lawyer from communicating about a matter with a person known to be represented by a lawyer in the matter, unless that person's lawyer consents. A lawyer may not use an agent, such as a paralegal, to make such a communication and should ensure that a paralegal understands the lawyer’s duty.

2. A lawyer shall not permit a paralegal to engage in the practice of law. To this end, a lawyer may not delegate the following responsibilities or activities to a paralegal: establishing a client-lawyer relationship and the terms of the relationship; giving oral or written legal advice or a legal opinion to a client; interpretation of legal documents for a client; or appearance in any court proceeding unless authorized by law.

N.C. Gen. Stat. § 84-4 makes it unlawful for anyone but a licensed North Carolina lawyer to practice law. The term “practice law” is defined in N.C. Gen. Stat. § 84-2.1 as follows:

The phrase "practice law" as used in this Chapter is defined to be performing any legal service for any other person, firm or corporation, with or without compensation, specifically including the preparation or aiding in the preparation of deeds, mortgages, wills, trust instruments, inventories, accounts or reports of guardians, trustees, administrators or executors, or preparing or aiding in the preparation of any petitions or orders in any probate or court proceeding; abstracting or passing upon titles, the preparation and filing of petitions for use in any court, including administrative tribunals and other judicial or quasi‑judicial bodies, or assisting by advice, counsel, or otherwise in any legal work; and to advise or give opinion upon the legal rights of any person, firm or corporation: Provided, that the above reference to particular acts which are specifically included within the definition of the phrase "practice law" shall not be construed to limit the foregoing general definition of the term, but shall be construed to include the foregoing particular acts, as well as all other acts within the general definition. The phrase "practice law" does not encompass the writing of memoranda of understanding or other mediation summaries by mediators at community mediation centers authorized by G.S. 7A‑38.5 or by mediators of personnel matters for The University of North Carolina or a constituent institution.

Rule 5.5(d) of the Rules of Professional Conduct provides: “A lawyer shall not assist another person in the unauthorized practice of law.” The rationale for allowing only licensed lawyers to practice law is articulated in the comment [9] to Rule 5.5 as follows: “Limiting the practice of law to members of the bar protects the public against rendition of legal services by unqualified persons.” As further observed in the comment, however, Rule 5.5, “does not prohibit a lawyer from employing the services of paraprofessionals and delegating functions to them, so long as the lawyer supervises the delegated work and retains responsibility for their work.”

Regardless of the apparent competence displayed by a paralegal, the paralegal may not engage in the practice of law. A lawyer may, however, allow a paralegal to perform legally-related tasks, provided the lawyer and the paralegal comply with these guidelines. For example, a paralegal may communicate settlement terms to a claims adjuster for an insurance carrier as long as the paralegal does not exercise independent legal judgment regarding the value of the case. RPC 70. Similarly, 2002 FEO 9 provides that, in a residential real estate closing, a nonlawyer assistant supervised by a lawyer may identify to the clients the documents to be executed, direct the clients as to the correct place on each document to sign, and handle the disbursements of proceeds for the transaction, even though the supervising lawyer is not physically present. However, a lawyer may not rely upon title information from an abstract firm operated by a paralegal or other nonlawyer unless the lawyer supervised the nonlawyer who did the work. RPC 29; See also N.C. Gen. Stat, § 58-26-1.

If warranted by exigent circumstances, a lawyer may allow a paralegal to sign his or her name to court documents as long as: 1) it does not violate any law, court order, local rule, or rule of civil procedure, 2) the lawyer has provided the appropriate level of supervision, and 3) the signature clearly discloses that another has signed on the lawyer’s behalf. 2006 FEO 13.

Although only a lawyer may act as a representative of or serve as an advocate for a client before most tribunals, there are limited statutory, administrative and judicial exceptions which allow a nonlawyer to appear in a representative capacity in certain tribunals. For example, some federal agencies authorize nonlawyers to represent parties in certain proceedings before the agency. A lawyer may hire a nonlawyer to perform such limited representation on behalf of a client. See 2005 FEO 2 (law firm may employ nonlawyer to represent Social Security disability claimants provided the status of the nonlawyer is disclosed to prospective clients and in any advertising for the service). Also, a lawyer may have a nonlawyer employee deliver a message to a court holding calendar call if the lawyer is unable to attend due to a scheduling conflict with another court or for another legitimate reason. 2000 FEO 10. However a lawyer may not permit a legal assistant to examine or represent a witness at a deposition. RPC 183.

A lawyer is responsible for taking reasonable measures to ensure that clients, courts, and other lawyers are aware that a paralegal, whose services are utilized by the lawyer in performing legal services, is not licensed to practice law. See guideline 5. A lawyer shall require a paralegal to disclose that he or she is not a lawyer when necessary to avoid misrepresentation. Although a paralegal may communicate directly with a client on behalf of the lawyer, early disclosure of nonlawyer status is necessary to assure that there will be no misunderstanding as to the responsibilities and role of the paralegal. Disclosure may be made in any way that avoids confusion. Common sense suggests a routine disclosure at the outset of a conference or any type of communication. If a paralegal is designated as a client’s contact in a law firm, disclosure of nonlawyer status should be made at the time of such designation.

Two advisory opinions from the Authorized Practice Committee are worth noting. The first is Authorized Practice Advisory Opinion 2002-1 which speaks to the role of laypersons in the consummation of residential real estate transactions. The second is Authorized Practice Advisory Opinion 2006-1 which speaks to appearances of nonlawyers at quasi-judicial hearings on zoning and land use. These opinions can be found in the NC State Bar website: www.ncbar.gov.

3. A supervising lawyer is responsible for work product and for providing appropriate and active supervision to a paralegal. A lawyer may delegate to a paralegal any task normally performed by the lawyer except as set forth in guideline 2.

A lawyer may delegate legal and non-legal work to a paralegal subject to any limitations imposed by statute, court order or rule, administrative regulation, or the Rules of Professional Conduct. See guideline 2 and Rule 5.3.

A lawyer must take reasonable measures to ensure that the paralegal is competent to perform the work delegated to the paralegal. To do so, the lawyer must be competent to do the legal work that the lawyer delegates to the paralegal: the lawyer may not rely on the experience and knowledge of the paralegal. In addition, the lawyer must supervise all of the work of the paralegal. The appropriate level of supervision is dependent upon the paralegal’s knowledge, skill and experience.

A paralegal should inform the responsible lawyer of all significant actions and services performed by the paralegal. Only appropriate supervision of the paralegal can ensure the quality of the work performed and that the paralegal is neither engaging in the unauthorized practice of law nor violating the lawyer's professional responsibilities.

A lawyer shall maintain an active, personal relationship with his or her clients. Maintaining such a relationship with the client, however, does not preclude a paralegal from meeting with or talking with the client, nor does it necessarily require regular and frequent meetings between the lawyer and client. However, whenever it appears that consultation between the lawyer and the client is necessary, the lawyer should not rely on a paralegal to communicate with a client; the lawyer should talk directly with the client and, when reasonable, remain available for consultation with the client.

A lawyer must give a paralegal appropriate instruction and supervision concerning the ethical aspects of their employment, particularly regarding the obligation not to disclose information relating to representation of the client. See guidelines 1 and 4.

It is permissible for a lawyer to employ an independent contractor or “freelance” paralegal provided certain conditions are met. A lawyer must take reasonable measures to determine that the freelance paralegal is competent to perform any activities delegated to the paralegal. See, RPC 216. In addition, as with an employee, a lawyer must also take reasonable measures to ensure that the freelance paralegal complies with the lawyer's ethical responsibilities. The lawyer must adequately supervise the freelance paralegal and inquire into the freelance paralegal's potential conflicts of interest. See guideline 9. Finally, a lawyer should disclose to the client the use of a freelance paralegal, the name of the freelance paralegal and how the freelance paralegal's services will be charged to the client, if the client inquires. RPC 216.

4. A lawyer is responsible for taking reasonable measures to ensure that client confidences are Preserved and protected by a paralegal.

Perhaps no professional duty of a lawyer is more important than the duty of confidentiality. Consistent with a lawyer’s duty under Rule 5.3 to ensure that a paralegal acts in a manner that is consistent with the lawyer’s professional responsibilities, a lawyer must take reasonable measures to ensure that a paralegal understands and fulfills the duty to preserve and protect client confidences from disclosure. The importance of this duty is emphasized in RPC 176 which addresses the responsibilities of a lawyer who employs a paralegal previously employed by a lawyer representing an opposing party. While recognizing that a paralegal is not subject to the imputed disqualification rules applicable to a lawyer, the opinion holds that the hiring lawyer must take care to ensure that the paralegal is screened from participation in the case because this requirement “is consistent with a lawyer’s duty…to make reasonable efforts to ensure that the conduct of a nonlawyer over whom the lawyer has direct supervisory authority is compatible with the professional obligations of the lawyer including the obligation…to preserve the confidentiality of client information.” RPC 74 allows a firm that employs a paralegal to represent an interest adverse to that of a party represented by the paralegal’s prior employer provided the paralegal is screened from participation in the case. See Rule 1.0(1) and cmt. [9] to Rule 1.0 for screening procedures.

5. A lawyer may include the name of a paralegal on firm letterhead or other forms of communication, including advertising, provided the paralegal’s title is clearly indicated.

A lawyer's letterhead, like other communications about the lawyer or the lawyer's services, must not be false or misleading. Rule 7.1. Specifically, such communication may not misrepresent or omit a fact necessary to make a statement not materially misleading. To avoid the implication that a paralegal whose name appears on the letterhead of a law firm is licensed to practice law, the limited capacity of the paralegal must be clearly indicated. RPC 126.

Likewise, business cards bearing the name of the lawyer or law firm employing a paralegal may be used by the paralegal for identification. However, the paralegal's status must be evident from the title or other description used on the business card. See CPR 253.

A paralegal may also sign correspondence on a lawyer's or a law firm's letterhead, subject, however, to the same requirements. For example, a paralegal's signature must be accompanied by a title.

6. A lawyer may charge for the work performed by a paralegal provided the fee is not clearly excessive.

Rule 1.5(a) prohibits a lawyer from making an agreement for, charging, or collecting a clearly excessive fee or charging or collecting a clearly excessive amount for expenses. Numerous authorities, including the United States Supreme Court, have recognized that paralegal work may be billed at the prevailing market rate and included in a fee application to a court. See, Missouri v. Jenkins, 491 U.S. 274 (1989). Generally, a lawyer may bill and recover for a paralegal’s work if the work would have traditionally been performed by the lawyer provided the fee charged or collected is not clearly excessive.

In determining a reasonable rate to charge for a paralegal’s services, such factors as the paralegal’s experience, training, knowledge, skill and ability, including whether the paralegal is certified by the North Carolina State Bar or a nationally recognized organization, should be taken into consideration. See Rule 1.5(a). As with the lawyer’s fees, the basis or rate of the fee charged for a paralegal’s services or time should be promptly communicated to all new clients, preferably in writing. See Rule 1.5, cmt. [2].

7. A lawyer may compensate a paralegal based on the quality and quantity of the paralegal’s work but a legal fee may not be shared with a paralegal. The paralegal’s compensation may not be contingent upon the outcome of a particular case or paid in exchange for referring clients.

Rule 5.4(a) specifically prohibits sharing legal fees with a nonlawyer except in certain limited situations. As noted in comment [1] to the rule, the rule expresses “[the] traditional limitations on sharing fees [which]…are to protect the lawyer’s professional independence of judgment.” In accordance with Rule 5.4, compensation of a paralegal may not be based upon a percentage of the fees received by the lawyer, nor should the paralegal receive any remuneration, directly or indirectly, for referring prospective clients to the lawyer. See Rule 7.2(b). For example, RPC 147 holds that a lawyer may pay a paralegal a bonus for productivity but the bonus may not be a percentage of the income that the firm derives from the legal matters upon which the paralegal worked. Similarly, a paralegal may not be promised compensation based upon the outcome of a particular case or cases. A lawyer may, however, compensate a paralegal based upon the quality and quantity of the paralegal’s work and may include a paralegal in a retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement. Rule 5.4(a)(4).

A paralegal who handles a matter for which a nonlawyer may legally be awarded a fee, may be compensated based upon the income generated by such representation. 2005 Formal Ethics Opinion 6 explains:

Nonlawyers are legally permitted to represent disability claimants before the Social Security Administration and to be awarded fees for such representation. When generated by a nonlawyer as authorized by law, such a fee cannot be designated a ‘legal fee’ subject to the limitations of Rule 5.4(a)….Moreover, the nonlawyer’s participation in the fee does not impair a lawyer’s independent professional judgment when the nonlawyer may, by law, represent the claimant without the supervision or participation of the lawyer.

8. A lawyer may delegate management of a trust account to a paralegal or other nonlawyer employee but the lawyer remains professionally responsible for the safe keeping of the funds deposited in the account and for compliance with the record keeping and accountings required by the Rules of Professional Conduct.

As with other law-related tasks, a lawyer may delegate the day-to-day management of a trust account to a paralegal or other nonlawyer employee. However, the lawyer’s responsibility for client funds that are deposited into the trust account persists, and the lawyer may be held professionally responsible for the conduct of the nonlawyer. See Rule 5.3. The lawyer is responsible for maintaining the trust account in accordance with Rule 1.15, the trust accounting rule of the Rules of Professional Conduct. This includes compliance with the record keeping and accounting requirements in Rule 1.15-3. A paralegal who is managing a trust account must be properly trained to handle this responsibility. More importantly, the lawyer must provide continuous oversight to ensure not only that the records are maintained and accountings rendered but also to ensure that no client funds are inappropriately taken from the account. This requires constant vigilance even when the day-to-day management of the trust account is delegated to a nonlawyer. The duty of safekeeping of client property includes informing the State Bar when a lawyer discovers that a nonlawyer has taken funds from the trust account. Rule 1.15-2(o) and Rule 5.3, cmt. [3].

9. A lawyer shall take reasonable measures to prevent conflicts of interest resulting from a paralegal's prior employment, other employment, or personal interests.

A lawyer owes his or her client loyalty. No interest or loyalty of a paralegal may be permitted to interfere with the lawyer’s exercise of independent professional judgment. If the interests of a paralegal might materially limit or otherwise adversely affect the lawyer's representation of a prospective or current client, Rule 1.7 may require the lawyer to decline or discontinue the representation.

Lawyers should make sure that their paralegal understands a lawyer’s professional and ethical responsibilities with respect to conflicts of interest. If a lawyer accepts a matter in which the paralegal has a conflict of interest that does not affect or limit the lawyer's representation of the client, the lawyer should exclude the paralegal from participation in the representation. RPC 74 and RPC 176. Although the imputed disqualification rule (Rule 1.10) does not apply to nonlawyers, a lawyer must take "extreme care to ensure" that the paralegal is totally screened from participation in the case. Id. In addition, the lawyer should inform the client that a nonlawyer employee has a conflict of interest which, were it the lawyer's conflict, might prevent further representation of the client in connection with the matter. The nature of the conflict should be disclosed and the client’s informed consent, confirmed in writing, should be obtained. Rule 1.7 (b).

A lawyer is not disqualified from representing a client merely because a secretary or paralegal in his or her office may be called as a witness. RPC 19 and RPC 213. Rule 3.7, which governs the potential conflict if a lawyer is both an advocate and a witness, does not apply to nonlawyer employees of the lawyer. RPC 19. Furthermore, a paralegal may work for multiple employers, including working as a private investigator, as long as each lawyer takes steps to ensure that client confidences are not compromised. CPR 334.

10. A lawyer who employs a paralegal should facilitate the paralegal’s continuing self improvement by encouraging and supporting the paralegal’s participation in professionalism, continuing education, and pro bono publico activities and encouraging certification by the North Carolina State Bar’s Board of Paralegal Certification or other reputable program.

When a paralegal is delegated responsibility for tasks which would otherwise be performed by a lawyer, their continuing competence is critical to responsible client representation. Just as it is important for a lawyer to take continuing education programs and to participate in professional associations in order to keep abreast of changes in the law, learn new practices and procedures, and network with individuals who are more knowledgeable about certain areas of law, it is important for a paralegal to do the same. Keeping a paralegal’s skills honed and his or her enthusiasm for advocacy fresh by encouraging attendance at continuing education programs and professional certification by the State Bar or another reputable national organization will result in a paralegal who is a more valued member of the team and better able to serve the client. Similarly, a paralegal’s participation in pro bono activities will instill respect for the fair administration of justice and also provide opportunities to learn new skills.

Other Information For and About Paralegals

Definition

At the August 1997 American Bar Association (“ABA”) Annual Meeting, the ABA’s policy making body, the House of Delegates, adopted the current definition of “legal assistant/paralegal”, as recommended by the Standing Committee on Legal Assistants (now the Standing Committee on Paralegals). The current definition reads as follows:

A “legal assistant or paralegal” is a person, qualified by education, training or work experience who is employed or retained by a lawyer, law office, corporation, governmental agency or other entity and who performs specifically delegated substantive legal work for which a lawyer is responsible.

The definition is instructive. Although no mandatory course of study or certifying exam exists to qualify one as a “legal assistant or a paralegal”, and lawyers are not required to hire legal assistants with any specific educational prerequisites or certifications, information about paralegal education and certification programs may assist a lawyer in hiring and effectively utilizing legal assistants in accordance with the lawyer's ethical obligations and these guidelines.