In the News

United States Supreme Court Agrees to Hear Paralegal Fees Case

By: Marie Koster

AAPI Director of National Affairs

The question presented is: Under the Equal Access to Justice Act (EAJA), 5 U.S.C. ss 504(a)(1) and 28 U.S.C. ss 2412(d)(1)(A), may a prevailing party be awarded attorney fees for paralegal services at the market rate for such services, as four circuits have upheld, or does EAJA limit reimbursement for paralegal services to cost only, as the Federal Circuit panel majority held?

The United States Supreme Court has granted certiorari to Richlin v. Chertoff. This case will consider whether paralegal services can be recovered at the market rate when determining the payment of attorneys' fees. The US Court of Appeals for the Federal Circuit ruled that the Equal Access to Justice Act permits only the reimbursement of paralegal services as the cost of the expense to the attorneys rather than as fees at the market rate. A decision in this case would resolve a split among the circuit courts of appeal.

Background: The term paralegal in previous years was synonymous with legal secretary, whereas persons having those titles were of considerable assistance to attorneys on a day-to-day basis, but did not exactly work independently of the attorney. That has all changed.

The services provided by most paralegals and legal secretaries are quite distinguishable in the current day. Litigation paralegals are now proficient in conducting legal research and the preparation of pleadings, discovery demands, motions and briefs, without the assistance of an attorney. Courts throughout the United States are cognizant of this and, as a result, fees for paralegal services may now be recoverable in most cases wherever an award of attorney's fees or costs is available.

Courts in many instances also make an allowance for paralegal fees in excess of the amount actually paid for the services to allow the law firm to reap a profit. The prevailing opinion is that this furthers public policy because it is an incentive to offering more affordable legal services to the community.

The United States and New Jersey Supreme Court concur in this opinion. "The United States Supreme Court, in upholding an award of legal fees based on the market paralegal services, stated that the use of paralegal services whenever possible encourages cost-effective legal services by reducing the spiraling cost of litigation.

In conclusion, retaining a paralegal is profitable to law firms, furthers public policy and provides quality legal services to the general public at a fair rate. See case law below.

NATIONAL CASE - Missouri v. Jenkins, 491 U.S. 274, 109 S.Ct. 2463, 105 L.Ed.2d 229 (1989): subsequent negative appellate history at 731 F.Supp. 1437. The U.S. Supreme Court held that in setting a reasonable attorney's fee under 28 U.S.C 1988, a legal fee may include a charge for legal assistant services at market rates rather than actual cost to the attorneys.

Court Sets Guidelines for Labor Relations Services That May Be Provided By Nonlawyers

2006-0839. Ohio State Bar Assn. v. Burdzinski, Brinkman, Czarzasty & Landwehr, Inc., 2006-Ohio-6511.
On Final Report by the Board on the Unauthorized Practice of Law, No. UPL 04-05. Respondents are enjoined from the drafting or writing of contracts.
Moyer, C.J., Resnick, Pfeifer, Lundberg Stratton, O'Connor, O'Donnell and Lanzinger, JJ., concur.
Opinion: http://www.supremecourtofohio.gov/rod/newpdf/0/2006/2006-Ohio-6511.pdf

(Dec. 27, 2006) In a decision announced today, the Supreme Court of Ohio held that:

(1) A nonlawyer does not engage in the unauthorized practice of law by representing another in union-election matters or in the negotiation of a collective bargaining agreement when the activities of the nonlawyer are confined to providing advice and services that do not require legal analysis, legal conclusions or legal training.

(2) It is the unauthorized practice of law for a nonlawyer to draft or write a contract or other legal instrument on behalf of another that is intended to create a legally binding relationship between an employer and a union, even if the contract is copied from a form book or was previously prepared by a lawyer.

The Court's 7-0 opinion, authored by Chief Justice Thomas J. Moyer, also affirmed the authority of the Supreme Court to define and regulate professional activities that involve the practice of law in the area of labor relations.

The case arose from a complaint filed by the Ohio State Bar Association (OSBA) alleging that a Dayton-based management consulting firm, Burdzinski, Brinkman, Czarzasty & Landwehr, and its nonlawyer principals, Bernard F. Burdzinski II and his wife, Connie S. Brinkman-Burdzinski, were providing labor relations services to their third-party corporate clients that constituted the unauthorized practice of law.

The Supreme Court's Board on the Unauthorized Practice of Law reviewed the OSBA complaint. A hearing was conducted before a three-commissioner panel, after which the board adopted the panel's findings of fact and conclusions of law. The board concluded that the Burdzinski firm and Mr. Burdzinski had engaged in the unauthorized practice of law when they negotiated the settlement of union election issues, served as lead negotiator in collective bargaining negotiations, and drafted collective-bargaining agreements on behalf of others. The board also found that Connie Burdzinski had engaged in unauthorized practice when she drafted collective-bargaining agreements. The board recommended that the Supreme Court order the respondents to cease from the same or similar conduct, and order the respondents to reimburse the costs and expenses incurred by the board and the OSBA.

The Burdzinski firm and the cited individuals filed objections to the board's findings, and the Court heard oral arguments in the case earlier this year.

In today's unanimous decision, the Court began by rejecting arguments by Burdzinski that this Court is barred from regulating the activities of labor relations practitioners because that field has been preempted by the federal government. Chief Justice Moyer noted that the U.S. Supreme Court has identified only two categories of cases where state authority is preempted by federal labor laws: “(1) those that reflect the concern that ‘one forum would enjoin, as illegal, conduct which the other forum would find legal' and (2) those that reflect the concern ‘that the [application of state law by] state courts would restrict the exercise of rights guaranteed by the Federal Acts.'

Noting that this case deals solely with the activities of third-party consultants, not with the ability of employers or unions to represent themselves in labor negotiations or elections, the Chief Justice wrote that neither of the circumstances invoking federal preemption were applicable. He also pointed to a line of U.S. Supreme Court decisions consistently deferring to the states in matters involving licensing standards and regulation of lawyers and other learned professions.

With regard to specific consulting services provided by Burdzinski that were found by the board to constitute the practice of law, Chief Justice Moyer wrote that the firm's gathering of information about employee concerns and complaints leading up to union elections, and its development of communication and management strategies to help employers resist unionization of their employees, did not involve legal analysis or require legal training, and therefore were not activities restricted to attorneys.

With regard to the firm's “coaching” of employers on arranging and conducting union elections, Chief Justice Moyer noted that “(n)ormally, advising a client on how to comply with a regulatory scheme would be the practice of law, but in this case … respondents use NLRB-prepared writings, rather than their own analysis or training, to advise their clients. Despite the use of words like ‘challenge,' ‘objection,' and ‘settlement' in the record regarding election matters, these terms are not used as legal terms in this context. Rather, respondents follow a strict set of guidelines published by the NLRB, without analysis or interpretation. Presenting prepackaged legal advice of this nature is not the practice of law.”

Regarding the active role undertaken by Burdzinski's nonattorneys in negotiating collective bargaining agreements, the Chief Justice again cited the NLRB's promulgation of very specific issue guidelines and rules as a pivotal factor. “While we have previously found negotiating on behalf of another to be the practice of law, our precedent is distinguishable from the facts of this case. … Respondents here are not negotiating the settlement of a legal dispute, nor are they negotiating a business or real-estate contract in which all elements of the contract are negotiable. Rather, there is a clearly defined scope of allowable subjects for negotiation. Because of the close federal regulation and the limited subjects for negotiation, we conclude that respondents' conducting of negotiations on behalf of their clients with employees or employees' representatives during collective bargaining is not the practice of the law.”

On the remaining issue of drafting actual collective bargaining contracts, the Chief Justice wrote: “We have consistently held that drafting contracts or legal instruments on behalf of another is the practice of law. The fact that respondents may copy the contracts or use forms from a form book does not change the nature of the act. In Geauga Cty. Bar Assn. v. Canfield (2001) … the respondent argued that simply copying a form contract was not the practice of law. We rejected that argument. … The drafting or writing of a contract or other legal instrument on behalf of another is the practice of law, even if the contract is copied from a form book or contract previously prepared by a lawyer.”

Based on this analysis, the Court's ruling enjoins the Burdzinski firm and its principals from the further drafting or writing of contracts, but permits them to continue to advise their clients on union election matters.

Contacts
Ian Robinson, 330.337.8761, for the Ohio State Bar Association.

Thomas P. Whelley II, 937.463.4931, for Bernard Burdzinski et al.

Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions: http://www.supremecourtofohio.gov/ROD/newpdf/. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."

Lawyers will regulate paralegals
October 23, 2006 - Toronto

Author: Ian Johncox
Kawartha Lakes This Week

Ontario has passed a law that will regulate paralegals. This is good news. Until now, what hashas it taken to be a paralegal? Call yourself one. That's it. No training required. No liability insurance. No minimum standards. No discipline for bad ones.

I've seen some good paralegals. I've seen some bloody awful ones too. Of course, the skeptics will say the same about lawyers. At least lawyers have certain minimum training, have passed competency exams, pay liability insurance in case they screw up, and they can get booted out of the profession if they are unethical. Until now, there was virtually nothing you could do about a bad paralegal.

The new law makes paralegal regulation the responsibility of the Law Society of Upper Canada. That is the same body that regulates lawyers.

Some paralegal groups are complaining that lawyers are going to regulate paralegals into oblivion, so that the lawyers can protect their own territory. I think those fears are completely unfounded. If the Law Society does that, the Ontario government will remove the power from them.

There are lawyers who are complaining that the Law Society should not be regulating paralegals. They don't think that the Law Society should be helping the "competition."

I think the Law Society is the best party to regulate the paralegals. If it was any other organization, the Law Society and the paralegal regulator would be in a constant battle for territory and to figure what the paralegals can and cannot do.
With the Law Society in charge, it will have to strike a balance that protects the public and preserves the roles of both paralegals and lawyers. I'm hoping that it will find the right balance.

I don't consider paralegals to be competition for me in my practice. We are simply not going after the same work. On the other hand, there are paralegals doing some things that are way out of their league.

In my view, paralegals should never be doing separation agreements or family law. They should not be doing wills and estate planning. They should not be doing real estate transactions.   These are areas of law where the amateurs think that it is just filling in the blanks on a "standard" form. It isn't.

I am anxious to see what regulatory scheme the Law Society passes for paralegals. I hope that the result is a system of legal service providers where it is clear what they can and cannot do. If it works, lawyers will be able to charge a fair fee for what is really lawyer's work, no longer trying to compete with low-cost, untrained paralegals. Properly trained paralegals will be able to charge a fair price, knowing that they will be recognised as competent.

Most importantly, the consumer will no longer be playing Russian Roulette with paralegals. They will know that each paralegal has passed at least some minimum requirements. That, my friends, is a good thing.

Ian Johncox is a partner with Mason Bennett Johncox law firm in Whitby. He can be reached at ijohncox@whitbylawyers.com

Paralegal regulation on cusp of becoming law

October 19, 2006 - CNW TLEBEC - Toronto

The Law Society of Upper Canada is pleased the Ontario government today passed important legislation extending protection to consumers who hire independent paralegals.


Bill 14, The Access to Justice Act, expands the public interest mandate of the Law Society to include independent paralegals, as requested by Attorney General Michael Bryant in January 2004.
    T

The legislation comes into effect May 1, 2007 and is the culmination of several years of consultation about the best approach to paralegal regulation. It reflects recommendations submitted by the Law Society in its 2004 report to the Attorney General.

"The Law Society has a mandate to govern in the public interest. This legislation will provide better protection and recourse for consumers of all legal services," says Law Society Treasurer Gavin MacKenzie. "Under the
legislation, consumers will have access to paralegals who are regulated, educated, licensed and insured. Paralegals will also play a prominent role in their regulation, through the Law Society."

Except for the creation of a Paralegal Standing Committee, nothing will change in the six months before the legislation comes into effect, and it will be "business as usual" for paralegals and their clients.

The Attorney General will appoint the five paralegals who will be members of the Paralegal Standing Committee, including the chair. The committee's five lawyer benchers and three non-lawyer bencher members will be appointed by the Law Society's governing board. Once formed, the 13-member committee will begin to work on details of the regulatory model.

As well, two paralegals from the standing committee will join the Law Society's governing board, giving them a formal role in the regulation of all legal service providers.

The Law Society will begin taking complaints for the purposes of regulation when the first paralegals are licensed, likely in January 2008.

The areas of practice in which paralegals can work will not change. These include matters before Small Claims Court, provincial boards and agencies, and Provincial Offences Act matters before the Ontario Court of Justice, such as
highway traffic cases.

"The Law Society recognizes the contribution that paralegals make by enhancing access to justice. We are prepared for the challenge of broadening our mandate to include this new group of professionals and look forward to working with them," says Treasurer MacKenzie.

The Law Society intends to make further announcements about the regulation of legal services and independent paralegals in the coming months.

For more information about paralegal regulation, contact the Law Society at 416-947-3300 or 1-800-668-7380. More information about the Law Society can befound at: www.lsuc.on.ca.

For further information: Lisa Hall, Acting Manager, Communications, Law Society of Upper Canada, (416) 947-7625, lhall@lsuc.on.ca; or Roy Thomas Director, Communications, Law Society of Upper Canada, (416) 947-7619, rthomas@lsuc.on.ca

NONLAWYER QUALIFIED REPRESENTATIVES IN AGENCY PROCEEDINGS — WHY IT'S NOT UPL
By Janet Morgan
Bar UPL Counsel Ft. Lauderdale

The Florida Bar News
Volume 33, Number 18
September 15, 2006
Page 7

Most state agencies have an administrative hearing process defined by statute. In these proceedings, a hearing officer receives evidence, reaches a finding of fact, and determines an outcome.

Ordinarily, in proceedings which involve the important legal rights of a party, the representation of a party would constitute the practice of law and would have to be provided by a licensed Florida attorney.

However, because the structure of agencies falls under legislative control, the separation of powers doctrine means that the legislature has the constitutional authority to oust the court’s otherwise exclusive jurisdiction over the practice of law in agency proceedings. Therefore, nonlawyer representation of persons in a state administrative proceeding can, by legislative action, be converted to an “authorized” practice of law.

However, to oust the court’s authority, the nonlawyer representation must be expressly permitted by statute and/or agency rule. If the agency proceeding falls under the Florida Administrative Procedures Act, the enabling statute also requires that the agency rules set up standards of qualification for a representative, allowing a determination of the representative’s ability to perform. In Florida, qualification standards are most often found by reference to Fla. Admin. Code R. 28-106.106, which requires the presiding officer to conduct a step-by-step evaluation of the representative’s knowledge and ability.

If the applicant meets the requirements, the presiding officer then designates the nonlawyer as a qualified representative for the purposes of that proceeding only. There is no such thing as a permanent qualified representative designation. A nonlawyer must meet the standards test in every case in which the nonlawyer applies to appear. While acting as a qualified representative, the nonlawyer must also comply with standards of conduct set out in Fla. Admin. Code R. 28-106.107.

Of course, when acting as a qualified representative, a nonlawyer cannot hold himself or herself out as an attorney at law, or as capable of providing general legal services, and cannot use a title or business name which is misleading to the public.

[Note: This applies at the federal level as well. At both the state and federal level, once an individual (lawyer or non-lawyer) is approved as a representative, they are free to represent who ever hires them as long as the client signs a representation agreement.]