Posts Tagged ‘Virtual Paralegals’

Are You Using Virtual Paralegals and Outsourced Support? Make Sure You Comply with Ethical and Professional Obligations

September 2nd, 2016 By Virtual Paralegal Services

Guideline 1 of the American Bar Association Model Guidelines for the Utilization of Paralegal Services states the following:

A lawyer is responsible for all of the professional actions of a paralegal performing services at the lawyer’s direction and should take reasonable measures to ensure that the paralegal’s conduct is consistent with the lawyer’s obligations under the rules of professional conduct of the jurisdiction in which the lawyer practices.

In other words, if your law firm outsources paralegal services, you are ultimately responsible for all tasks delegated to the paralegal service provider and the quality of work performed. But what constitutes “reasonable measures” when determining whether the paralegal’s conduct is consistent with your ethical obligations to your client and your profession?

For many solo and small law firms, delegating tasks to a paralegal is a daunting, but critical step towards cost-effectively delivering exceptional service and growing the practice. However, certain steps should be followed before outsourcing to minimize the risk of legal and ethical issues.

  1. Communicate Your Requirements

Obviously, a paralegal service provider will work with multiple law firms. Each law firm has different preferences and requirements for performing various tasks. If you’re going to outsource paralegal services, you must clearly communicate how you expect work to be done. You must also familiarize paralegals with all relevant provisions of your state’s rules of professional conduct.

For example, what types of information may be disclosed by email, and what types may not? How must client data be protected on computer networks? Do you require the use of encryption? If so, what encryption standard do you require? What is your policy for tracking time? These and other requirements should be documented to avoid confusion and minimize the risk of ethical and professional violations.

  1. Protect Client Confidentiality

Client confidentiality is sacred. Paralegals must understand and fulfill their duty to preserve and protect client confidentiality on behalf of your law firm. No information related to the representation should be revealed under any circumstances, in or out of the office.

It is reasonable to expect that confidential client information will be exposed to non-lawyers, including both in-house and third-party personnel, who perform work on a particular case. However, the lawyer is obligated to carefully train, instruct and supervise such personnel to ensure that all client confidences and secrets are respected. Most states have specific guidelines related to protecting client confidentiality when the services of associates, legal assistants, paralegals, etc. are utilized.

Confidentiality procedures and policies should be documented to provide assurance that paralegals will adhere to all relevant rules of professional conduct. At the same time, it is incumbent upon the paralegal to learn and understand guidelines related to the preservation of confidentiality to minimize the risk of an ethics violation.

  1. Identify and Avoid Conflicts

Just like an attorney should work solely for the benefit of the client, the attorney must also demand the same from a paralegal to prevent conflicts of interest. Because paralegals are often employed by multiple law firms simultaneously, attorneys should screen paralegals to determine if personal relationships, financial interests, previous employment, etc. would cause a conflict.

For example, some states suggest that a law firm should not hire a paralegal that was previously employed by a firm that is representing an opposing party. Although disqualification rules that might apply to a lawyer do not apply to a paralegal, every effort should be taken to ensure client confidentiality and avoid conflict of interest.

Virtual Paralegal Services

Our highly qualified, senior level paralegals offer on-demand paralegal services that allow you to outsource with confidence. Virtual Paralegal Services requires paralegals to participate in quarterly training and to complete 10 hours of continuing education each year. Let us make sure the requirements of your firm and your state’s rules of professional conduct are met. Contact us today.

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Are You Using Virtual Paralegals or Outsourced Support? Make Sure Billing is Correct and Ethical.

August 4th, 2016 By Virtual Paralegal Services

Organizations, large and small, are under constant pressure to improve operational efficiency. This often involves outsourcing certain tasks such as:

  • Recruiting
  • Hiring
  • Training

Why? Paying full-time employees just isn’t a financially feasible option for many smaller companies. Plan B? They outsource to pay-as-you-go services such as virtual paralegals on an as-needed basis to effectively meet their client needs.

A side benefit of outsourcing is that a paralegal does not have the same jurisdictional restrictions as the attorney, according to American Bar Association (ABA) guidelines. In other words, the physical location of the paralegal doesn’t matter as long as they’re working under the direct supervision of an attorney who is licensed in the jurisdiction of their practice.

Are you outsourcing the right way?  

How do you know that you are charging correctly and ethically for these services?

According to the ABA guidelines for using paralegal services, “The Model Rules and most states require lawyers to make fee arrangements with their clients and to clearly communicate with their clients concerning the scope of the representation and the basis for the fees for which the client will be responsible.”

In other words, law firms should disclose what work will be handled by paralegals and how the client will be charged for these services. To ensure accurate billing and meet ethical obligations, a law firm should closely monitor the activity of and communicate regularly with the paralegal and ensure that nothing goes to the client without attorney approval.

The U.S. Supreme Court ruled in the case of Missouri v. Jenkins that a law firm may charge for paralegal services at market rates, not just the actual cost to the firm. In addition, the ABA states that paralegals must only be compensated for the quantity, quality and value of their work. Compensation must not be contingent on the outcome of a case.

Although the ABA does not provide specific restrictions for marking up paralegal fees, the law firm must follow ABA guidelines for establishing a reasonable fee for these services. Again, these fees must be disclosed to the client. These guidelines apply to any type of outsourcing. Failure to do so could result in client disputes.

According to The National Law Journal, the law firm Chadbourne & Parke charged Virgil Waggoner $20,000 for legal research services that cost the firm only $5,000. As a result, Waggoner’s attorney, Patricia Meyer & Associates, filed a lawsuit, alleging “unfair business practices, unjust enrichment, fraud and deceit.”

Criteria for paralegal compensation varies from jurisdiction to jurisdiction, so it is important for law firms to understand their jurisdiction’s criteria before hiring and billing for paralegal and other services.

Virtual Paralegal Services makes it possible for solo and small law practices to better serve clients and control costs while meeting ethical standards. Contact us to schedule a consultation and to learn more about our on-demand paralegal services.

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Should I Incorporate? The ABCs of Business Structures

April 29th, 2016 By Virtual Paralegal Services

So, you’re starting a business. What now? How will you structure it? There are many choices to consider. Some of the more common choices are:

  • Sole proprietorship
  • Corporation
  • S corporation
  • Limited liability company
  • Partnership

Each has specific nuances, legal requirements and tax implications, so the decision will be based on individual business needs. Here is a brief overview of the most common ones:

Sole Proprietorship: This is the most basic and common business structure. Individuals who identify as freelancers, consultants or independent contractors are usually sole proprietors.  In this structure, the individual and the business are generally treated as the same entity, as there is no formal set up.  An individual’s assets are not separated from that of the business and the individual is personally liable for the business’ debt.

Corporation: A corporation is a legal entity that is owned by shareholders.  It is formed in accordance with the laws of the state where the corporation is registered.  The administrative costs and tax implications of setting up a corporation are such that it is usually larger companies that choose this business structure.  Corporations are a separate tax paying entity.  In other words, a shareholder of the corporation who is also an employee of the corporation will pay their taxes on their wages, but the corporation is also responsible for applicable taxes, including any taxes owed when dividends are paid to shareholders.  This is what is sometimes referred to as “double taxation.” The business structure of a corporation generally protects shareholders’ personal assets.

Limited Liability Company: As its name suggests, the limited liability company (LLC) is a business structure that protects its members’ personal assets.  The owners of an LLC are usually called members.  While the process to set up a limited liability company varies from state to state, in many instances the following is required:

  • Choose and register your business name, ensuring that no one else has already established an entity with the same name;
  • File the Articles of Incorporation, which is a document that contains basic information such as the limited liability company name, its members’ names, and the address of the business;
  • Establish an Operating Agreement, which provides guidelines and rules among the members of the limited liability company; and
  • Make necessary announcements – some states require LLCs to publish an announcement in a newspaper or other publication according to that state’s rules.

S Corporation: Businesses that want some of the benefits of a corporation, but do not want the same tax liabilities may choose an S Corporation if they qualify.  S Corporations allow business profits and losses to flow through personal tax returns of the shareholders.  Any shareholder who works for an S Corporation must be paid a “reasonable salary” in order for the S Corporation to avoid IRS tax penalties.  An S Corporation provides some protection against personal liability of shareholders.

Partnership: A partnership is a business entity where two or more people share ownership.  Partners share in the profits and losses of the business. The process to form a partnership is simpler than some other business structures and usually involves registering the business and its name through the secretary of state.  Partners are not shielded from personal liability, and they all share responsibility of all business debts, even if incurred because of another partner.

Once you choose the business structure that best suits you, Virtual Paralegal Services can help.  We can assist with checking for name conflicts, drafting bylaws or operating agreements, stock certificates and other necessary documents.

Let us make the process easier for you, so that you may focus on your business. Contact us today to discuss your unique needs.


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Writing Your Law Firm’s Employee Manual? Don’t Forget the Confidentiality Agreement!

April 26th, 2016 By Virtual Paralegal Services

Confidentiality is at the heart of all aspects of the attorney client relationship. Clients are able to fully confide in the attorney they hire knowing that the attorney has an obligation to protect their information. The importance of confidentiality is emphasized in the American Bar Association along with all State Bar Association’s confidentiality rules in their Rules of Professional Conduct. Protection of client information is so critical. It protects the client before, during and long after the relationship is terminated.

What is a confidentiality agreement?

A confidentiality agreement is a detailed outline of the rules of confidentiality, employee actions that violate confidentiality and consequences, should the employee violate the rules. By signing the agreement, the employee creates a contract by which they agree not to disclose privileged information.  By having an employee agree to be bound by confidentiality rules, it protects the attorney from having a situation arise whereby they are in violation of the rules of professional conduct.  Rule 1.6(c) under the The Model Rules of Professional Conduct specifically put an obligation on attorneys to make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.

Confidentiality agreements important for non-lawyer employees

While most attorneys understand the importance of confidentiality, a law firm usually employs a number of non-lawyer employees who may not. Most of the employees will have access to protected information and it is vital to ensure they keep it protected. To safeguard your client’s information, it’s wise to require employees to sign a confidentiality agreement.

Breaching a confidentiality agreement

The most thorough confidentiality agreements leave the attorney and employee confident they understand their legal obligations. The confidentiality agreement may even list examples of what types of actions constitute disclosure. For example:

  • The employee may understand they cannot speak about the clients’ personal information to someone outside of employment, but may not realize that they can violate confidentiality by providing information to someone close to the client whom they think is entitled.
  • The employee may accidentally send client information to the wrong person.
  • The employee may not understand that speaking about privileged client information in a public place can violate confidentiality.

Confidentiality agreements can and should have harsh consequences. By signing the confidentiality agreement, which outlines consequences for violation, the employee understands what is at stake. Should the violation result in termination of employment, the attorney has evidence that they sufficiently explained the importance of confidentiality in the workplace and that the employee was aware of the consequences.

How can Virtual Paralegal Services help?

In addition to creating confidentiality agreements, the paralegals at VPS can:

  • draft thorough firm policies and employee handbooks
  • assist in continuing education training on various HR topics including confidentiality
  • help to safeguard your client information

If you are interested in discussing how Virtual Paralegal Services can contribute to your firm’s success, contact us today.


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