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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.
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 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.
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.]
NEWS RELEASE
Ohio State Bar Association, 1700 Lake Shore Drive, Columbus, Ohio 43204
SUBJECT: OSBA Establishes Credentialing Program for Paralegals
CONTACT: Kenneth A. Brown 800-282-6556 or 614-487-4426
COLUMBUS, Ohio (June 27, 2006)The Ohio State Bar Association (OSBA) has established a credentialing program for paralegals. Individuals meeting the eligibility requirements and passing a written examination will be designated as an OSBA Certified Paralegal.
Credentialing of paralegals in Ohio will assist lawyers and law firms in identifying the best qualified paralegal professionals, said OSBA President Jane Taylor, and clients and the public will know that these paralegals meet uniform standards of professionalism. No such standards currently exist.
By definition, a paralegal eligible for OSBA certification 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 substantive legal work for which a lawyer is responsible.
An applicant must meet the definition of a paralegal and may be eligible to sit for the written examination only after a successfully meeting specified education/experience, continuing legal education, and reference requirements:
Education/Experience Requirement:
A bachelors degree in any discipline and satisfactory completion of a paralegal studies program and a minimum of one year full time experience as a practicing paralegal (or its equivalent 2,000 hours); OR
A bachelors degree in any discipline or associate degree in paralegal studies with a minimum of three years full time experience as a practicing paralegal (or its equivalent of 6,000 hours), OR
Satisfactory completion of a paralegal studies program with a minimum of five years full time experience as a practicing paralegal (or its equivalent of 10,000 hours), OR
A high school diploma or equivalent plus seven years full time experience as a practicing paralegal (or its equivalent of
14,000 hours). To be eligible under this section, an applicant must have been employed as a paralegal before December 31,2006.
For purposes of this section, paralegal studies is defined as a program which consists of a minimum of 60 semester hours (or equivalent clock or quarter hours) of which at least 15 semester hours (or equivalent clock or quarter hours) are substantive legal courses.
Continuing Legal Education Requirements:
Attendance at a minimum of 12 credit hours of continuing legal education in courses approved by the Ohio Supreme Court Commission on CLE or the National Association for Legal Assistants or the National Federation of Paralegal Associations in the three years immediately preceding the application. At least two and a half credit hours of the 12 shall be in legal ethics, professionalism and substance abuse.
Reference Requirements:
A minimum of three professional references, including two from attorneys in good standing with the Supreme Court of Ohio who have direct knowledge of the applicants skills and work as a paralegal. The other reference may include judges, magistrates, hearing officers, mediators, arbitrators and educators who have direct knowledge
of the applicants skills and work as a paralegal.
Written Examination:
The applicant seeking certification must pass a written examination of suitable length and complexity. The written exam
will include substantive and procedural law, legal research, ethics, communication, and law office management. General testing competencies will include critical and analytical thinking, communication (both oral and written), and computer skills. Areas tested may include the following:
Substantive & Procedural Law
American Legal System
Civil Rules and Procedure
Administrative Law
Bankruptcy
Contracts
Business Organizations
Criminal Law
Probate and Estate Planning
Real Estate
(Applicants will choose at least two
of the italicized substantive topics in which to be
tested)
Legal Research and Writing
Ethics
Communication
Computer Knowledge
Law office Management
The certification period for an OSBA Certified Paralegal is four years. Biennial reporting is required to maintain certification. At the end of the certification period, a paralegal may be recertified if the continuing legal education and reference requirements continue to be met.
A Paralegal Certification Board will be established with members appointed by the OSBA president. The purpose of the OSBA Paralegal Certification Board shall be to grant, revoke or re-grant certification as an OSBA certified paralegal. The Certification Board will determine eligibility, administer the written exam and set passage rates.
Applications will be available after January 1, 2007.
The Ohio State Bar Association, founded in 1880, is a voluntary association representing approximately 25,000 members of the bench and bar of Ohio as well as nearly 4,000 legal assistants and law students. Through its activities and the activities of its related organizations, the OSBA serves both its members and the public by promoting the highest standards in the practice of law and the administration of justice.
U.S. Bureau of Labor Statistics
The BLS Occupational Outlook Handbook 2010 – 2011, recently out, projects that the paralegal profession will grow much faster than average, meaning a gowth of more that 20% between through 2018. It is anticipated that paralegals will continue to be hired in the areas of intellectual property, elder care, healthcare, international law, criminal and environmental law. The BLS also noted certification proposals for paralegals and cited to the AAPI certification as one of those proposals. You may read the statistical report at http://www.bls.gov/oco/ocos114.htm.
1st District Court of Appeals - Florida
In a recently published case out of Florida, June 25, 2010, the First District Court of Appeals denied a Petition for Writ of Certiorari on the issue of the Circuit Court’s determination of attorney fees, which included paralegal fees, and the contingency risk multiplier used by the court in its’ decision.
The basis for appeal was that the prevailing party, Respondent’s, were awarded legal fees, and after an evidentiary hearing was held, the county court applied the requisite multiplier to the fee award, which also included paralegal fees. The Petitioner’s appealed, arguing that the contingency risk multiplier should not have been applied to the paralegal fees.
In its’ decision, the Florida court cited Missouri vs. Jenkins, 491 U.S. 274 (1989), which was recently reaffirmed in Richlin Security Service Co. vs. Chertoff, 128 S. Ct. 2007 (2008), with respect to the issue of paralegal fee recovery, stating that these cases clearly establish the principle that the paralegal’s work is a component of the attorney’s ultimate work product.
You may read the decision of the Florida Court of Appeals at the link below.http://opinions.1dca.org/written/opinions2010/06-25-2010/10-0565.pdf
Ohio Supreme Court Adopts Changes to UPL Rules
August 2, 2010
The Ohio Supreme Court has authorized the investigation and prosecution of Unauthorized Practice of Law (UPL) cases starting September 1, 2010, in accordance with the revised changes to the Supreme Court of Ohio Rules, specifically, Section 4 of Gov. Bar. Rule VII and Gov. Bar. Rule VI. The proposed revisions to the Rules will provide caseload assistance for the volunteer attorneys who investigate and prosecute UPL cases. Additionally, other changes to Rule VII revised the definition of UPL, added another non-attorney commissioner to the UPL board, authorized the annual election of the chair and vice-chair of the UPL board, refined the procedure for requesting a consent decree or settlement agreement and made non-substantive changes to conform with the Court’s Rule Drafting Manual. The amendment to Gov. Bar. Rule VI provides for identifying the Board of Commissioners on Grievances & Discipline as the proper venue for UPL complaints against suspended attorneys.
To view the proposed changes and modifications to the Rules, click on the following link:
http://www.supremecourt.ohio.gov/PIO/news/2010/ruleAmend2_080210.asp
Kentucky Paralegal Association Rolls Out Certification Exam
The Kentucky Paralegal Association will roll out their Certified Paralegal Program on November 13, 2010, as a means of implementing Kentucky Supreme Court Rule 3.700 for paralegals in Kentucky. The ultimate purpose of the self-regulation program is to improve the quality of legal service in Kentucky and make it more readily available to the public. Prerequisites for sitting for the CKP examination include: graduation from an ABA approved course of paralegal studies or a program that is in substantial compliance with ABA approved guidelines; or, graduation from an accredited college or university with a Bachelors Degree and one (1) year of paralegal work experience, verified by a supervising lawyer; or, five (5) years of substantive paralegal work under the supervision and direction of an attorney.
Information and study reference materials may be viewed at www.kypa.org.
For technical quesitons or items related to the content found on this site please email webmaster@aapipara.org
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