How to Set up a Paralegal Practice

Written by: Amanda Hamilton, NALP
Published On: 24 Jan 2020

With solicitors and barristers charging upwards of £150 per hour, many people are now turning to Paralegals who can do much the same as a solicitor or barrister (with a few exceptions) but for a fraction of the cost.

Now is a good time to set up your own Paralegal practice – but before you do, here is some advice which may assist in helping you to avoid the most common pitfalls and also may help you to decide whether to proceed towards a career as a professional paralegal.

The first thing you need to do is gain a paralegal or legal qualification or at the very least get some paralegal training and then, as much experience as possible. This doesn’t have to be with a solicitor or barrister, because nowadays you can gain the relevant legal experience by working in a variety of different employment environments. Examples could be: local authorities, national health service, HMRC, CPS and company in-house legal departments.

Once you’ve gained some knowledge of law and legal procedure and have gained three or more years’ relevant legal experience, you need to decide whether you wish to specialize in one area of law or would like to be a general practitioner.

Now for the hard part: setting up in practice.

Remember that your clients are consumers of legal services. They want to know that the person offering legal assistance is qualified and competent to do so. It would help if you were a member of a membership body such as NALP which has been a Paralegal organization for thirty years and is well established in the legal sector.

Licence to Practise: being a member of NALP entitles you, subject to the requisite qualifications and/or experience and fulfillment of eligibility criteria, to apply for a Licence to Practise in the areas of law in which you can provide evidence of experience. This means that NALP has done its due diligence on you and thoroughly vetted you and your credentials.

Eligibility Criteria to gain a Licence to Practise:

1. Qualifications - you must have a minimum Level 3 qualification and a minimum of three years’ experience

2. Experience only – you may not have qualifications but can provide evidence of a minimum of five years’ experience

3. Professional Indemnity Insurance (PII): covering you for the work that you do.

You have your Licence to Practise, what next?

You should ensure that there’s no inference in any marketing for your business, whether via a website of Facebook Page, that you are a solicitor or barrister. This is what is known as ‘Holding Out’ and is illegal. So, in all your marketing you have to make it clear that you are a paralegal and not a solicitor or barrister. Even if you do not mention this specifically, you may be held accountable if consumers can make an assumption.

You must also be very much aware that there are certain activities you are unable to perform. You must know these ‘reserved activities’ and ensure that you don’t undertake such activities, making it clear in any contract for services with your client, what this means, and what these activities are.

Apart from the ‘reserved activities’, you can operate in much the same way as a solicitor, e.g. you can operate as a Paralegal Firm and have partners.

Sole practitioner, partnership or company?

So, you’re ready to start…but do you carry on your business in your own name, in partnership with other paralegals or incorporate as a limited company and use another name?

This is entirely up to you, but beware: There are duties you have to comply with if you set up your business as a company. For example, you need to submit company accounts each year, and this may be burdensome and costly.

As a sole practitioner, you can work under your own name and do not have such legal obligations.  However, you would need to submit your annual tax return each year and be subject to income tax on your earnings.

The advantage of setting your business up as a limited company is that your financial obligations may be limited if something goes terribly wrong.

For further advice and assistance on the financial aspects of setting up in business, it is recommended that you get independent financial advice.

Setting up your own Paralegal practice can be very rewarding – but do make sure you follow the advice above to give both your clients and yourself the expertise, confidence and protection that you both deserve.

Amanda Hamilton is Chief Executive of the National Association of Licenced Paralegals (NALP), a non-profit Membership Body and the only Paralegal body that is recognised as an awarding organisation by Ofqual (the regulator of qualifications in England). Through its training arm, NALP Training, accredited recognised professional paralegal qualifications are offered for a career as a paralegal professional. 

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Twitter: @NALP_UK


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