IT'S A MATTER OF ECONOMIC ADVANTAGE
The economic advantages derived from employing paralegals are widely known within the legal and business communities. Paralegals perform tasks delegated to them by attorneys, which is proper "so long as the lawyer maintains a direct relationship with his client, supervises the delegated work, and has complete professional responsibility for the work product." At a time when clients are concerned about the delivery of cost-effective legal services, attorneys are able to provide clients with a higher caliber work product at a lower cost through the use of paralegals.
WHAT IS PARALEGAL FEE RECOVERABILITY?
When paralegals perform legally substantive work on legal matters, attorneys, whether in the private or public sector, bill their clients for the paralegal's time. Until the late 1980s, compensation for paralegal time was calculated using one of the three following methods:
- as a windfall for attorney - as a part of the attorney's overhead or costs of operation;
- at the actual cost of paralegal - at the paralegal's salary; or
- at market rate - the client is charged an hourly billing rate.
COURTS ADDRESS PARALEGAL FEES
In the early 1970s, courts in several jurisdictions began to address the awarding of paralegal fees. Decisions were inconsistent, both as to the amount of compensation awarded, and whether the paralegal time was even compensable.
In 1988, the issue of the rate of compensation for paralegal time came before the United States Supreme Court in Blanchard v. Bergeron; however, for reasons unrelated to the method and rate of paralegal compensation, a decision was not rendered by the Court.
In 1989, the issue returned to the United States Supreme Court and produced a landmark decision permitting the award of attorney fees for paralegal time, significantly, at market rate. Missouri, et al. v. Jenkins, et al., 491 U.S. 274, 109 S.Ct. 2463 (1989).
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Missouri upheld the grant of fees for paralegal services based on a market value. Justice Brennan stated, "... [B]y encouraging the use of lower-cost paralegals, rather than attorneys wherever possible, permitting market-rate billing of paralegal hours 'encourages cost-effective delivery of legal services ..." (FN10).
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With the issue of whether paralegal time was compensable decided, the courts turned their attention to establishing the factors on which fee awards could be made. The primary factors became the qualifications of the person performing the work, the actual work performed, the detail of the records submitted in support of the fee application and the market rate for paralegal time.
REQUIREMENTS OF APPLICATIONS FOR COMPENSATION FOR PARALEGAL TIME
Generally, the courts award, or deny when appropriate, fees to compensate professionals and paraprofessionals for all actual, necessary services performed. Reasonable compensation is usually based on the nature, extent and value of such services, the time spent on such services, and the cost of comparable services. Rules and procedures governing the court of the jurisdiction in which an application for attorney fees will be made should be reviewed.
PARALEGAL QUALIFICATIONS
An affidavit attesting to the paralegal's qualifications should be attached to the application for fees. One method of accomplishing this is to supply a copy of the paralegal's resume detailing the paralegal's level of education and continuing education, experience and any other qualifications, such as Registered Paralegal status.
DETAILED TIME RECORDS
The paralegal must be performing "legally substantive work," not clerical work. Records detailing the legally substantive tasks performed on a legal matter should be thorough, accurate and honest with sufficient detail to enable the court to determine that the work performed was necessary. MARKET RATES
Fees usually will be compensated at market rate, which is based on the typical charge for a person of comparable education and experience performing a certain level of task in that area of law and geographical locale.
SOURCES OF INFORMATION ABOUT PARALEGAL FEE RECOVERABILITY
- NFPA's Fees for Paralegal Services: Are They Recoverable? - An Update (rev. 1995)
This research paper describes the issues associated with the recovery of compensation for paralegal time in attorney applications to the court for fees. It explains the history and development of case law before federal and state courts, recent legislative changes that affect the recovery of fees for paralegal time and the factors considered in awarding such fees.
- NFPA 1997 Paralegal Compensation and Benefits Report ('91, '93, and '95 editions available)
This publication will provide nationwide market billing rates based on geographical markets, specialty practice areas and level of qualifications of paralegals in the profession.
- NFPA's "Paralegal Responsibilities" (rev. 1998)
This publication itemizes the typical duties of paralegals by specialty and includes NFPA's publication What is a Paralegal?.
- NFPA's Model Act for Paralegal Fee Recoverability, which may be used in conjunction with NFPA's Guide Concerning Legislative Issues.
- NFPA article entitled "Why Do the Courts Keep Denying Paralegal Fees in Attorney Applications for Fees?" (1995)
WHAT HAS NFPA DONE TO ASSIST TO ENSURE THAT PARALEGAL FEES ARE RECOVERABLE?
NFPA educates its members about the history and developments associated with paralegal fee recoverability. Information is provided in:
- Inside NFPA, a monthly report sent to the state and local association representatives
- National Paralegal Reporter, a quarterly journal sent to NFPA members and other legal professionals
- Press releases concerning important developments in the courts and legislatures affecting paralegal fees sent to NFPA members, other legal professionals and members of the public
NFPA conducts continuous research on the subject of compensation for paralegal time, some of which is accomplished by monitoring case law and legislative activities
NFPA provides information to attorneys, members of the judiciary and members of allied legal professional organizations
NFPA provides, upon request, assistance to paralegals and attorneys, including the results of its latest research on this matter
NFPA files, when appropriate, amicus curiae briefs in support of the recovery of paralegal fees
NFPA files written testimony and gives verbal testimony in support of the recovery of paralegal fees proposed in legislative measures before state and federal legislatures
NFPA developed model legislation providing for the recoverability of paralegal fees that was adopted as a model act at the NFPA 1995 Annual Meeting. At the same time, NFPA provided a comprehensive step-by-step guide to legislative procedures for use by NFPA member associations in proposing this and other legislation on matters affecting the paralegal profession.
NFPA established an Internet presence on the World Wide Web at http://www.paralegals.org to ensure that information concerning the cost-efficient utilization of paralegals is available to members of the legal and business communities, as well as members of the public.
NFPA maintains a database, which includes cases across the US on paralegal fee recoverability.
Additional information concerning paralegal fees is also available from:
- The American Bar Association Model Guidelines for the Utilization of Legal Assistant Services (1991).
- State and local laws and court decisions regarding paralegal fee recoverability.
- A resolution supporting the award of paralegal fees in attorney applications for fees adopted by the ABA in August 1993.
NFPA MISSION STATEMENT
The National Federation of Paralegal Associations, Inc., promotes a
global presence for the paralegal profession and leadership in the
legal community.
© June 1998, National Federation of Paralegal Associations, Inc. All rights reserved.
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