California Business and Professions Code §§ 6400 – 6456

Paralegal Regulation: Two Steps Forward, One Step Back

Thesis

The George Washington University

Master of Paralegal Studies

By

Lori H. Young

December 16, 2011

© Lori H. Young, 2011

i

TABLE OF CONTENTS

Page

INTRODUCTION ...........................................................................................................................1

I. THE PARALEGAL PROFESSION AND DEFINITION OF TITLES ..............................3

A. Unlawful Detainer Assistant (UDA) ........................................................................4

B. Legal Document Assistant (LDA) ...........................................................................5

C. Paralegal ...................................................................................................................7

II. THE CALIFORNIA LEGISLATURE TAKES STEPS TO REGULATE LEGAL

PARAPROFESSIONALS ..................................................................................................9

A. Assembly Bill 1573..................................................................................................9

B. Senate Bill 1418 .......................................................................................................9

C. Assembly Bill 1761................................................................................................10

III. PARALEGALS ARE INDIRECTLY REGULATED BY THEIR SUPERVISING

ATTORNEYS – UDAs AND LDAs ARE NOT REGULATED ......................................17

IV. CONCLUSION – CALIFORNIA NEEDS A REGULATORY AGENCY AND

REGISTRY ENCOMPASSING ALL LEGAL PARAPROFESSIONALS ......................21

1

CALIFORNIA BUSINESS AND PROFESSIONS CODE §§ 6400 – 6456

Paralegal Regulation: Two Steps Forward, One Step Back

INTRODUCTION

The paralegal profession has persistently continued to grow since its infancy in the

1960s.1 This growth has brought a significant increase in roles, responsibilities, and titles

associated with the profession, as well as a push for needed regulation. California has been at the

forefront in regulating the paralegal profession.2 As California legislators took positive steps to

regulate the paralegal profession, the resulting legislation contained very real setbacks for both

the profession and its consumers.

California’s statutes regulating paralegals are complex and convoluted and make it

difficult to determine which legal paraprofessional is qualified and authorized to perform what

type of work. An analysis of the statutes reveals the confusion and risks consumers and attorneys

will encounter when seeking to employ a legal paraprofessional. There is a need for a regulatory

agency and registry to protect legitimate paralegal professionals as well as their consumers.

In the 1990s, the California legislature took the first step in regulating the legal

paraprofessionals. Before the legislature stepped in, a non-lawyer could assume the title of

paralegal or legal assistant without any requirement of education, experience, or direct

supervision by an attorney. The California legislature began with statutory regulation of unlawful

detainer assistants3 (UDAs) and legal document assistants

4 (LDAs). The statutes governing the

1 History and Diversity of Paralegal Education, A Guide to Quality Paralegal Education, National Federation of

Paralegal Associations, http://www.paralegals.org/displaycommon.cfm?an=1&subarticlenbr=116 (last visited

November 28, 2011). 2 Therese A. Cannon, California Regulates Paralegals, American Bar Association, Sept. 18, 2006, available at

http://apps.americanbar.org/legalservices/paralegals/update/cacannon.html (last visited December 15, 2011). 3 Cal. Bus. & Prof. Code § 6400(a) (Deering 2010).

4 Cal. Bus. & Prof. Code § 6400(c) (Deering 2010). The term “legal document assistant” is a person who provides

any self-help service to a member of the public who is representing himself or herself in a legal matter.

2

UDAs and the LDAs fall under Chapter 5.5 Legal Document Assistants and Unlawful Detainer

Assistants.5 A few years later, the California government enacted legislation to regulate the

paralegal profession.6 The statutes governing paralegals fall under Chapter 5.6 Paralegals.

7 Both

Chapters 5.5 and 5.6 appear under the California Business and Professions Code §§ 6400 – 6456.

The statutory requirements for UDAs are different from those that regulate LDAs and

paralegals. The statutory requirements for LDAs are likewise different from those that regulate

paralegals. The codes contain various regulatory, educational, and registration requirements for

each paraprofessional. Navigating the legal paraprofessional system in the state of California is

complicated due to the variety of titles held by a paraprofessional and the complexity of the

associated regulatory codes.

The first section of this paper will discuss the role of UDAs, LDAs, and paralegals -- the

three main types of paraprofessionals regulated under California Business & Professions (B &

P) Code §§ 6400 – 6456. The next section of the paper will examine why the California

legislature took steps to regulate the profession of UDAs, LDAs, and paralegals. It will also

discuss the risk and confusion a consumer or attorney faces when selecting or employing a

paraprofessional to perform substantive legal work. The third section will address how the

supervising attorney indirectly regulates paralegals and how UDAs and LDAs do not have

regulation. Finally, this paper will discuss the need for a single regulatory agency and registry to

oversee legal paraprofessionals. For California’s initial effort to regulate legal paraprofessionals

to be effective, it must take the final step of implementing a regulatory agency and registry for all

legal paraprofessionals. This will enable consumers and attorneys the ability to determine the

types of services available from each category of paraprofessional, including statutory limitations

5 Cal. Bus. & Prof. Code §§ 6400 – 6415 (Deering 2010).

6 Cal. Bus. & Prof. Code §§ 6450 – 6454 (Deering 2011).

7 Cal. Bus. & Prof. Code §§ 6450 – 6456 (Deering 2011).

3

on the paraprofessional’s authority, and whether the paraprofessional has any record of

discipline.

I. THE PARALEGAL PROFESSION AND DEFINITION OF TITLES

Generally, the terms “paralegal” and “legal assistant” have the same meaning. The

American Bar Association (ABA) currently defines a paralegal as synonymous with legal

assistant.8 “A legal assistant or paralegal is a person, qualified by education, training or work

experience, employed or retained by a lawyer, law office, corporation, governmental agency or

other entity and performs specifically delegated substantive legal work for which a lawyer is

responsible.”9 California B & P Code § 6454 broadly defines paralegal to include the terms

“paralegal, legal assistant, attorney assistant, freelance paralegal, independent paralegal, and

contract paralegal.”10

The Bureau of Labor Statistics lumps paralegals and legal assistants into the same

category. The Bureau projects growth of employment for paralegals and legal assistants to be

28 percent between 2008 and 2018.11

This projected growth for the paralegal profession is faster

than the average growth of other professions in the nation.12

The demand for paralegals will

continue to remain steady, as the population necessitates legal services in many areas of law.13

Consumers and employers are hiring paralegals to perform tasks once done by attorneys

to reduce costs and increase the availability and efficiency of legal services.14

“Tasks performed

by a paralegal include case planning, development, and management; legal research;

interviewing clients; fact gathering and retrieving information; drafting and analyzing legal

8 ABA, Standing Committee on Paralegals, http://www.americanbar.org/groups/paralegals.html (last visited

December 15, 2011). 9 Id.

10 Cal. Bus. & Prof. Code § 6454 (Deering 2011).

11 U.S. Bureau of Labor Statistics, http://www.bls.gov/oco/ocos114.htm (last visited October 17, 2011).

12 Id.

13 Id.

14 Id.

4

documents; collecting, compiling, and utilizing technical information to make an independent

decision and recommendation to the supervising attorney.”15

Paralegals can further assist

consumers and employers by carrying out additional responsibilities such as “representing clients

before a state or federal administrative agency if statute, court rule, or administrative rule or

regulation permits that type of representation.”16

The use of paralegals, when appropriate, is

preferred when the expense is to be borne by others. As stated by the Court, “Nor do we approve

of the wasteful use of highly skilled and highly priced talent for matters easily delegable to non-

professionals or less experienced associates . . . A Michelangelo should not charge Sistine

Chapel rates for painting a farmer’s barn.”17

Paralegals are a vital component in the legal field as

they perform substantive legal work for consumers and attorneys.

Today, there are approximately 28,300 paralegals employed in the state of California.18

Over the past two decades, the California legislature has taken steps to define and refine the

various titles used by legal paraprofessionals. The three main titles defined by statute are

unlawful detainer assistants,19

legal document assistants,20

and paralegals.21

A. Unlawful Detainer Assistant

An unlawful detainer assistant (UDA) is a non-lawyer who “renders assistance or advice

in the prosecution or defense of an unlawful detainer proceeding, including any bankruptcy

petition that may affect the unlawful detainer claim or action.”22

A UDA must comply with

specifics of the statute to become registered. For instance, a UDA must register with the county

15

Cal. Bus. & Prof. Code § 6450(a) (Deering 2011). 16

Id. 17

Ursic v. Bethlehem Mines, 719 F.2d 670, 677 (3rd

Cir. 1983). 18

State of California, Employment Development Department, available at

http://www.labormarketinfo.edd.ca.gov/aspdotnet/SupportPage/AllOccPrj.aspx?soccode=232011 (last visited

November 13, 2011). 19

Cal. Bus. & Prof. Code § 6400(a) (Deering 2010). 20

Cal. Bus. & Prof. Code § 6400(c) (Deering 2010). 21

Cal. Bus. & Prof. Code § 6450(a) (Deering 2011). 22

Cal. Bus. & Prof. Code § 6400(a) (Deering 2010).

5

clerk in the county where the UDA has its principal place of business,23

and present a bond for

recording for $25,000 or in lieu of the bond, deposit cash in the same amount with the county

clerk.24

Once registered, the UDA must include the registration number, expiration date, and

county where registered, with the UDA’s contact information, on any advertisement or

documents prepared by the UDA.25

The registration is effective for two years and the UDA must

renew the registration every two years.26

Denial of the registration will result if the registrant has

“a conviction of a felony, or a misdemeanor under B & P § 612627

or B & P § 612728

.”29

In

addition, a person may not register as a UDA (or LDA) during any period of disbarment or

suspension from the practice of law.30

There are no educational requirements to become a UDA. There is no supervision by an

attorney. There is no regulatory agency overseeing the profession. The regulations for UDAs are

minimal.

B. Legal Document Assistant

A legal document assistant (LDA) is a non-lawyer who “provides self-help service31

to a

member of the public who is pro per in a legal matter.”32

There is no supervision by an attorney.33

23

Cal. Bus. & Prof. Code § 6402 et seq. (Deering 2010). UDAs and LDAs must register in the county where the

principal place of business is located and in any other county in where the UDA or LDA performs acts. 24

Cal. Bus, & Prof. Code § 6405 (Deering 2010). 25

Cal. Bus. & Prof. Code § 6408 (Deering 2010). 26

Cal. Bus. & Prof. Code § 6406 (Deering 2010). 27 Cal. Bus. & Prof. Code § 6126 (Deering 2011). A person who is not an active member of the State Bar of

California, and advertises as practicing or otherwise practices law is guilty of a misdemeanor. 28

Cal. Bus. & Prof. Code § 6127 (Deering 2011). A person assuming to be an officer or attorney of a court and

acting as such, without authority, is guilty of a misdemeanor. 29

Cal. Bus. & Prof. Code § 6406(b)(1) (Deering 2010). 30

Cal. Bus. & Prof. Code § 6402 (Deering 2010). 31 Cal. Bus. & Prof. Code § 6400(d) (Deering 2010). Self-help services include completing legal documents in a

ministerial manner, with the selection of forms by the pro per in a legal matter, and completing the documents at the

person's specific direction. Other self-help services include providing general published factual information to the

pro per, written or approved by an attorney, pertaining to legal procedures; making published legal documents

available to a person who is pro per; and filing and serving legal forms and documents at the specific direction of the

pro per in a legal matter. 32

Cal. Bus. & Prof. Code § 6400(c) (Deering 2010). 33

Cal. Bus. & Prof. Code § 6401(b) (Deering 2010).

6

LDAs formerly referred to themselves as “independent paralegals.”34

LDAs have the same

registration and bonding requirements as UDAs. Dissimilar between the two, LDAs must meet

specific educational or work experience requirements to apply for registration.35

Once registered,

the LDA may choose to become a member of the California Association of Legal Document

Assistants (CALDA) by paying an annual fee.36

CALDA provides an online search engine to the

public to locate registered members throughout the state of California.37

For example, an online

search for an LDA in the city of Los Angeles, reveals contact information38

and expertise.39

Reviewing the types of services offered by a specific LDA, explains how a consumer could think

that the preparation of the stated legal documents are under the supervision of an attorney.

34

CALDA, Who are Legal Document Assistants? (LDA) http://www.calda.org/Visitors.asp#WhoAreLDA (last

visited December 4, 2011.) 35

Cal. Bus. & Prof. Code § 6402.1 (Deering 2010). An LDA must have a high school diploma or general

equivalency diploma, and either a minimum of two years of law-related experience under the supervision of an

attorney, or a minimum of two years of experience, prior to January 1, 1999, providing self-help service. Another

option is a baccalaureate degree in any field and either a minimum of one year of law-related experience under the

supervision of an attorney, or a minimum of one year of experience, prior to January 1, 1999, providing self-help

service. The last options are a certificate of completion from a paralegal program that is institutionally accredited but

not approved by the ABA, that requires successful completion of a minimum of 24 semester units, or the equivalent,

in legal specialization courses, or a certificate of completion from a paralegal program approved by the ABA. 36

CALDA, Membership, http://www.calda.org/Members/Membership_Form.asp?T=j (last visited December 3,

2011). 37

CALDA, Search for CALDA Member, http://www.calda.org/Search.asp (last visited December 3, 2011). 38

Id. Search for CALDA Member in city of Los Angeles reveals registration No., expiration, address, and telephone

numbers. 39

Id. Search for CALDA Member in city of Los Angeles reveals expertise to include Affidavit of Death,

Agreements, Bank Levies, Case completion, Child Custody, Child Support, Civil Actions, Civil Answers,

Conservatorships, Court Filing, Court Runner, Credit Repair, Debt Settlement, Deed of Trust, Deed Research and

Recording, Deeds, Dissolution, District Attorney Child Support, District Attorney Responses, Divorce, Durable

Power of Attorney, Evictions, Expungements, Family Law discovery preparation, Family Law matters, Fax Filing

Agency, FAX Service, Foreclosure prevention, Grant Deeds, Guardianships, Habla Espanol, Health Care Directives,

Homestead, Immigration and Citizenship, Lawsuits, Lease Assistance - Residential, Legal Separation, Legal Typing

Services, Liens, Limited Conservatorships, Living Trusts, Marital Settlement Agreements, Marital Settlement

Stipulations, Mechanic's Liens, Misc. Legal Forms, Modification of Child Support, Mortgage Services for Divorcing

Spouses, Name Changes, Nullity, Paternity, Personal Injury, Postnuptial Agreements, Powers of Attorney, Powers

of Attorney for Health Care, Powers of Attorney for Property, Prenuptial Agreements, Promissory Notes, Quit

Claim Deeds, Rent Increases - Residential, Response, Restraining Orders, Resumes, Revocable Living Trusts, Seal

criminal records, Self Help Service, Separations, Settlement Agreements, Small Claims, Social Security Disability,

Spousal Property Petition, Spousal support, Stipulated Judgments, Stipulations, Stop Foreclosures, Subpoena,

Summary Dissolution, Support, Temporary Restraining Orders (TROs), Termination Notices, Title Search, Trust

Transfer Deeds, Trusts, Typing documents, Unlawful detainer, Visitation, Wage Garnishments, Wills.

7

C. Paralegal

A paralegal is a non-lawyer “who performs substantial40

legal work under the direction

and supervision of a licensed attorney.”41

Like LDAs, a person only qualifies as a paralegal

through specific education,42

training, or work experience. The paralegal “contracts with or is

employed by an attorney, law firm, corporation, governmental agency, or other entity, and

performs substantial legal work under the direction and supervision of an attorney.”43

Once a

paralegal meets the educational requirements, the paralegal must complete eight hours of

mandatory continuing legal education (MCLE) every two years.44

The MCLE45

consists of “four

hours in legal ethics and four hours in general law or an area of specialized law.”46

Paralegals, unlike UDAs and LDAs, do not register with an agency. Paralegals are self-

regulating, meaning the “paralegal is responsible for maintaining a record of the paralegal's

40

Cal. Bus. & Prof. Code § 6450(a) (Deering 2011). Substantial legal work includes case management, legal

research, gathering information, analyzing and drafting legal documents, making recommendations to the

supervising attorney based on technical information, and representing clients before state and federal administrative

agencies as allowed by law, among other tasks. 41

Cal. Bus. & Prof. Code 6450(a) (Deering 2011). 42

Paralegals have options to meet the educational requirements pursuant to Cal. Bus. & Prof. Code § 6450(a). The

first option is a certificate of completion of a paralegal program approved by the ABA. The second option is a

certificate of completion of a paralegal program at, or a degree from, a postsecondary institution that requires

successful completion of 24 semester units, or its equivalent, in law-related courses, accredited by a national or

regional accrediting organization or approved by the Bureau for Private Postsecondary and Vocational Education.

The third option is a baccalaureate degree or an advanced degree in any subject, with a minimum of one year of law-

related experience under the supervision of a California licensed attorney for the past three years, with a written

declaration from the attorney stating that the person is qualified to perform paralegal tasks. The last option, a

grandfather provision that ended December 31, 2003, is a high school diploma or general equivalency diploma, with

a minimum of three years of law-related experience under the supervision of a California licensed attorney for the

past three years, and a written declaration from the attorney stating that the person is qualified to perform paralegal

tasks. 43

Cal. Bus. & Prof. Code § 6450(a) (Deering 2011). 44

Cal. Bus. & Prof. Code § 6450(d) (Deering 2011). Cal. Bus. & Prof. Code § 6070 (Deering 2011). The legal

education activities must be approved by the State Bar of California or by a State Bar of California approved

provider. 45

Cal. Bus. & Prof. Code § 6070 (Deering 2011). The State Bar of California must approve the legal education

activities and the State Bar of California approves the educational providers. 46

Cal. Bus. & Prof. Code § 6450(d) (Deering 2011).

8

certifications,”47

including continuing education records, and reporting the certifications to the

supervising attorney.48

In summary, UDAs and LDAs need not work under the direction and supervision of a

licensed attorney; paralegals must. Paralegals and LDAs must meet specific educational

requirements; UDAs do not. UDAs and LDAs must register in each county where they perform

services and post a bond; paralegals do not. LDAs may choose to register with CALDA; UDAs

and paralegals do not have such an association to register. Paralegals must complete eight hours

of MCLE every two years; UDAs and LDAs do not. UDAs and LDAs have a statute that

prohibits disbarred or suspended attorneys from registration; paralegals do not.

The following chart is a snapshot of the regulated legal paraprofessionals. Paralegals are

most regulated, then LDAs, and last, UDAs.

Regulated Paraprofessionals

Work Under

Supervision

of Attorney

Register with

County Clerk

and Post Bond

Meet

Educational

Requirements

Meet

MCLE

Register

with

Assoc.

Perform if

Disbarred/

Suspended

Attorney

UDAs X

LDAs X X Voluntary

Paralegals X X X X

47

Id. 48

Id.

9

II. THE CALIFORNIA LEGISLATURE TAKES STEPS TO REGULATE LEGAL

PARAPROFESSIONALS

A. Assembly Bill 1573

In 1993, California state Assemblyman Burton introduced Assembly Bill 1573 “to

provide consumer protection for persons using self-help clinics.”49

As stated in the legislative

history, “The Legislature finds and declares that there currently exist numerous unscrupulous

individuals and associations of individuals who purport to offer protection to tenants from

eviction.”50

“These unscrupulous individuals and associations represent themselves as legitimate

tenants’ rights associations, legal consultants, professional legal assistants, paralegals, attorneys,

or typing services.”51

The despicable acts in deceiving and defrauding tenants, causing economic

losses to property owners, and clogging the courts with lawsuits had reached epidemic

proportions.52

Difficulty existed for law enforcement officials to prosecute the unscrupulous

individuals warranting the registration requirement.53

This Assembly Bill marked the beginning

of regulation for UDAs.

B. Assembly Bill 1418

Turning now to legal document assistants, California Senator Rosenthal introduced

Senate Bill 141854

in 1998, following the steps of Assembly Bill 1573. The purpose of the bill

was “to provide similar consumer protection of all uses of self-help services setting forth clear

guidelines on what services a legal document assistant may provide.”55

The bill became effective

49

Cal. A.B. 1573, 1993-1994, Reg. Sess. (1993). 50

Section 1 of Stats. 1993, c. 1011 (Cal. A.B. 1573). 51

Id. 52

Id. 53

Id. 54

Cal. S.B. 1418, 1998, Reg. Sess. (1998). 55

Id.

10

on January 1, 2000, forming another paraprofessional title, legal document assistants, who

provide legal services directly to the public without direction or supervision by an attorney.56

C. Assembly 1761

Now addressing the most regulated of the three paraprofessionals, the paralegal. On

January 18, 2000, California state assembly members Marilyn Brewer and Rod Pacheco

introduced Assembly Bill 1761 as a consumer protection bill sponsored by California Alliance of

Paralegal Associations (CAPA).57

The intent of the bill was to differentiate between paralegals

“who work under the supervision of an attorney and those who provide self-help services directly

to the public.”58

The bill also would provide an advanced differentiation between a “paralegal”

and other paraprofessionals. To qualify as a paralegal, an individual would have to work under

the supervision of an attorney, meet the higher standard of education, and comply with the

ongoing mandatory continuing education.59

The bill fell under the category of Professions and Vocations: Paralegals establishing

qualifications of a paralegal.60

The Secretary of State filed Assembly Bill 1761 on September 14,

2000, and the bill became codified and known as California Business and Professions Code §

6450 on January 1, 2001.61

By sponsoring this bill, CAPA triggered a reduction in the “fly-by-

night paralegal schools62

because their students did not meet the education requirements now

mandated by law.”63

CAPA’s efforts also enabled some “county district attorneys to close down

56

Diana P. Wade, The California Paralegal War - Who does it Really Protect?, CALDA Articles, Feb. 2000. 57

Stacey Hunt, Testing the Waters, 28 Paralegal Today, July-Sept. 2011, at 30. 58

Memorandum from Marilyn Brewer, Assemblywoman of Cal. Legislature, to Archived Record of AB 1761,

regarding Most Frequently Asked Questions Regarding AB 1761, (November 2, 2000).

http://www.caparalegal.org/pdf/ABFAQ.pdf 59

Id. 60

Cal. A.B. 1761, 1999-2000, Reg. Sess. (2000). 61

Id. 62

Author’s interjection, “become a paralegal in only three weekends.” 63

Stacey Hunt, Testing the Waters, 28 Paralegal Today, July-Sept. 2011, at 32.

11

paralegal storefront operations giving legal advice to the public”64

without the supervision of an

attorney.

CAPA’s vision of a paralegal as a regulated profession came to fruition by CAPA’s hard

work and diligence. “For California, B & P § 6450 represented a major milestone in efficiently

protecting the legal interests of the public and the qualification and integrity of the paralegal

profession.”65

It also served to “protect the attorneys who benefit from the use of paralegals and

wish to minimize attorney-related liability under this law.”66

History has demonstrated that California’s effort to regulate legal paraprofessionals has

been ineffective, especially as to UDAs and LDAs who are, by statute, not supervised by

attorneys. In Brockey v. Moore,67

a “California trial court had to issue a statewide injunction and

restitution order against Walter Moore, his partners, and successors,” due to the unauthorized

practice of law.68

The court “prohibited them from using the names ‘Legal Aid,’ ‘Legal

Services,’ or ‘Legal Aid Services’.”69

The court “ordered them to advertise the results of the

lawsuit in the newspapers of the 22 cities Moore advertised in so that all former consumers had

the opportunity to get their money back.”70

Moore, a non-lawyer, had targeted low-income individuals71

by advertising and using

business names with derivatives of legal aid, misleading consumers. The court stated, “Where a

statement is targeted at unsophisticated members of the public, it is appropriate to adjust the

64

Id. 65

Thomas F. Horlick, Ten Years Later: Why Section 6450 Matters More than Ever, 28 Paralegal Today, July-Sept.

2011, at 32. 66

Id. 67

Brockey v. Moore, 131 Cal. Rptr. 2d 746 (Ct. App. 2003). 68

Gary Rhoades, Fair Housing Center, Others Join Forces Against Man Posing as “Legal Aid,” National Fair

Housing Advocate Online, June 26, 2002, available at http://bit.ly/uBxGCh. 69

Id. 70

Id. 71

Id.

12

‘reasonable consumer’ standard accordingly.”72

These individuals, mobile home tenants served

with Summonses, paid Moore for legal assistance when they faced evictions from their homes.73

The Southern California Housing Rights Center, Legal Services of Northern California, and two

law firms represented “the low-income tenants in a complaint against Moore for deceptive

business practices, false advertising, unauthorized practice of law, and providing unlawful

detainer assistance without registration.”74

“The plaintiffs obtained three jury verdicts against

Moore under the Consumer Remedies Act, the State Bar Act for unauthorized practice of law,

and the Unlawful Detainer Assistance Act.”75

76

The jury also found that Moore had acted with

fraud, malice or oppression.77

Judge Richard McEachen made a further ruling against Moore for

violating California’s Unfair Business Practices and False Advertising laws.78

Soon after the trial, the California Department of Justice (DOJ) issued a legal alert to

warn consumers.79

As stated by the DOJ, “The true non-profit legal services organizations in

California provide indispensable free legal assistance to consumers who can’t afford to hire an

attorney but need help while facing dangerous domestic violence situations, evictions from their

homes and other emergencies.”80

“But consumers must be wary of deceptive, for-profit

companies that purport to offer services from quality, non-profit legal services organizations but

72

Brockey v. Moore, 131 Cal. Rptr. 2d 746, 757 (Ct. App. 2003). 73

Id. at 749. 74

Gary Rhoades, Fair Housing Center, Others Join Forces Against Man Posing as “Legal Aid,” National Fair

Housing Advocate Online, June 26, 2002, available at http://bit.ly/uBxGCh. 75

Now known as Cal. Bus. & Prof. Code §§ 6400 – 6415. 76

Gary Rhoades, Fair Housing Center, Others Join Forces Against Man Posing as “Legal Aid,” National Fair

Housing Advocate Online, June 26, 2002, available at http://bit.ly/uBxGCh. 77 Id. 78

Id. 79

Id. 80

Id.

13

instead may provide shoddy advice that can actually hurt consumers and interfere with their legal

rights.”81

Similarly, in People v. Landlords,82

the court ruled that the defendant self-help service for

eviction proceedings had “committed the unauthorized practice of law by advertising its services,

generating individualized forms, and advising some clients on which forms to prepare.”83

Non-

lawyers may not give legal advice. There is a fine line when a non-lawyer conducts an interview

and gains information from the client to complete the proper forms for a legal proceeding

without giving legal advice or committing the unauthorized practice of law.

Similar to Moore and Landlords, a current case, People v. Law Offices of Kramer,84

involves legal professionals who targeted individuals facing declining values in their homes and

foreclosure in these tough economic times.85

On this issue, Attorney General Kamala D. Harris

announced on August 18, 2011, “that the California Department of Justice, in conjunction with

the State Bar of California, has sued multiple entities accused of fraudulently taking millions of

dollars from thousands of homeowners who were led to believe they would receive relief on their

mortgages.”86

Three law firms, three other lawyers, and fourteen other defendants, face the

accusation of “working together to defraud homeowners across the country through the deceptive

marketing of ‘mass joinder’ lawsuits.”87

“The defendants' alleged misconduct violates the

following laws: false advertising, in violation of B & P § 17500; unfair, fraudulent and unlawful

business practices, in violation of B & P § 17200; unlawful running and capping, in violation of

B & P § 6152(a), e.g., a lawyer unlawfully paying a non-lawyer to solicit or procure business;

81

Id. 82

People v. Landlords Prof’l Srvs., 264 Cal. Rptr. 548 (1989). 83

Fernando Gaytan & Deborah A. Kelly, Unauthorized Entry, 27 Los Angeles Lawyer 22, Nov. 2004. 84

People v. Law Offices of Kramer, Los Angeles Sup. Ct., Northwest Dist., No. LC094571. 85

Attorney General Kamala D. Harris Sues Law Firms Engaged in National "Mass Joinder" Mortgage Fraud, State

of California Department of Justice, August 18, 2011, available at http://oag.ca.gov/news/press_release?id=2552. 86

Id. 87

Mass joinder lawsuits are lawsuits with hundreds, or more, individually named plaintiffs.

14

improper fee splitting (defendants unlawfully splitting legal fees with non-attorneys); and failing

to register with the Department of Justice as a telephonic seller.”88

“The defendants in this case fraudulently promised to win prompt mortgage relief for

millions of vulnerable homeowners across the country," said Attorney General Harris.89

"Innocent people, already battered by the housing crisis, were targeted for fraud in their moment

of distress."90

These attorneys and non-attorneys preyed upon those most vulnerable.

The State Bar of California seized the practices of the three law firms and three lawyers.91

Noteworthy for this paper is that the State of California Department of Justice “seized the

practices of the following non-attorney defendants: Attorneys Processing Center, LLC; Data

Management, LLC; Gary DiGirolamo; Bill Stephenson; Mitigation Professionals, LLC; Glen

Reneau; Pate Marier & Associates, Inc.; James Pate; Ryan Marier; Home Retention Division;

Michael Tapia; Lewis Marketing Corp.; Clarence Butt; and Thomas Phanco.”92

These particular

persons may be UDAs, LDAs, or paralegals who contract with unscrupulous attorneys.

Whatever the case, “it is unlawful for any person, firm, corporation or association, or any

employee thereof with direct or indirect intent to perform professional services to induce the

public to enter into any obligation relating to the services, which is untrue or misleading.”93

“A

statement is false or misleading if members of the public are likely to be deceived.”94

A

noncompliant paralegal that works under the direction of a supervising attorney does harm to the

legal profession as much as a UDA or LDA who engages in unscrupulous practices.

88

Id. AG Harris Sues Law Firms. 89

Id. 90

Id. 91

Id. 92

Id. 93

Cal. Bus. & Prof. Code § 17500 (Deering 2011). 94

Chern v. Bank of Am., 544 P.2d 1310, 1316 (1976).

15

As stated by the court, “Attorneys and counselors at law . . . have for centuries been

required to undergo certain courses of preparation and to assume certain solemn obligations . . .

not only with respect to their relation to the courts, but also with regard to their relation to the

public at large.”95

The public interest must “be safeguarded against the ignorance or evil

dispositions of those who may be masquerading beneath the cloak of the legal and supposedly

learned and upright profession.”96

Noncompliant paralegals masquerade beneath the cloak of

compliant paralegals that choose to abide by the code and elevate the profession.

“The public, in its dealings with the legal profession, deserves at our hands a protection

from incompetency, as well as from knavery.”97

“The maintenance of that standing at the bar,

which the public interest requires, demands not alone a sterling honesty in the individual lawyer,

but an intellectual capacity as well.”98

The same holds true for paralegals and other legal

paraprofessionals. Oftentimes the paralegal employed by an attorney meets with the public and

serves as the conduit for the attorney. The public in its dealings with the paralegal profession

deserve protection from incompetency, as well as knavery. Attorneys who seek to employ

paralegals deserve protection from incompetency, as well as knavery. Neither the public nor

attorneys have a search mechanism to ascertain if a paralegal is compliant with B & P § 6450.

Consumers who seek to employ UDAs or LDAs deserve similar protection. Consumers

do not have an effective mechanism to ascertain whether a UDA or LDA is compliant with B &

P § 6400. Neither attorneys nor consumers have any way to determine whether a paralegal,

UDA, or LDA has a record of discipline.

95

State Bar of Cal. v. Super. Ct. of Los Angeles County, 207 Cal. 323, 331 (1929). 96

Id. 97

In re Application of Cate, 77 Cal. App. 495, 504 (Cal. App. 1926). 98

Id.

16

Significantly, the names of the non-attorney defendants in People v. Law Offices of

Kramer do not appear in the CALDA membership directory.99

In 2009, there were

“approximately 750 registered LDAs in California.”100

Currently, 215 LDAs appear in the online

directory hosted by CALDA.101

This suggests that approximately 67 percent of the LDAs are not

members of CALDA. This also suggests 67 percent of the LDAs do not have their registered

information readily available to the public.

The lack of a mandate that LDAs register with CALDA makes it difficult for consumers

to perform a check to determine if an LDA is registered. The consumer is at risk when hiring an

LDA who is not registered. Such is the case of the individuals involved in the “mass joinder”

lawsuit defrauding homeowners. If a registered LDA is guilty of the unauthorized practice of law

or guilty of violating California Business and Professions Code, Chapter 5.5., Legal Document

Assistants and Unlawful Detainer Assistants, Sections 6400 – 6415, the county clerk shall revoke

the registration of the LDA.102

In People v. Fremont Life Insurance,103

the court affirmed the ruling that “appellant life

insurance company had engaged in deceptive business practices in connection with the sale of

certain annuity policies.”104

“The trial court imposed civil penalties, granted injunctive relief, and

required the insurance company to offer restitution.”105

“Preparation of wills, trusts, and other

legal instruments by annuity sales representatives constituted unauthorized practice of law.”106

This case indicates there are other professionals acting as non-lawyers submitting to

99

CALDA, Search for a CALDA Members, http://www.calda.org/Search.asp (last visited December 3, 2011). 100

Angie Walters, AB 590 and Legal Document Assistants Might be Just the Silver Lining that Californians Need in

the Current Recession, October 14, 2009, available at http://www.calda.org/Articles.asp. 101

215 LDAs in California appear in CALDA’s directory, http://www.calda.org/Search.asp (last visited December 3,

2011). 102

Cal. Bus. & Prof. Code § 6413 (Deering 2011). 103

People v. Fremont Life Ins. Co., 104 Cal. App. 4th

508 (2002). 104

Id. 105

Id. 106

Fernando Gaytan & Deborah A. Kelly, Unauthorized Entry, 27 Los Angeles Lawyer 22, Nov. 2004.

17

unauthorized practice of law without regard to the regulations in place for UDAs, LDAs, or

paralegals. The recommended registry for the three main paraprofessionals in the legal industry

cannot gather all persons who submit to unauthorized practice of law.

III. PARALEGALS ARE INDIRECTLY REGULATED BY THEIR SUPERVISING

ATTORNEYS – UDAs AND LDAs ARE NOT REGULATED

The regulatory provisions of B & P § 6400 – 6456 statute have been in existence for over

ten years. When “the California legislature enacted these regulatory provisions for the paralegals,

there was not a governmental agency created or assigned to oversee or enforce the

provisions.”107

The code relies upon voluntary compliance. There are legal paraprofessionals

who do comply and those who do not. The reasons for noncompliance range from innocent to

complete ignorance to disregard of the law.

In fact, “there are disbarred and suspended attorneys who practice as paralegals.”108

This

“condones unethical behavior by not disciplining it.”109

This type of practice is what “puts the

public at risk when they seek competent ethical representation, and it creates negative

perceptions of the legal profession.”110

There is good cause to strengthen B & P § 6450 to protect

consumers and attorneys. Without an adequate enforcement mechanism, the noncompliant legal

paraprofessional will compromise the profession.

The supervising attorney indirectly regulates the paralegal. For attorneys, the California

Rules of Professional Conduct encompass the responsibility of supervising a paralegal.111

Since

107

ABA General Information about State Activity,

http://apps.americanbar.org/legalservices/paralegals/pararegdir/home.cfm (last visited October 20, 2011). 108

Stephen R. Bough & Rebecca A. Cull, Off the Team, but Not Out of the Game: Disbarred and Suspended

Attorneys Practicing as Paralegals, National Federation of Paralegal Associations, Professional Development,

available at http://www.paralegals.org/displaycommon.cfm?an=1&subarticlenbr=342 (last visited December 3,

2011). 109

Id. 110

Id. 111

Cal. Bar R., Prof’l Conduct R.3-110 discusses the duty to supervise the work of subordinate attorney and non-

attorney employees or agents.

18

the implementation of B & P § 6450, attorneys must be cognizant of the liability the attorney

stands to face if a paralegal is noncompliant with the education requirements and mandatory

continuing education. “Although an attorney is not responsible for every detail of office

procedure, it is an attorney’s responsibility to supervise the work of his or her staff.”112

Knowledge of the paralegal’s compliance with B & P § 6450 is an important component of the

attorney’s professional responsibility.

The State Bar of California became an administrative arm of the California Supreme

Court and the regulatory agency for attorneys in 1927.113

The State Bar of California is a

mandatory bar, requiring “all persons admitted and licensed to practice law be members, except

justices and judges of courts of record.”114

As stated by the court, “The membership, character

and conduct of those entering and engaging in the legal profession have long been regarded as

the proper subject of legislative regulation and control.”115

“It has never heretofore been

considered, so far as we have been made aware, that, at least in this commonwealth, the exercise

of a reasonable degree of regulation and control over the profession and practice of the law,

constituted an intrusion into the domain of our state organization constitutionally assigned to the

judicial department thereof.”116

“From almost the inception of our state government, statutory

provision has been made for the admission, disbarment, suspension or disciplining of members

of the legal profession.”117

These members are the attorneys who supervise paralegals.

California attorneys operate under an independent set of rules primarily enforced by the

State Bar of California. The rules, known as the California Rules of Professional Conduct,

112

Hu v. Fang, 127 Cal. Rptr. 2d 756, 758 (Ct. App. 2002). 113

State Bar of California Overview, available at http://www.calbar.ca.gov/AboutUs/StateBarOverview.aspx (last

visited December 15, 2011). 114

Cal. Bus. & Prof. Code § 6002 (Deering 2011). 115

State Bar of Cal. v. Super. Ct. of Los Angeles County, 278 P. 432, 435 (1929). 116

Id. 117

Id.

19

“regulate the professional conduct of members of the State Bar through discipline.”118

The Board

of Governors adopted and the California Supreme Court approved the rules pursuant to statute to

protect the public and to promote respect and confidence in the legal profession.119

“The rules

and any related standards adopted by the Board are binding on all members of the State Bar.”120

Included is Rule 3-110 of the California Rules of Professional Conduct, which sets forth the duty

to supervise the work of a non-attorney.121

This relates to the supervision of a paralegal,

governed by B & P § 6450.

The import of B & P § 6450 is gaining some recognition by consumers, attorneys, and

judges.122

California paralegals applauded a decision issued by U.S. District Judge David F. Levi

of the Eastern District of California.123

“In James Sanford v. GMRI, Inc., dba Red Lobster, 2005

U.S. Dist. LEXIS 27581, the court, in an unprecedented decision, refused to award claimed

paralegal fees in an ADA accessibility suit because the paralegals failed to meet the requirements

of B & P § 6450(a).”124

“A second ADA case out of the Eastern District six months later, White

v. GMRI, Inc., dba Red Lobster, (E.D. Calif. 2006) 2006 U.S. Dist. LEXIS 22200, precluded

recovery of paralegal fees for failure to provide documentation that B & P § 6450(c) was

met.”125

In July 2010, the California Rules of Court (CRC) amended Rule 7.703(e), which

pertains to an attorney’s ability to charge a probate estate for paralegal work product in the

118

Cal. Bar R., Prof’l Conduct R.1-100. 119

Id. 120

Cal. Bar R., Prof’l Conduct, Preamble, http://rules.calbar.ca.gov/Rules/RulesofProfessionalConduct.aspx (last

visited October 19, 2011). 121

Cal. Bar R., Prof’l Conduct R.3-110. 122

Two cases have cited to B & P § 6450, e.g., James Sanford v. GMRI, Inc., dba Red Lobster and White v. GMRI,

Inc., dba Red Lobster. Cal. R. Ct. 7.703 has cited to B & P § 6450. 123

Stacey Hunt, Testing the Waters, 28 Paralegal Today, July-Sept. 2011, at 31. 124

Id. 125

Id.

20

performance of extraordinary services,126

separate and aside from attorney charges. Rule

7.703(e) requires the supervising attorney to substantiate the use of the paralegal in the

performance of extraordinary services and refers to B & P § 6450.127

The statement for request

of paralegal fees must describe “(1) the qualifications of the paralegal, including education,

certification, continuing education, and experience; the performed acts were under the direction

and supervision of an attorney; the paralegal satisfies the minimum qualifications of education;

and the paralegal meets the mandatory continuing education requirements.”128

The statement

must also include: “(2) the hours spent by the paralegal and the hourly fee for the services; (3) a

description of the services performed by the paralegal; (4) why it was appropriate to use

paralegal services; and (5) demonstrates that the total amount requested for extraordinary

services was appropriate use of paralegal assistance.”129

CRC Rule 7.703(e) only mandates a demonstration of a paralegal to comply with B & P

6450 for probate related cases.130

The rule focuses on probate paralegals being compliant since

the paralegal’s work product is the basis for a bill for extraordinary services on an hourly basis.

This compensation is in addition to the percentage-based statutory fee for the attorney’s services,

due by the estate for the attorney’s services.131

There are other areas of law, such as family law, guardianships, and conservatorships,

where attorneys bill consumers for paralegal work product at an hourly rate. Consumers have a

right to know if a paralegal is compliant with B & P § 6450 if paying for paralegal services. A

126

Cal. R. Ct. 7.703(b) (Deering 2011). Examples of extraordinary services include legal services in connection with

sale of property, services to secure a loan to pay estate debts; litigation undertaken to benefit the estate or to protect

its interests; defense of a will contest; extraordinary efforts to locate estate assets; coordination of ancillary

administration; and accounting for a deceased, incapacitated or absconded personal representative. 127

Cal. R. Ct. 7.703(e) (Deering 2011). 128

Id. 129

Id. 130

Id. 131

Cal. R. Ct. 7.703(a) (Deering 2011).

21

remedy for this situation is to expand the court rule to include billing for all paralegal services so

the consumer is aware if the paralegal does or does not comply with the code. Paralegals perform

substantive work for attorneys at lesser hourly rates. This affords the consumer a balance in legal

fees for the tasks performed by the legal team.

IV. CONCLUSION – CALIFORNIA NEEDS A REGULATORY AGENCY AND

REGISTRY ENCOMPASSING ALL LEGAL PARAPROFESSIONALS

There are options available through legislation to create an agency responsible for the

regulation and licensing of legal paraprofessionals. California Government Code § 9148.4 sets

forth guidelines for consideration by the Legislature for a new state board or a new category of

licensed professional.132

As set forth in the code, “[t]he plan shall include (a) A description of

the problem that the creation of the specific state board or new category of licensed professional

would address; (b) The reasons why this proposed state board or new category of licensed

professional was selected to address this problem, including alternatives considered.”133

“Alternatives that should be considered include whether a current state board, agency, or current

category of licensed professional exists to address the problem; the various levels of regulation

or administration available to address the problem; and addressing the problem by federal or

local agencies.”134

Other considerations include “the specific public benefit or harm that would

result from the establishment of the proposed state board or new category of licensed

professional, the specific manner in which the proposed state board or new category of licensed

professional would achieve the benefit, and the specific standards of performance to be used in

reviewing the subsequent operation of the board or category of licensed professional.”135

Another consideration is “the specific source or sources of revenue and funding to be utilized by

132

Cal. Gov’t Code § 9148.4 (Deering 2011). 133

Id. 134

Id. 135

Id.

22

the proposed state board or new category of licensed professional in achieving its mandate, and

how the necessary data and other information is provided to the Legislature with the initial

legislation and forwarded to the policy committees in which the bill will be heard.”136

Many of

these issues addressed in this paper are within the guidelines to consider the creation of a state

agency.

The ultimate purpose of a regulatory agency is to protect consumers.137

Similarly, the

ultimate purpose of professional licensing statutes is to protect the consumer-public.138

The

creation of an agency responsible for the regulation and licensing for legal paraprofessionals will

afford the necessary protection to the consumer of legal paraprofessional services. The agency

can effectively hold legal paraprofessionals responsible to be properly qualified, licensed, and

registered as required by B & P § 6400 – 6450. Such an agency is also necessary to ensure that

such services are delegated to those persons who can perform them legally and competently.

Legal paraprofessionals continue to make a difference in both the legal profession and the

legal community. As the profession grows, consumers and attorneys will increasingly employ

legal paraprofessionals. Consumers and attorneys need protection from noncompliance and

knavery. The California legislature must take the final step of implementing a regulatory agency

and registry for the legal paraprofessionals.

136

Id. 137

Dept. of Consumer Affairs, available at http://www.dca.ca.gov/about_dca/morabout.shtml (last visited December

15, 2011). 138

Borror v. Dep’t of Inv., 15 Cal App. 3d 531, 540 (1971).