Many solicitors openly acknowledge their reliance on non-lawyers in building a successful practice. Yet that acknowledgement does not always translate into an enhanced standing for secretarial, administrative, paralegal and other non-legally qualified employees.
The terminology used to define anyone who is not a qualified solicitor reflects a continuing imbalance. James O’Connell, chief executive of the Institute of Paralegals (IOP), says that terms such as ‘support staff’ or ‘unadmitted staff’ that are used to differentiate between qualified solicitors who are admitted to the roll and the rest, are ‘prejudicial’.
‘It is the language of "them and us". We, the solicitors, are the ones that count and everyone else is just a necessary evil to support us in doing the real work,’ O’Connell argues. This ‘them-and-us’ culture is rooted in the idea that value is not generated by support staff, who are simply seen as a cost. As Patricia Wheatley Burt, director and founder of management consultants Trafalgar – The People Business, explains: ‘It’s the same in manufacturing where you have direct [production] and indirect staff. The view always was that the indirect staff were cost and the direct staff were contributors, but that is nonsense.’
To be sure, not all firms have such a dim view of their non-lawyers. O’Connell says that in commercial law firms this hierarchy does not exist: ‘The solicitor earning the money is the same as the man and the woman "turning the lathes" – or making the sale. They are just part of a team and their job is delivering a product. The support staff have a role that is not subservient to that [of solicitors].’
What is more, the demarcation line between ‘fee-earners’ and ‘non fee-earners’ – another way to separate those who produce revenue by charging clients and those who do not – is blurring. Wheatley Burt says: ‘Support staff are becoming fee-earners so the concept of fee-earner and non fee-earner will start to be blown apart and I think this will be a very healthy thing.’ She cites the example of a law firm in which legal secretaries have the initial conversation with the prospective client.
The approach in commercial law firms is about to hit the rest of the legal sector as the introduction of alternative business structures (ABSs) dismantles existing business models by opening up ownership of legal services providers to non-lawyers. At the same time, the definition of ‘support staff’ is becoming wider, as a plethora of high-flying professional managers who have nothing to do with the law are taken on by commercially-minded firms to help them with the strategic and operational management of their business.
This in turn (amid likely consolidation and a more competitive environment) will create pressures on law firms with traditional partnership models to adapt their retention policies, in order to offer better career development opportunities for non-solicitors.
Emma Holt, managing partner at Pannone, says the firm is making significant changes at the top to bring in non-solicitors. She says: ‘Traditional law firms have to be modern and innovative in the way they retain, attract and reward all their staff.’ Holt explains that the combined impact of the Legal Services Act and a deep recession means that the legal profession needs to be more business-like and learn from other industries: ‘Our desire is to make sure that all of those who contribute well to our business are properly rewarded.’
The risk of not adapting is the departure of your best people, whatever their role. TLT senior partner Robert Bourns says: ‘I think in the context of ABSs, and changes in the market, there is a very significant risk of loss of the talent that is to be found among support staff.’
Contribution of paralegals
There are no official figures for paralegals. However, estimates by the National Association of Licensed Paralegals (NALP) show just how much non-solicitors already contribute. NALP estimates that there are more than 200,000 ‘unadmitted’ staff who carry out direct fee-earning work, with the majority being paralegals.
O’Connell predicts that within the next decade ‘most of the work in law firms will be done by paralegals with varying degrees of solicitors’ oversight’. He uses an analogy from the medical profession to describe this trend: ‘Doctor surgeries realised that an awful lot of work could be done by nurses and it could be done cheaper.’
Paralegals are also good news for law firms because they are generally less mobile than solicitors, who can be expensive and difficult to retain, especially given fewer opportunities for promotion due to current financial constraints. ‘Ever fewer solicitors are being made partners and that is not a good commercial model for a firm. Paralegals have different career aspirations. They don’t expect to be made partners,’ points out O’Connell. There are no qualifications required to be a ‘paralegal’, which is a generic term describing fee-earners or part fee-earners among non-solicitors (excluding chartered legal executive lawyers), according to NALP. Unlike solicitors and chartered legal executives, paralegals are unregulated.
However, a growing number of paralegals today are law graduates. NALP chief executive Amanda Hamilton says: ‘For most solicitors’ firms the term paralegal has [come to describe] a law graduate who cannot find a training contract or cannot afford to do the Legal Practice Course (LPC), so they are regarded as a cheap workforce because they are there.’
But, she adds: ‘In our view, paralegals are much more than that. Most of our members who have been working in law firms for 25 or 30 years have not necessarily got a law degree, but have learned on the job and become specialists in their own right.’ NALP’s members are ‘licensed’ paralegals; that is, they meet a set of criteria including: relevant legal qualifications such as NALP’s Level 4 Diploma in Paralegal Studies; a necessary period of qualifying experience, including at least 50% of employed time as a fee-earner with direct responsibility for their own clients and/or workload and minimum supervision; and continuing professional development (CPD).
Hamilton says that some of the association’s members run law departments within large law firms: ‘They are very well thought of and some of them are even going to be partners,’ she says. Paralegals can be partners in firms that are designated as legal disciplinary practices (LDPs) – where up to 25% of partners can be non-lawyers – and are also eligible to become judges of First Tier Tribunals.
Paralegals who work in the legal departments of companies – especially in international organisations – tend to be better paid and more highly regarded than in law firms. Hamilton and her counterpart O’Connell at the IOP believe it is a question of when, not if, paralegals become regulated just as solicitors are regulated by the Solicitors Regulation Authority and chartered legal executives by ILEX Professional Standards (IPS). They believe this would be a positive development.
O’Connell says: ‘The trouble with paralegals is that they are an unknown quantity. At the moment you have two fee-earners, a solicitor and a paralegal, sitting side by side doing exactly the same work. One has completed an LLB, LPC, training contract and is heavily regulated and the person sitting next to him has none of those things and is not regulated effectively. All that makes a mockery of customer protection, which is meant to be at the root of regulation.’
Hamilton notes that a significant step towards ‘the slow but sure recognition of paralegals’ is the government-funded paralegal national apprenticeship scheme expected to start in July 2013. The scheme, developed by the employer-backed Skills for Justice charity, will provide national occupational standards which define competencies required for paralegal roles. Under the scheme, the government’s National Apprenticeship Service will pay employers for training apprentices and delivering the mandatory components of the framework. Up to 100% of funding is available for the training of school leavers (16-18 years old) and up to 50% for 19-24 year olds, with smaller contributions potentially available for older apprentices.
Legal secretaries’ roles are changing rapidly, either because of the outsourcing of the most basic functions such as typing, or by the up-skilling of secretarial staff to roles such as personal assistant (PA). O’Connell, whose IOP also includes legal secretary members, says: ‘There are fewer legal secretaries and their role is changing dramatically.’ He notes that while the younger generation of fee-earners do their own typing, technology means that it is cheaper to outsource basic copy-typing to far-flung places such as South Africa than employ a full-time secretary to do it.
Seamus Ryan, a former litigator who teaches on the Legal Secretaries Diploma course at the Institute of Legal Secretaries and PAs (ILSPA), concurs. He says that many legal secretaries either end up being promoted to legal PA or office manager, or doing fee-earning work typically by training as paralegals, although some also follow the legal executive route. Ryan says that some former students went on to qualify as solicitors.
The quality of student intake has gone up ‘considerably’, partly due to the increasing difficulties of finding a training contract, notes Ryan. ‘On the diploma course, I have had classes where almost a quarter of students are law graduates; I have also had people who have done the LPC,’ he says. ‘I always make sure that my students know very well that, yes, they have got great typing speed but the old days of "I dictate the letter and you type it", forget it.’
Among non-solicitors, chartered legal executives sit at the very top of the pyramid. They are a profession in their own right and are represented by the Chartered Institute of Legal Executives or CILEx (formerly the Institute of Legal Executives or ILEX) just as the Law Society and the Bar Council represent solicitors and barristers respectively. However, legal executives are also frustrated by the glass ceiling in some law firms. They see themselves as fee-earners who can do much of the same work as solicitors. They can train to become court advocates and are eligible for judicial appointments.
Diane Burleigh, chief executive of CILEx, explains: ‘The only thing that holds them back is reserved activities, which some firms take a view on in terms of management and heading departments in particular, but other firms don’t.’ In some firms, legal executives do have supervisory or management roles, including leading teams, she says, adding: ‘We have members who are the highest fee-earners in their firms. We also have members who grumble that they are paid considerably less than a solicitor with equivalent experience.’
Burleigh explains that legal executives do not have reserved or independent rights to conduct litigation, and provide probate and conveyancing services without the supervision of a solicitor, and this limits their opportunities for career development, as well as barring them from becoming a partner in traditional law firms. Under the LSA, legal executives can become owners in LDPs. There are already 200 chartered legal executive lawyer partners in LDPs. In future, even without reserved rights, they can be made partners in ABSs, or set up their own ABS practice. And that has an additional financial advantage for firms, Burleigh argues: ‘I have had several law firms say to me we used to pay for our legal executives to qualify as solicitors so that they could be a partner, but we don’t have to do that anymore.’
Another difference between a solicitor and a chartered legal executive that CILEx seeks to highlight is that the latter is a qualified lawyer specialising in a particular area of law, obtained through prescribed CILEx qualifications and a minimum of five-years’ relevant on-the-job experience. Solicitors, in contrast, have a broader, more general legal training. That is where some legal executives claim a competitive advantage over solicitors in the changing market. Co-operative Legal Services (CLS), the business arm of the Co-operative Group and one of the first companies to be granted an ABS licence, recently announced that it will, over the next five years, recruit over 3,000 staff, of whom 90% will have a legal function. A high proportion of these fee-earners, it is expected, will be legal executives and paralegals.
CLS’s approach is to recruit into specialist roles to provide legal services in areas such as family law, conveyancing and personal injury, and that is a perfect fit for CILEx members, argues Burleigh. ‘On qualification, our members are a specialist family lawyer or a specialist conveyancer or a specialist PI lawyer. ‘We believe that the standing and prominence of legal executives will be enhanced with ABSs, because the owners of the businesses and the managers running them are not going to be hidebound to the traditional outlooks.’
Attitudes to motivating and rewarding paralegals, legal secretaries and other non-lawyer professionals are also changing. Commercial firm Irwin Mitchell now offers structured professional training to its non-legal staff in addition to partners and associates Last year, the firm launched IMU Law and Business School, which provides specially tailored training courses to employees, including non-graduates. Bespoke paralegal training includes the ‘IM Certificate in Legal Practice’ which has been devised in partnership with ILEX Tutorial College (ITC) and CILEx.
Students graduate with an externally recognised CILEx Level 3 Professional Diploma in Law and Practice – the first stage of chartered legal executive training – and can progress further in their studies at the IMU Law and Business School up to an LLM in Legal Management. This incorporates modules from The College of Law’s LLM programme as well as Irwin Mitchell’s management development programmes.
Anna Mitchell, head of HR for personal injury, points to David Urpeth, national head of workplace injuries and illness. He started at Irwin Mitchell as a non-graduate paralegal and qualified as a solicitor eight years after joining the firm. Urpeth is now a ‘member’, a term adopted by Irwin Mitchell for equity partners since the firm moved to a corporate structure in May 2011. That is a major commitment, but Catherine Kenwright, Irwin Mitchell’s head of knowledge and learning services, says it is worth it: ‘It’s a cradle-to-grave approach where basically people come in as unqualified practitioners and work their way through the business, going through the various levels of IMU Law and Business School, potentially becoming a partner or an associate director as a result.’
TLT offers the associate-level position to staff who are not legally qualified but have performed to a level that is equivalent to that of an associate. For example, a TLT manager who oversees the mortgage lender sales team was promoted to associate level in recognition of her contribution to the firm’s business. Some law firms have been making big changes to the career paths of legal secretaries. In the personal injury department of Irwin Mitchell, secretarial and administrative roles have been eliminated and affected staff were ‘intensively trained’ to take on litigation assistant roles, which include fee-earning work. Further training to boost their skills is planned.
City law firms encourage other non fee-earner roles, such as professional support lawyers (PSLs) with a specific career path. At Allen & Overy, for example, PSLs progress to senior PSL and counsel, and in other firms PSLs have been made partners. Firms are also looking at ways of financially incentivising all staff. For example, bonuses are available to all employees at Pannone, including those with no legal functions.
At Irwin Mitchell, in addition to being eligible for the firm’s discretionary bonus scheme, employees are recognised and rewarded for exceptional contribution to the business through the Irwin Mitchell Employee Recognition Scheme. Similar schemes are in place at TLT, whose Exceed! programme online recognition system rewards employees for going ‘the extra mile’. One employee literally did that, driving across the country over the weekend to ensure an important delivery was made safely and on time.
Increasingly, commercial firms are taking on people with no legal expertise or experience to fill important management roles in areas such as HR, finance, business development and knowledge management. As part of a changing structure at the top, Pannone has recently introduced a new position of business services director for senior people in different business services teams, such as digital marketing and IT projects.
Since Holt’s appointment as managing partner at the firm, she has established a management board with executive decision-making powers. Two non-lawyers – Pannone’s finance director and the director of business development – have recently been appointed to it.
At TLT, qualified business management professionals with expertise in business development, facilities, finance, HR, IT, knowledge management and risk make up the majority of members of the firm’s management board. ‘They are involved in discussions around firm strategy. In that way, there is a fair degree of recognition and there is as careful attention paid to the career paths and personal development of our support managers as anybody else in the firm,’ says Bourns.
The ‘recognition upgrade’ of staff who are not legally qualified might be beneficial for the sector overall; but it could come at the price of downgrading the career prospects of the ‘admitted’. Bourns says bluntly: ‘Some of the biggest losers in what is happening in the profession will be the solicitors. There will be fewer solicitors and more non fee-earners as partners. You might be able to support a very large population of owners. They may be some of the existing partners and may receive some sort of reward by virtue of their ownership, as they do in other businesses.
'But they won’t necessarily receive an income at the [present] level. It is not sustainable,’ he concludes.
Irwin Mitchell converted to LDP status in May 2010 and last year adopted a new corporate structure ahead of its recent conversion to ABS and the injection of external funding. To date, it has promoted five non-lawyers to (equity-status) ‘members’ of the firm, including the firm’s director of business development and communications, the group finance director and the HR director.
‘Getting to the top of the tree will on the whole not be about your technical capabilities, it will be about your commercial capabilities,’ adds Wheatley Burt. So if, for example, a legal executive is extremely good at winning business, and shows strong commercial nous or leadership qualities, he or she can rise to the top. Wheatley Burt adds: ‘There will be no bounds.’ The opening up of ownership to non-lawyers could potentially extend to all staff.
Wheatley Burt says that some law firms are considering adopting the John Lewis ‘mutual’ model, where all staff are also owners and share in the profits of the company. That, she concludes, is a very visible way of demonstrating the value of all people in the business.
Marialuisa Taddia is a freelance journalist
The Law Society’s Law Management Section is running the LMS HR Forum 2012 conference on 7 November 2012, at the Law Society, London (4.75 CPD hours). The event will offer a focused mix of strategic insight and practical solutions on current HR and staffing issues, specific to law firms. Spaces are limited. Book your place at the Society site.