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American Bar Association

ABA Section of Business Law

Business Law Today

What paralegals can do
And the list goes on
By R. Thomas Howell Jr. and Eric G. Orlinsky
Sure, you have some business paralegals on staff. But have you really considered the universe of ways they can help you out?

Business lawyers, when asked, have dramatically divergent approaches to paralegal use. There is some evidence that lawyers may misuse or under use them, and, on the other hand, evidence that others are making far better, more cost-effective use of them.

To ascertain "best practices," to educate business lawyers about paralegals, and to improve the satisfaction and quality of life of the paralegals who work with us, the Section formed an ad hoc committee in 2004 to learn how business lawyers use paralegals and to point out better, more efficient and effective ways to use business paralegals.

Among the first items of business the committee undertook was to engage the Section membership in a comprehensive survey of a variety of issues relating to business paralegals. Respondents included many firms, large and small, urban and rural, and nearly a third of them practiced in-house. The purpose of this article is to detail the many responses to that survey.

According to the Business Law Section survey, one thing that is clear is that paralegals spend a considerable amount of their time interacting with our clients. Of the respondents surveyed, 95 percent reported that their paralegals had written or e-mail correspondence with clients at least weekly, and of those, 77 percent reported daily e-mail or written client communications. At least weekly client telephone communications were reported by 93 percent of those surveyed, and 70 percent reported at least weekly face-to-face client contact. Similarly, respondents reported that 76 percent had at least weekly contact with government agencies.

We suspect, based on these results, that in many cases, the paralegals have more frequent contact with firm clients than the lawyers for whom they work. Being able to communicate effectively, both orally and in writing, is a critical skill for a paralegal. Lawyers and paralegal managers should place significant emphasis on this skill when hiring new paralegals.

Paralegals also continue to do a significant amount of clerical-type work, with 83 percent performing "clerical" work weekly, 88 percent performing filing and administrative work weekly, and 83 percent photocopying weekly. Among the other fairly common tasks performed by business paralegals on a weekly basis were entity formation, due diligence, factual investigation, legal research and transactional document drafting. Each of these general categories will be addressed with more specificity below.

Perhaps the one item identified by the survey that paralegals were reported not to be doing was setting the fees to be charged for legal work. Fee setting is recognized in many states as such a core function of being a lawyer, that paralegals would be engaged in the unauthorized practice of law if they did it. This issue is discussed in more detail elsewhere in this issue of Business Law Today — see Frances Kao's article just before this one.

In the Section survey, we asked members to identify those substantive areas of law in which the paralegals in their firms most frequently practiced.

More respondents indicated that the paralegals in their firms practiced more frequently in litigation than in any other substantive practice area. We suspect that since most firms surveyed also have litigators (where paralegals are generally used much more frequently and effectively), most respondents forgot that we were only asking about business paralegals. Another reason may be that all paralegals in some firms are managed centrally. As a result, we have disregarded litigation as a substantive area.

Of the remaining areas surveyed, members indicated that their paralegals practiced most frequently in corporate/formations, corporate/acquisitions, real estate, intellectual property and securities. Using a recent Legal Assistant Management Association (LAMA) survey, we can then identify which specific tasks were performed most frequently by paralegals in those areas. These tasks provide fertile ground for identifying new ways in which you might be able to put your business paralegal to better use.

Corporate/formations and corporate/acquisitions. In the area of corporate law relating to both formations and acquisitions, business paralegals frequently:
  • draft, prepare and file corporate charter documents, including amendments and merger documents, as well as partnership and limited liability company certificates;
  • develop checklists for the proper formation and operation of each of the different forms of entities;
  • prepare minute books, stock certificates and stock ledgers and procure corporate seals;
  • prepare and file all documentation necessary to register or qualify an entity in one or more foreign jurisdictions;
  • prepare documentation for transfers of stock ownership;
  • draft minutes;
  • draft board resolutions;
  • draft and prepare the many documents required for shareholders' meetings; and
  • draft resolutions and other documents required to implement dividends and distributions as well as stock splits.
Business paralegals are also frequently called on to draft and prepare documents for corporate and partnership dissolutions, noncompete agreements, loan documents and UCC filings, in addition to ordering and administering UCC, lien and judgment searches on various businesses. Of course, in the acquisition or loan context, business paralegals are also often called on to assist with due diligence and to administer transaction closings.

Real estate. In real estate practices, paralegals are asked to:
  • draft deeds;
  • order title searches;
  • draft leases and lease assignments, amendments and exclusions;
  • prepare legal descriptions;
  • review plats and surveys;
  • coordinate escrow arrangements and prepare escrow instructions;
  • arrange for title insurance;
  • prepare mortgage releases;
  • calculate amortization tables;
  • prepare title abstracts; and
  • prepare, distribute and administer landlord consents and estoppel letters.
Intellectual property. In intellectual property practices, business paralegals:
  • correspond with the U.S. Patent and Trademark Office;
  • manage foreign patent and trademark applications and registrations;
  • docket IP deadlines;
  • perform trademark searches;
  • perform prior art patent searches;
  • assist with opposition and cancellation matters;
  • draft, prepare and file copyright filings and notices;
  • draft intellectual property licenses and assignments;
  • proofread technical documents; and
  • assist with IP due diligence for business transactions.
Securities. The securities areas saw some of the most sophisticated opportunities for business paralegals. Securities paralegals were frequently delegated the responsibility to:
  • manage the EDGAR filing process, including the EDGARization of documents;
  • review filings for EDGAR coding and filing requirements;
  • draft and prepare SEC Forms 3, 4, 5, 8-K, 10-Q and 10-K;
  • less frequently, aid in the drafting of prospectuses and registration statements or assist in the preparation of proxy statements;
  • obtain SEC ID numbers and CUSIP numbers;
  • assist with the printing and finalization of prospectuses and related documents at the financial printer;
  • prepare and administer securities compliance calendars;
  • draft form ADVs, Form U-4s, Form Ds; and
  • prepare and file other federal and state securities filings.
Our committee was interested in the effect of the increasing use of technology in law firms and the effect it might have on business paralegals. We asked Section members whether or not they believed that the growing use of technology was decreasing the use of paralegals. Only 11 percent of respondents thought that it was. It has been our experience that business paralegals are among the first to adapt to the use of new technologies and, as a result, are often among the best-trained staff when it comes to technology.

In many firms, the adaptability of the business paralegals in this regard actually may provide them with greater responsibility for new projects that require the use of technology. So it does, indeed, appear that the increasing use of technology, the automation of certain legal processes and the concomitant desire to leverage on that technology and to push workflow down to lower and more cost-efficient levels (not to mention the increasing commoditization of legal services) may be increasing the use of business paralegals.

The LAMA survey seems to bear this out. According to LAMA, paralegals frequently used and were facile with Microsoft Word; document management programs such as PC Docs, DocsOpen and iManage; spreadsheets such as Lotus and Excel; data bases such as Access, Paradox and dBase III; document assembly programs such as HotDocs; presentation software such as PowerPoint; Lexis/Nexis and Westlaw; Dun & Bradstreet; LiveEdgar; EDGAR; PACER; and, more generally, the Internet.

More great ideas were found in some of the anecdotal responses from some of the firms that responded to the Section's survey.

One lawyer explained how he frequently used his business department paralegal to assist him with client development and marketing. As a value-added service to his technology clients, this lawyer helped circulate their business plans to potential funding sources such as venture capital firms. The paralegal assisted with preparing a matrix of all of the venture capital firms with whom the law firm had contact, the size and stage of deal the venture capital firm was interested in and the industries in which the venture capital firm would consider investing.

Then, every time a client or prospective client of the firm was seeking capital, the paralegal matched the client with all of the venture capital firms that might be interested in investing and could send the client's business plan, along with a specifically tailored e-mail, to the law firm's contact at the venture capital firm. In this way, the lawyer could provide a true value-added service to the client or prospective client without spending too much time on implementation.

A lawyer at another firm described to us how her firm was carefully refining all of their audit responses and opinion letters into highly standardized forms and using the HotDocs document-assembly program to allow their business paralegal to assemble drafts of audit response letters and third-party opinion letters (together with back-up certificates) for transactions in ever-increasing numbers with ever-increasing speed, efficiency and accuracy.

Several other firms have established subsidiaries that act as registered agents for their incorporated clients. These registered agent operations are profit generators for their firms and are run by the business paralegals.

Great ideas for more effectively filling the plates of our business paralegals are all around us. We hope that some of these ideas, and many others in the other articles in this mini-theme issue, will help you to rethink how you or your firm uses your business paralegals. Effectively using them will lead to greater personal and professional satisfaction for you (the business lawyer) and greater professional responsibility and satisfaction for your business paralegal.

And we assure you: It can be a profitable experience!
Howell is of counsel with Seyfarth Shaw LLP in Chicago. His e-mail is rhowell@seyfarth.com. Orlinsky is a partner in the Baltimore office of Saul Ewing LLP. His e-mail is eorlinsky@saul.com.

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