Paralegals Fear the Long Arm of Lawyers : The Law: A recent conviction for unauthorized practice of law underscores the tension growing in the legal marketplace.

There’s a law on the books in California that prohibits the “unauthorized practice of law.” Vague and ill-defined, it is little-known and rarely enforced.

Mershan Shaddy, a San Diego paralegal, learned recently that the law is still very much enforceable. Found guilty in a criminal case of practicing law without a license, he currently is appealing the conviction and the sentence he’s facing for the offense--49 days in jail.

Shaddy’s case apparently marked the first time a paralegal has been found guilty in a California criminal case of the unauthorized practice of law.

It has made paralegals around the state fearful of additional prosecutions and resulted in a ban on some paralegal advertising in San Diego’s Copley Press.

The case also has served to underscore the tension growing in the legal marketplace between California’s 122,300 attorneys, who enjoy a monopoly on the practice of law, and paralegals, who see a burgeoning market for routine services lawyers can’t, or don’t want to, provide economically.

“Although the prosecution said this case was not brought about by lawyers against paralegals, to me it’s relatively clear that they were just waiting (for me),” Shaddy said. “Because what is happening with paralegals, in the industry itself, is naturally going to infringe on a lot of people’s income.”

The paralegal business is projected to be the fastest-growing occupation in the United States over the next 10 years, according to the U.S. Department of Labor’s Bureau of Labor Statistics.

In 1988, there were 83,000 paralegals nationwide. By the year 2000, planners expect there will be 145,000, a jump of 75%, according to Jon Lukasiewicz, a bureau economist in Washington, D.C.

Estimates of the number of California paralegals are not readily available, but there already are enough that there is a “California Paralegal” magazine. A recent issue featured stories on such topics as “The Essentials of Nondues Income” and “A Paralegal in China.”

Essentially, there are three kinds of paralegals.

The most widely known group is made up of paralegals who are the salaried employees of an attorney or law firm. This group most commonly performs the paralegal’s traditional duties: legal research, witness investigations, obtaining and reviewing documents, checking citations in briefs and organizing cases for trial.

A second group performs the same duties but as independent contractors to law firms and attorneys. There’s so much work for these paralegals that Teri L. Dellinger of Carlsbad, who runs Juriserv & Associates, said she is finalizing plans to franchise her business.

The third category is made up of self-described “independent paralegals.” These paralegals assist their own customers--not a lawyer’s clients--in filling out forms for legal matters such as bankruptcies, uncontested divorces, wills, adoptions, Social Security claims, real estate closings and contract negotiations.

If a problem truly requires legal advice, these paralegals claim they refer the customer to an attorney. But if a matter does not require particularized advice, independent paralegals say they can do the job--and for much less than lawyers.

For instance, an uncontested divorce can often run $1,500 to $2,000 if a lawyer is involved, said Myra A. Norman, a Sacramento paralegal and member of a special State Bar of California committee currently investigating the licensing of non-lawyer “legal technicians.”

But it usually costs only $150 or $200 to have a paralegal type out the forms and file them at the courthouse, Van Norman said.

“We want to get the law out there so people can deal with it themselves,” said Catherine Jermany, president of the National Association for Independent Paralegals in Sonoma.

“We want people to be able to deal with the law themselves. That is dangerous for some persons.”

That danger--to lawyers, the implication goes--prompted the San Diego city attorney’s office to prosecute Shaddy, independent paralegals charge.

Shaddy, supporters contend, was a victim of selective prosecution and overly aggressive tactics, especially the use of an undercover agent--the San Diego city attorney’s office used an investigator to secretly record a meeting she had with Shaddy.

Prosecutors William R. Newsome and Michael Rivo, who handled the case, deny those charges and said they pursued the case solely as a matter of public protection.

Shaddy, 42, has been a paralegal since 1985. A Vietnam veteran who had lived in San Diego since 1973, he got into the business in 1985 after several sales jobs.

No particular training or licensing is currently required to pronounce one’s self a paralegal. Shaddy, however, said he took “several courses” in 1986 to familiarize himself with various legal forms.

“I let people know right away I was not an attorney,” said Shaddy, who specialized in forms for bankruptcy and family law cases. “I gave them an administrative journey . . . (but for) details specific to their case, they had to obtain those from an attorney.”

Shaddy was charged with practicing law after a November, 1988, trip by the undercover agent to his business, called California Legal Administration, in San Diego’s Grantville neighborhood. The investigator was sent to see Shaddy after the city attorney’s office received two complaints about him from unsatisfied customers, Rivo said.

The investigator, who secretly was taping the entire conversation, asked Shaddy about divorce and bankruptcy services. The prosecutors said she taped him giving her legal advice.

Though paralegals can perform many of the tasks traditionally left to lawyers, they may not advise clients or hold themselves out as an expert in legal areas, said Sue Sullivan, director of the University of San Diego’s Lawyer’s Assistant Program.

The gray area, the source of the tension between lawyers and paralegals, is what constitutes “legal advice.” There is no definition and in a recent case, even a state appellate court in San Diego recognized the futility of trying to come up with one.

“Any definition of legal practice is, given the complexity and variability of the subject, incapable of universal application and can provide only a general guide to whether a particular act or activity is the practice of law,” the 4th District Court of Appeal said in a civil case involving an Orange County eviction service.

Similarly, there is no definition for the “unauthorized practice of law.” Paralegals charge that both terms are kept deliberately vague so that lawyers--and judges, who after all are ex-lawyers--can mold the law to fit a particular case.

Last October, Shaddy went to trial in San Diego Municipal Court. Convicted by a jury after a three-day trial where the tape was the main piece of evidence against him, court records show that Judge Robert Coates sentenced him in November to the 49 days in jail.

Coates suspended the sentence pending Shaddy’s appeal and Shaddy remains free on his own recognizance. The initial appeal papers are due this week in San Diego Superior Court.

Steven Elias, a lawyer and editor for Nolo Press in Berkeley, which publishes books on self-help in legal matters and serves as an informal clearinghouse on the topic, was Shaddy’s expert witness at the trial.

The undercover recording was “real cops and robbers,” Elias said in a recent interview. “For this?”

“The transcript (of the tape) when read as a whole, it appeared as though Mershan was trying to put (the investigator) at ease but, in fact, it came off as trying to impress her with his expertise,” Elias said.

The 31-page transcript quotes Shaddy, among other items, as figuring “spousal support,” down to precise numbers, and discussing an “interest in (the purported husband’s) retirement.”

“The sin lawyers would like to prosecute--and you’ve got to remember that judges are lawyers--is looking like a lawyer, acting like a lawyer, being an expert,” Elias said.

The decision by the state appellate court in San Diego, issued Nov. 28, after Shaddy was convicted, makes that clear. In the civil case involving the Orange County eviction service, the three-judge panel unanimously affirmed a ruling that the service practiced law because “in short, (it) cast about itself an aura of expertise concerning evictions.”

Rivo said Shaddy was investigated because of the two complaints the office had received, which prompted prosecutors to wonder “whether Mr. Shaddy was actually practicing law with doing what he was doing.” Both he and Newsome said they didn’t consider either the undercover visit by the investigator or the secret taping to be exceptional.

“It’s one of the most typical (investigative techniques), in fact, in the consumer protection context,” Newsome said.

Both prosecutors also said the case had nothing to do with the protection of lawyers’ turf.

“I feel no particular devotion or loyalty to the State Bar of California,” Newsome said. “I’m not putting them down or anything, but my responsibility as a prosecutor is to prosecute violations of state law and that doesn’t necessarily jibe with my being an attorney member of the State Bar.”

The State Bar played no role in referring Shaddy’s case to the city attorney’s office, or in prosecuting him, since it stopped investigating complaints of unauthorized practice in 1985, spokesman Tod Martin said. Nevertheless, Shaddy, his defense attorneys and other paralegals suspect that Shaddy was prosecuted with the Bar in mind.

That’s because Shaddy’s case has been playing itself out while the Bar has been publicly wrestling these past two years with what to do about paralegals.

In 1988, a special Bar committee, charged with exploring the scope of the laws against unauthorized practice of law, surprised the agency by recommending it urge the repeal of the laws. This past summer, the bar’s Board of Governors rejected that recommendation and instead appointed another special committee.

That panel is charged with deciding whether the idea of licensing non-lawyer “legal technicians” is worth pursuing. The committee is due to make its recommendations by July 1, said chairwoman Robin Paige Donoghue of San Francisco.

Shaddy supporters said they suspect he was prosecuted so that the commission will be able to point to him as an example of the dangers of paralegal licensing.

“I believe the Bar already has come to the inescapable conclusion they cannot allow the door to open any wider,” said Jermany, head of the national independent paralegal group. “I think they’ve decided they can’t abandon the unauthorized practice (laws).”

Donoghue and other panel members, including San Diego Municipal Court Judge Melinda J. Lasater, said Shaddy’s case had not been formally presented to the panel as evidence of anything. In addition, panel members stressed that they had not reached any conclusions about paralegal licensing.

While the commission studies the issue, Shaddy’s case already has caused the other independent paralegals around the state to become “wary and paranoid and frightened,” said Sacramento paralegal Van Norman, who also is one of the members of the Bar panel.

“The case sets a precedent which is really frightening,” she said. The number of independents, estimated at about two dozen in San Diego and 500 to 1,500 in the state, is hard to pin down, partly because “a lot are working quietly and undercover right now for exactly this reason--they don’t want to get sued.”

The case has also led to a more concrete consequence. Independent paralegals can no longer advertise in the Copley Press, which publishes the San Diego Union and the San Diego Tribune.

Independents used to be free to place ads in the “personals” section of the two papers, which share classifieds.

The ads were worth about $50,000 annually to the papers, said Walter Moore, classified advertising manager for the papers. And though a usual day saw them stuck among announcements for dating services, chapel weddings and thanks to St. Jude, the ads typically brought in “75% to 80% of the business,” said Tom Kavanaugh, director of San Diego Paralegal.

Shaddy had advertised regularly in the Union since 1987, he said.

After Shaddy was convicted last fall, however, the city attorney’s office sent the Copley papers a four-page letter urging it to “put a stop to this unnecessary and highly irregular practice.”

Non-lawyer advertising of legal services is “criminal conduct,” because paralegals don’t have a law license, Newsome contended in the letter. He added that a newspaper did not have a First Amendment right to publish ads for illegal commercial activity, and that doing so opens it up for “substantial liability.”

The Copley papers reluctantly agreed, general counsel Hal Fuson said. Moore sent out letters saying that as of Dec. 1, all legal services advertising had to be submitted by lawyers and would run in the “attorneys” classification.

The Times runs such ads under categories labeled “divorce services” and “legal services,” but requires “special care” to make sure the ads are accurate, in good taste and satisfy the law, said Larry Kline, the paper’s classified advertising director in Los Angeles.