Any input gratefully received - please!

[janey84]

Good afternoon,

I'll try to keep this as brief as possible! Posted on main legal forum, but no response after a couple of days, so thought this may be a better section to post in!

Ok, so here goes!

I've got an idea in my head to set up as a freelance/temp, offering my services to local estate agents and conveyancing depts of solicitors (this is where my experience lies pre-babies!) whereby they could call me in, on a feelance basis, to help chase up files, do the mundane (but necessary) tasks required to help push files through for exchange/completion

I think my little lightbulb moment may be somewhat flawed with a conflict of interest issue? (i.e I could in theory end up working on the same transaction, but from either side of it, where I would be in different offices locally) Would the fact that I'd be temping/freelancing, and so not an employee of the company make this ok? Or is this an un-jumpable hurdle that there would just be no getting over? I like the idea of being a freelance temp, as would be a nice little selling point for me, in that companies won't be paying any agency fees...

Also, re insurances, would I need to look into professional indemnity insurance, or would a firms own insurance cover me while I am working with them?

I would invoice by the hour to the company - I'm not VAT registered at the moment (I'm currently self-employed running an online clothes shop, which doesn't take nearly enough to make VAT registration a requirement!) - when invoicing firms, would I then add VAT to an invoice, or is that something you only do if you're VAT registered yourself?

So many questions! So sorry to bombard you all, but this little seedling of an idea is something I would really like to take further, but can't seem to find any definitive answers on the conflict of interest/freelance issue! The other questions are obviously moot if it's a total non-starter idea anyway!

Thanks for taking the time to read this

 

[Robert Pearce]

I would invoice by the hour to the company - I'm not VAT registered at the moment (I'm currently self-employed running an online clothes shop, which doesn't take nearly enough to make VAT registration a requirement!) - when invoicing firms, would I then add VAT to an invoice, or is that something you only do if you're VAT registered yourself?

I can answer the VAT question - you would only charge VAT if you were VAT registered. If you ran both the online clothes shop and the freelance business as a sole trader, then you would need to look at their combined sales when assessing whether you had breached the VAT registration threshold.

 

[janey84]

Thanks so much for you reply! That's one question ticked off!

 

[JohnBltd]

I think my little lightbulb moment may be somewhat flawed with a conflict of interest issue? (i.e I could in theory end up working on the same transaction, but from either side of it, where I would be in different offices locally) Would the fact that I'd be temping/freelancing, and so not an employee of the company make this ok? Or is this an un-jumpable hurdle that there would just be no getting over? I like the idea of being a freelance temp, as would be a nice little selling point for me, in that companies won't be paying any agency fees...

Also, re insurances, would I need to look into professional indemnity insurance, or would a firms own insurance cover me while I am working with them?

I can't give a definitive answer but I would suggest considering the following;

Subcontracting

Subcontracting for non-reserved work is certainly possible to my knowledge and I have dealt with people claiming to be working in a similar capacity.

Subcontracting for reserved work would depend on whether the solicitor in charge of the case could be considered to be "managing" you as subcontractor.

I suspect that you would not be considered managed for the purposes of reserved work, though you would need to look at your proposed activities against the reserved activities to see if this is going to impact on you at all.

Schedules 2 & 3 of the Legal Services Act 2007 might make boring but necessary reading as part of developing your plan.

Schedule 2 sets out what they considered "reserved" while Schedule 3 sets out who can be exempted from the restrictions on carrying out that work.

[www].legislation.gov.uk/ukpga/2007/29/schedule/2

[www].legislation.gov.uk/ukpga/2007/29/schedule/3

(I can't post links so you'll need to remove the square brackets around the www part and then copy and paste into your browser window)

You might also want to check out the SRA Handbook (free online at the SRA website. Even if they don't apply to you directly, these are the rules that your clients will need to be following so you might want to be familiar with them.

In relation to the current matter, I would specifically direct you to Rule 8 of the Practice Framework Rules, including the guidance notes.

[www].sra.org.uk/solicitors/handbook/practising/part3/rule8/content.page​

Conflict of Interest

The person hiring you would still need you to comply with all regulations on their behalf, including conflict of interest. I would suggest that it would be easy to articulate a policy to avoid conflicts of interest. I would further suggest that a client might have concerns if you are not able to show them how you plan to avoid conflicts.
​

Insurance coverage by client

This is rather unclear to me I'm afraid. There is scope for people to be covered when they are working under the control of one of the firm's solicitors (which is why so many legal departments have an army of paralegals with only one or two solicitors), but in that instance they are employees of the firm anyway. As mentioned above, I do not know if this extends to subcontractor relationships.

It may be something that needs to be negotiated on a client-by-client basis. Some clients may not wish to contract with you if you do not have coverage and they cannot or will not extend it to you, as they would not be able to recover from you in anything went wrong.
​

Personally obtaining PII.

Depending on your level of professional qualification and experience, you may find it very hard to get PII (or affordable PII) for provision of legal services. It also depends on the areas. PII for conveyancing, if memory serves, is insanely expensive compared to other areas, because conveyancing errors have the potential for causing protracted high-value disputes.

I am assuming at this point that you are paralegal. Without wanting to delve into the matter surrounding SRA regulation, your firm may not be required to obtain PII, so a lack of it will not necessarily prevent you from continuing.

Not having insurance coverage (either directly or by extension from a client) is a scary thought, though!
​

It might be worth contacting the SRA for a chat. They don't like giving firm answers to anything, but they might be able to confirm whether (i) your firm will need to be SRA regulated and (ii) whether a subcontractor acting under the control of a solicitor at the client firm is considered to be "managed" for the purposes of reserved work.

If you have any contact with some of your proposed clients, it might also be worth floating the idea past them (and specifically their COLP) to see if they have any concerns.

I appreciate this probably doesn't give you the simple answers you were after, but I hope it puts the matter in better context for you. It certainly provides some useful reading for a rainy weekend!

 

[janey84]

JohnBltd - firstly, may I extend huge thanks for your lengthy and thorough reply!

You've confirmed my suspicions in that it's going to be quite complicated to find any definitive answers easily on the subject! I shall certainly do some of that reading over this weekend - I don't know about rain, but it will at least get me out of doing the housework

I'm currently awaiting a call back from my last employer (it was following a discussion with them that planted the seedlings in my head - it may well be that they offer me work on the hours I would like on PAYE, which would make the whole idea a no-go anyway, as I'm certain they won't have me working for others at the same time - they may even be funny about me continuing my current business) If nothing else, my old boss is a very approachable chap, so fingers crossed he'll give me a little guidance too!

Your assumption is correct in that I was working in a paralegal capacity previously.

If I do look seriously into doing this, then I think it may have to be strictly on the basis that no 'legal' work is undertaken, so perhaps solely approaching local estate agents with my idea may be the way forward - there would be a lot less risk attached in insurance terms (although the work would be a lot more boring!), but I could still provide a useful service in a progressing capacity, in that I would be THAT annoying swine who asks all the irritating in the know type questions when chasing things up

I think my initial conflict of interest issues would still be of relevance, but hopefully the reading ahead of me will make things a little clearer! I'm wondering if a NDA to any clients would be the way forward. My thinking is that surely temps taken on via employment agencies also potentially find themselves in a position where they have been involved with both sides of the same transaction in some form?

Anyway - I'm rambling. Again. Apologies!

Thanks once again for your reply, which has been really useful!

Have a wonderful weekend