Thursday, June 10, 2010

News and Opinions on Conflicts and Ethical Screening for Law Firm Paralegals

The Texas Court of Appeals published an interesting decision regarding the extent to firms must actively enforce ethical screens in the case of paralegals with conflicts based on clients and matters they've worked on at prior employers.

As background, industry expert Bill Frievogel notes at FreivogelOnConflicts.com that: "...most state courts and ethics committees that have considered this issue as to non-lawyers have given non-lawyers more slack and have approved screening." And, in keeping with this logic, Frievogel notes that while Texas does not allow unilateral screening of conflicted lawyers absent client consent, case law does support such screening for paralegals.

In this particular Texas case, a paralegal who had worked on one side of a matter joind the firm representing the adverse party. Facing a disqualification motion by the original employer, the second firm argued that its blanket instruction to all incoming paralegals to avoid work on matters they were exposed to prior to joining the firm was a sufficient screening measure.

The court held that such a blanket policy was insufficient as an "effective" screening measure. It highlighted this fact by noting that the paralegal in question actually worked on the same matter at the new firm. That alone was sufficient to rebut the presumption that the paralegal shared confidential information with the new firm, regardless of whether such sharing occured. (For details, see: In re Guaranty Insurance Services Inc., Tex. App. 3d Dist., No. 03-09-00640-CV, 4/16/10)

As with lawyer screening, paralegal screening rules vary by state. In 1988, the ABA endorsed unilateral paralegal screening in Informal Opinion 88-1521. More recently, the ABA commentary on the newly-revised Model Rule 1.10 argues that imputed disqualification should not apply to paralegals and other non-lawyer personnel. (See Comment 4. See also National Federation of Paralegal Associations Opinion 95-3.)

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