Thursday, July 14, 2011

Ethical Screens & Paralegals: More (and More Detailed) Guidelines from Texas Supreme Court

We first wrote about In re Guaranty Insurance Services, Inc., last June. Recall, in this case a firm was disqualified after the discovery that it employed a paralegal who had worked on the opposite side of the matter at his previous job. The Texas Court of Appeals held that a blanket policy that individuals should avoid working on matters they have worked in at previous employers, was insufficient as an ethical screen.

Now comes an update from the Supreme Court of Texas overturning that decision. It notes:
  • "Our conflict-of-interest jurisprudence recognizes distinctions between lawyers and nonlawyers, their duties, and their likelihood of contact with confidential information… But the rule is different for nonlawyers…"
  • "The presumption of shared confidences is rebuttable if the nonlawyer has actually performed work on the matter at a lawyer's directive and the lawyer reasonably should not know about the conflict of interest. Put differently, if the nonlawyer has actually worked on the matter, the presumption of shared confidences is not rebuttable unless the assigning lawyer should not have known of the conflict."
After presenting its (quite) extensive analysis, the court directed the trial court to vacate its disqualification ruling.

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