Monday, October 24, 2011

Paralegal Ethics: How to Build an Ethical Wall

ABA Model Rules 1.7 through 1.10 prohibit attorneys from representing clients with adverse interests. The adverse position creates a conflict of interest.
Conflict situations apply paralegals and to all other nonlawyers employees as well as attorneys so you need to be aware of conflict rules.

These rules are especially important when you change jobs, moving from one law firm to another.
Consider this fictional situation:
Jessica, a paralegal in Anytown, USA who has worked as a paralegal at Mega Lawyers for 5 years. She has decided to apply for a job at The Faraday Firm, also located in Anytown. 
Mega Lawyers represents PeeWee Cosmetics in litigation against the Goliath Corporation, a client of The Faraday Firm. 
Jessica worked on this case at Mega Lawyers. If she is hired by The Faraday Firm, she has a conflict of interest. If she is not screened from the case there, Mega Lawyers may object and move to have The Faraday Firm disqualified.
The Faraday Firm has choices:
(1) decline to hire Jessica;
(2) request Mega Lawyer’s consent to Jessica's hiring and screen her from all contact with the case; or
(3) hire Jessica without Mega Lawyer’s consent but set up a screen if that’s permitted in Anytown’s jurisdiction.
Jessica really wants to leave Mega Lawyers. The Faraday Firm wants to hire her. Screening Jessica from the PeeWee Cosmetics v Goliath Corporation is the most effective choice. 
A “screen” refers to actions taken by the firm to keep the employee with the conflict from any contact with the case or communicating about the case with anyone else in the firm.  The screen is most commonly called an ethical wall or a cone of silence.
The screen must be put in place or the firm risks disqualification.  It must effectively protect the client’s confidential information. Basically, the following are required to screen Jessica or any paralegal in this situation:
  • Give written notice regarding the conflict to everyone at The Faraday Firm that explains the conflict and that the Jessica cannot work on the case, access documents or information about the case, or talk with anyone about the case. Note: It’s best to have these policies in place before any issue arises.
  • Instruct Jessica, in writing, not to work further on this case, not to access related documents, and not to disclose any information.
  • Flag files and store them in a secure area where Jessica can’t accidentally access them.
  • Jessica must sign an agreement not to divulge any confidential information about the case and not discuss the case with anyone.
For more information regarding law firm disqualification due to the paralegal's possession of attorney-client confidences, see In Re Guaranty Insurance Services, Inc., Relator (No. 10-0364), where the Texas Supreme Court, on July 1, 2011 handed down a decision granting mandamus relief and directing the trial court to vacate its order granting the motion to disqualify. The Court’s Opinion cites many interesting cases.

Your challenge:
Investigate the rules in your jurisdiction regarding the use of a screen for employees with conflicts. Be sure your firm has policies in place to handle a screen when a conflict issue arises. Last, when you change jobs be sure to disclose all the cases you’ve worked on to your new employer...this includes that a conflicts check can be performed and a screen can be put in place to protect those cases.

In theory, Ethical Walls are far from infallible because they rely on the honor system: the information is only restricted by the discretion and meticulousness of the parties involved. For this reason, you must respect any screening that is put in place. Quite frankly, your job and the future of your firm depend on that.
© 2011 Vicki Voisin, Inc.

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