87-F-110 - Vacated*

 

*Vacated by the Board of Professional Responsibility on September 11, 2015 due to changes in the laws or rules.

FORMAL ETHICS OPINION 87-F-110


Inquiry is made concerning the propriety of representing litigants upon employment of a paralegal who had duties involving opposing parties while formerly employed by adverse counsel.

The paralegal, while employed by the former lawyer, engaged in activities relating to each client including taking statements from clients and witnesses, reviewing statements of clients and witnesses, reviewing memoranda, reviewing medical records, daily reviewing, monitoring and updating files and other duties generally performed by paralegals.

While employed by the present lawyer the paralegal has been, and will be, screened and isolated from all the files and activities relating to the cases wherein the former lawyer-employer is adverse counsel. The present lawyer-employer has not permitted, and will not permit, the paralegal to disclose any confidences and secrets obtained in the former employment.

There are approximately six legal matters presently pending involving personal injury and worker's compensation claims in which the paralegal performed duties on behalf of the former employer wherein the former employer and present employer of the paralegal are representing the opposing parties. The former employer-lawyer has advised his clients that the paralegal in question is now employed by the lawyer representing their adversary, but did not explain that there was an effort to screen and isolate the paralegal from activities relating to the case. The parties represented by the former employer-lawyer have expressed concern and a feeling of being placed at a disadvantage as a result of the paralegal now working for the lawyer of the opposing party.

The question to be resolved is whether screening and isolation methods and procedures are viable and permissible means of avoiding the ethical disqualification of an attorney upon employment of a paralegal who had duties involving pending cases while formerly employed by adverse counsel.

The Board previously addressed the same general issue in Formal Ethics Opinion 81-F-5 in a matter involving a lawyer changing law firms. The opinion citing ABA Formal Opinion 134 (1935), City of Cleveland vs. Cleveland Electric Illuminating Company, 440 F.Supp. 193, N.C. Ohio (1977); Aff'd 573 F.2d 1310 (CA 6, 1977); General Electric Co. v. Valeron Corp., 608 F.2d 265 (CA 6, 1979); Novo Terapeutisk v. Baxter Travenol, 607 F.2d 186 (CA 7, 1979); and Trone v. Smith, 621 F.2d 994 (CA 9, 1980) stated;

Even though the attorney did not participate, with his new firm, in any of the cases which he had previously been handling on the other side, the potentiality of his revealing confidential information to his new partners, and the justifiable apprehension of his former clients that he might do so, would be sufficient to disqualify the new firm.

In the recent case of Smith v. Whatcott, 757 F.2d 1098 (CA 10, 1985) the Court found that a lawyer's move from one firm to another dooms his new firm's chance to represent one of the lawyer's old opponents, despite the fact that the lawyer has been totally uninvolved in the case in his new firm. The Court stated,

Disqualification is required if a substantial relationship exists between the pending suit and the matter in which the challenged attorney previously represented the client. Substantiality is present if the factual contexts of the two representations are similar or related....

Once a substantial relationship is found, a presumption arises that a client has indeed revealed facts to the attorney that require his disqualification. This presumption is irrebuttable....

The conclusion that the two matters are substantially related gives rise to a second presumption that the attorney shared information with his partners, thereby requiring the disqualification of the entire firm. A limited exception has been recognized where the firm can prove that the attorney involved ... has been effectively screened ...  The sufficiency of screening procedures must be evaluated case-bycase.

... The firm must have in place specific institutional mechanisms to block the flow of confidential information.

This Court need not decide whether to adopt this exception; no specific institutional mechanisms designed to prevent inadvertent disclosure were in place when the firm accepted the case.

The screening exception is disapproved as a method of preventing vicarious disqualification wherein there is a potential for harm. In this instance a potential harm exists. In the absence of the informed consent of all the parties the lawyer is ethically prohibited from representing litigants upon employment of a paralegal in instances wherein the paralegal had duties involving opposing parties while formerly employed by adverse counsel.

This 10th , day of June, 1987.

ETHICS COMMITTEE:

W. J. Flippin
Henry H. Hancock
Edwin C. Townsend

APPROVED AND ADOPTED BY THE BOARD