Paralegal’s Memory Lapse Results in Conflict of Interest

Paralegal’s Memory Lapse Results in Conflict of Interest

Any ethics course will caution you about conflicts of interest, particularly when you are changing jobs. It seems that ethics courses should also caution you about “memory loss”.

If a paralegal has a conflict, screening the paralegal from working on the case is usually sufficient to prevent the firm’s disqualification.

What happens when a law firm’s efforts to screen a conflict fail, permitting a nonlawyer who worked on one side of a case at one firm to work on the other side of the same case at the opposing firm?
The paralegal in this story is Clyde Williams. In July 2005, Williams began work as a paralegal at a firm where he billed a total of 6.8 hours on a case. He reviewed the file to identify persons with knowledge of the relevant facts, prepared an initial draft of a response to a request for disclosures, assisted in document production and communicated with opposing counsel.
In October 2008 Williams applied for a paralegal position at another firm, identifying his previous employer and 2 potential conflicts from his previous work. A conflicts check was performed and Williams’ access to two files was restricted. He failed to mention the case he worked on in July 2005.
In 2009, Williams’ current employer asked him to organize pleadings and discovery in the case he worked on in 2005 in his previous employment. He also affixed bates labels to documents produced by the opposing party and redacted passages highlighted by an attorney. In total, Williams billed 27 hours on the case.

Williams again failed to recognize the conflict and to notify the supervising attorney of its existence.

While Williams seemed to have a memory lapse, an attorney for the opposing party did not. He recognized him as a former employee and notified his current employer of the conflict.

While his current employer immediately instructed Williams to discontinue working on the matter, not to view or access any documents related to the case, and not to disclose any information he had obtained during his earlier employment, the opposing party moved for disqualification.

The Trial Court disqualified the 2nd firm and the matter went to the Texas Supreme Court. On July 1, 2011, the Texas Supreme Court handed down a decision In Re Guaranty Insurance Services, Inc. and In Re Guaranty Insurance Services, Inc., Relator (No. 10-0364), granting mandamus relief and directing the trial court to vacate its order granting the motion to disqualify.

Luckily for Williams and his employer, the court found that the conflict rule is different for nonlawyers than for lawyers. The presumption that confidences were shared with members of the second employer may be rebutted where nonlawyers are concerned.

How Williams “forgot” he worked on this case with two different employers is beyond me. I’m certain I wouldn’t forget. To be safe, it is a good idea to keep track of the cases you work on so that you can provide full disclosure to the potential employer.

Tune in for my next blog post where I’ll explain the steps that should be taken to put a screen in place in order to avoid disqualification. 
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© 2011 Vicki Voisin, Inc.

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