Conflicts of Interest
Clients hire lawyers for independent legal advice. They expect, and deserve, the undivided loyalty of their legal team. To ensure that loyalty, lawyers and paralegals are ethically obligated to avoid conflicts of interest between clients.
A conflict of interest arises when the interests of one client are adverse to the interests of another client. This situation can arise between two current clients or between a current client and a former client. A paralegal must avoid both situations.
Conflicts Between Existing Clients
Paralegals often serve a screening function, gathering factual information from new clients before the lawyer accepts representation. These pre-representation conversations can be tricky, especially when the prospective client may want the lawyer to assert a position contrary to the interests of another client.
The paralegal's role in preventing conflicts between existing clients is to gather as much information as possible about the prospective client, the nature of the problem presented, and any other involved parties. Each prospective client must pass a “conflicts check” before the attorney-client relationship is formed. In most firms, the conflict information is maintained in a computer database. The paralegal must take great care to check for possible variations in client names — as, for example, when a client named “Johnson Bros., Inc.” is entered in the database as “Johnson Brothers.”
Conflicts with Former Clients
The rule against conflicts of interest with former clients is essentially a rule against switching sides in a dispute. A lawyer who has once represented a client cannot, after the representation is ended, represent another client in a matter that is the same or substantially related to the prior matter.
A paralegal subject to an ethical wall must be proactive in avoiding contact with the conflicting representation. When there is a possibility of a breach in the wall, the paralegal must act by leaving the room, terminating a conversation, or refusing to handle documents. Only active measures can assure the effectiveness of the ethical wall.
The rule against conflicts of interest with former clients is of particular importance for the paralegal who is changing employers. The paralegal is bound by the obligation of confidentiality with respect to all client matters at the former law firm. If the new employer represents clients in matters that are the same or substantially similar to matters the paralegal previously worked on, the conflict of interest rule would disqualify the paralegal from working on the case. Worse, because it is presumed that anyone employed at a law firm is privy to all the client information received by anyone at the law firm, the conflict of interest rule would disqualify the paralegal's new employer from continuing to represent its client.
This harsh result is avoided by prompt identification of these potential conflicts and the erection of an
A written memo to all employees of the new firm explaining that the paralegal is not to perform any legal tasks on the walled-off file.
Instruction in the memo indicating that no employee may discuss the walled-off file with the paralegal.
A physical file that should be marked or flagged to identify it as a restricted file. Of course, the paralegal must take steps to avoid contact with the walled-off file.