Monday, January 23, 2012

Are Disqualifications Rules the Same For Lawyers and Paralegals?

No.   For instance, if a lawyer with personal knowledge of a case is hired by a new firm, his personal knowledge is automatically imputed to the other lawyers in that firm so that the firm cannot be adverse to his former client.   Henderson v. Floyd, 891 S.W.2d 252 (Tex. 1995).

However, in Phoenix Founders v. Marshall, 887 S.W.2d 831 (Tex. 1994), the Supreme Court held that where a paralegal with knowledge of a particular matter transfers to another law firm acting adversely to that paralegal's former client on a substantially related matter, the paralegal (and thus the new firm) would not be disqualified if the paralegal were properly screened from participation in the matter.    Then-Justice Cornyn, in Conflicts of Interest--Recent Developments in the Texas Supreme Court, 16 REV. LITIG. 515, 528 (1997) stated, regarding this ruling:    "Underlying the Court's result is an expressed concern for the mobility of paralegals and other non-lawyers, especially those who work in large firms on massive, complex litigation."    This distinction regarding paralegals was re-stated and confirmed in In re Mitcham, 133 S.W. 2d 274, 276 (Tex. 2006).

Of course, from this it does not follow that a paralegal can actually work on the other side of the same case after moving to a new firm.     In re Columbia Valley Healthcare Systems, Inc., 320 S.W.3d 819 (Tex. 2010).

It is interesting that the Supreme Court has this concern for the employment mobility of paralegals but does not have the same concern for the mobility of lawyers.     The sweeping imputations of knowledge characterized by cases like Henderson v. Floyd, supra, do, in fact, hinder lawyer job mobility.

For that reason, the Restatement (Third) of the Law Governing Lawyers, Section 204, would provide the same solution (screening) for lawyers that the Texas rule allows for paralegals.     The Texas Supreme Court would do well to re-examine its position on this issue and to consider adopting that favored by the Restatement.

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