Could a law firm avoid disqualification by screening a paralegal who had performed substantive work on pending matters for the opposing party's former counsel?

Plain-English summary

The opinion addressed a paralegal who, while employed by one lawyer, had taken and reviewed statements from clients and witnesses, reviewed memoranda and medical records, and monitored case files on roughly six pending personal injury and workers' compensation matters. The paralegal then moved to the law firm representing the opposing parties in those same matters. The new employer screened and isolated the paralegal from the files and activities relating to those cases and did not permit disclosure of confidences from the former employment, but the former employer's clients, on learning where the paralegal now worked, expressed concern about being disadvantaged.

The opinion framed the question as whether screening and isolation could avoid an attorney's ethical disqualification under DR 5-105(D) in this circumstance. It traced the issue to the Board's own Formal Ethics Opinion 81-F-5 on lawyers changing firms, and to Smith v. Whatcott, in which the Tenth Circuit held that a substantial relationship between a lawyer's former and present matters creates an irrebuttable presumption that the lawyer revealed client facts requiring disqualification, and a second presumption that the lawyer shared that information with new partners, requiring disqualification of the entire new firm, subject only to a limited screening exception the Smith court did not need to decide because no institutional screening mechanisms had actually been in place. On that reasoning, the opinion disapproved the screening exception as a method of avoiding vicarious disqualification given the potential for harm present in the case, and held the attorney ethically prohibited from representing the litigants in the absence of informed consent from all parties.

Currency note

Vacated; overruled in part. Formal Ethics Opinion 89-F-118 (1989) reversed this opinion's categorical rejection of screening, holding that screening is a viable method to avoid imputed disqualification under DR 5-105(D) when supported by adequate institutional mechanisms. The Board of Professional Responsibility separately vacated this opinion outright on September 11, 2015, "due to changes in the laws or rules." This opinion was also issued in 1987, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. It is reproduced and summarized here only as a historical research record. For the Board's current approach to screening, see Formal Ethics Opinion 89-F-118.

Common questions

Q: Could a firm avoid disqualification by screening a paralegal who had worked the same cases for the opposing side?

A: As originally issued, no. The opinion disapproved the screening exception and held the new firm's lawyer ethically prohibited from continuing the representation without informed consent from all parties.

Q: Does this opinion still reflect the Board's position on screening?

A: No. Formal Ethics Opinion 89-F-118, issued two years later, reversed this opinion's categorical rejection of screening and approved screening as a viable method to avoid imputed disqualification when adequate institutional mechanisms are in place.

Q: Is this opinion still in force for any purpose?

A: No. Beyond being overruled in part by 89-F-118, the Board vacated this opinion outright on September 11, 2015. It is preserved here only as a historical research record.

Background and rules framework

The opinion applied former DR 5-105(D) (imputed or vicarious disqualification), relying on federal case law including Smith v. Whatcott and citing City of Cleveland v. Cleveland Electric Illuminating Co., General Electric Co. v. Valeron Corp., Novo Terapeutisk v. Baxter Travenol, and Trone v. Smith. The modern analog is Model Rule 1.10 / Tennessee RPC 1.10 (imputation of conflicts of interest, including the current screening provisions).

Citations and references

Rules of Professional Conduct (former Code):

• DR 5-105(D) (imputed or vicarious disqualification). Modern analog: Model Rule 1.10 / Tennessee RPC 1.10

Cases:

• Smith v. Whatcott, 757 F.2d 1098 (10th Cir. 1985), substantial-relationship presumptions and the unresolved screening exception
• City of Cleveland v. Cleveland Electric Illuminating Co., 440 F. Supp. 193 (N.D. Ohio 1977), aff'd 573 F.2d 1310 (6th Cir. 1977)
• General Electric Co. v. Valeron Corp., 608 F.2d 265 (6th Cir. 1979)
• Novo Terapeutisk v. Baxter Travenol, 607 F.2d 186 (7th Cir. 1979)
• Trone v. Smith, 621 F.2d 994 (9th Cir. 1980)

Other opinions cited:

• Tennessee Formal Ethics Opinion 81-F-5 (imputed disqualification on a lawyer's firm change)
• ABA Formal Opinion 134 (1935)

See also

• Tenn. Ethics Op. 89-F-118: Screening Procedures to Avoid Imputed Disqualification (overrules this opinion in part)
• ABA Formal Op. 510: Avoiding Imputation of a Prospective-Client Conflict
• DC Ethics Op. 279: Screening as a Cure for Imputed Disqualification

Source

• Landing page: https://www.tbpr.org/ethic_opinions/87-F-110

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

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