The DQ case of the week involves a law firm disqualified for hiring away opposing counsel’s paralegal. Plaintiffs were suing the same corporate parties in eleven consolidated cases, and plaintiffs’ counsel had only one paralegal, Joelle Gonzales. The two worked very closely together on these consolidated cases: “Plaintiffs’ counsel shared his mental impressions and litigation strategies with Gonzales[, and] Gonzales had access to all the clients’ files, interviewed most of the clients, worked on Plaintiffs’ damage models, worked with one expert in the case, and possesses extensive information regarding Plaintiffs’ legal strategies and ‘bottom line’ settlement numbers.” Defense counsel, however, interviewed and decided to hire Gonzales. On learning this news, plaintiffs’ counsel called defense counsel, raised the ethical issues (including that Gonzales knew confidential and privileged information concerning the plaintiffs’ cases), and requested that defense counsel postpone Gonzales’ start date until after the parties finished their scheduled mediation, which was only three weeks away. Defense counsel declined to postpone the start date until after mediation. Defense counsel instead planned to screen Gonzales immediately upon her arrival and provided plaintiffs’ counsel with a fairly comprehensive list of screening measures:

  1. Ms. Gonzales will be physically separated from the actual file in our office as she will be working upstairs and the file—and the attorneys handling the file—will be located downstairs.
  2. The file will be housed in [Attorney Casey] Fitch’s office which is a locked office.
  3. All file management will be handled downstairs, including mail and other documents, and will be routed directly to Mr. Fitch rather than being routed through our normal mail handling process.
  4. All electronic documentation will be password‐protected on our server. Ms. Gonzalez will not have access to the password.
  5. There will be an office wide admonition to all employees: They will not communicate with Ms. Gonzales regarding this matter at any point in time.
  6. There will be an admonition to the attorneys handling the matter not to speak openly about the case but rather to hold all conferences inside an office or in our conference room.
  7. There will be an admonition to Ms. Gonzalez to avoid any conversation regarding the file whether initiated by her or by someone else.
  8. Ms. Gonzales will also be admonished not to disclose any information regarding the file to anyone at [defense counsel’s firm] irrespective of whether it is considered “confidential” or not.
  9. We would be willing to institute a third‐party notification to [outside counsel] by Ms. Gonzales if any breach of the ethical wall occurs in any form.
  10. [] Ms. Gonzales will not be allowed to work on the file or have any contact with the file whatsoever.

After Gonzales began working for the new firm (but presumably not on these cases), plaintiffs’ counsel moved to disqualify the firm.

The court “agree[d] with the majority approach that screening, if effective to protect any client confidences that the nonlawyer gained from prior employment, can avoid the harsh remedy of disqualification.”[1] The court noted, however, that “for screening to avoid the necessity of disqualification, it must be effective,” and “[t]he obligation to effectively screen the new non‐lawyer employee arises from the attorney’s responsibility to ensure that the non‐lawyer does not ‘engage in any activities which, if engaged in by the lawyer, would constitute a violation of the Rules of Professional Conduct.’”[2] The court concluded that “[i]n the instant case, a review of the competing interests calls for a particularly strict assessment of the proposed screening mechanisms.” And although the defendants have an interest in counsel of their choice, “that interest is less weighty here where (i) the case is early in the process, (ii) the primary Defendant is a corporation, and (iii) Defendants have presented no evidence of a long attorney‐client relationship with” the defense firm.

After noting that the burden to establish the effectiveness of the screen falls on the hiring firm, and that “the effectiveness of the screen should not only be judged on its prevention of actual disclosures, but also in counteracting the appearance that client confidences are at risk,” the court concluded that screening would be ineffective in this case—even though the court acknowledged that the firm’s screening measures “mirror and, sometimes exceed, screens approved in other cases.” The fact and timing of Gonzales’ hiring troubled the court for a variety of reasons, including the following factors:

(1) the size and layout of the firm: the firm “is a relatively small firm comprised of nine attorneys, three of which are in a ‘senior’ status, . . . [t]hree of the nonsenior attorneys have entered their appearance in the instant case, . . . [and] all attorneys and support staff for [the firm] work in the same building.”[3]

(2) the nature of the confidential information: “the confidential information possessed by Gonzales is particularly sensitive and susceptible to disclosure given how easily and quickly it could be revealed.” On this point, the court also expressed some “pause” over whether Gonzales could fully comply with the screen: “Notwithstanding [the firm]’s screening mechanisms, the primary onus for keeping the confidences of Plaintiffs will fall on Gonzales. This unavoidable reality gives the undersigned pause. Gonzales’ departure from [plaintiffs’ counsel’s] employment was less than cordial and at least appeared to involve some dissembling on her part. . . . Moreover, as a brand new employee at [the firm], she may feel the misguided need to prove her value to her new employer by disclosing the valuable information she possesses.”

(3) and “the gap, albeit short, between the implementation of the screening procedures and [the defense firm’s] contact with Gonzales:” Although the firm apparently screened Gonzales the second she actually started working at the firm, the court noted that no such screening was in place when Gonzales and the firm began discussing her employment.

The full disqualification order is available here: Ullman v. Denco, Inc., No. 14‐cv‐843 SMV/GBW (D.N.M. April 22, 2015).

[1]           See this post for additional authority on screening nonlawyers (and on disqualification when that screening is untimely or ineffective). The court also cited the following authority: Hodge v. URFA‐Sexton, LP, 758 S.E.2d 314, 320 (Ga. 2014) (citing In re Columbia Valley Healthcare Sys., L.P., 320 S.W.3d 819 (Tex. 2010); Leibowitz v. Eighth Judicial Dist. Court of Nev. ex rel. Cnty. of Clark, 78 P.3d 515, 521 (Nev. 2003); Green v. Toledo Hosp., 764 N.E.2d 979 (Ohio 2002); Hayes v. Cent. States Orthopedic Specialists, Inc., 51 P.3d 562 (Okla. 2002); Phoenix Founders, Inc. v. Marshall, 887 S.W.2d 831, 835 (Tex. 1994); In re Complex Asbestos Litig., 283 Cal. Rptr. 732 (Cal. Ct. App. 1991); Restatement (Third) of the Law Governing Lawyers § 123 cmt. (f) (2000); Cecile C. Edwards, Law Firm Disqualification and Nonlawyer Employees: A Proposal for a Consistent Analysis, 26 Miss. C. L. Rev. 163 (2007); ABA Comm. on Ethics and Prof’l Responsibility, Informal Op. 88–1526 (1988)).

[2]           See, e.g., Model Rule 5.3 (requiring supervision of nonlawyers to ensure compliance with the ethical rules); Model Rule 1.10 cmt. 4 (observing that nonlawyers with the other side’s confidential information “ordinarily must be screened from any personal participation in the matter to avoid communication to others in the firm of confidential information that both the nonlawyers and the firm have a legal duty to protect”).

[3]           For further discussion on the size of a firm and its relevance to effective screening, see this post.