Stan and Abby have potentially violated a number of ethical canons, both as determined by the ABA and as determined by the NALA. The first problem comes with the fee arrangement. According to ABA Rule 1.5, which deals with the financial relationship between attorneys and their clients, the fee arrangement in this particular case is not proper. The fee that a lawyer charges could be determined in a number of ways. It might be determined, first, based upon the work or the skill level of the lawyer. It might be contingent upon a result, and thus, subject to be higher in the case of an objective “win” by the lawyer’s side. What the fee cannot be, however, is indeterminate. There must be some amount that is communicated to the client within a reasonable time. In this case, the fee is just a percentage not of the settlement or judgment amount, but of the client’s profit margins. In essence, the client has sold a share in his business, a fee arrangement that violates Rule 1.5.
In addition, Rule 1.7 of the ABA rules maintains that a person cannot take on a case if they have a conflict of interest that will keep them from discharging their duties in a competent way. This is at issue in this case because once the attorney and paralegal have an ownership interest in the client’s business, they may not be able to make decisions that benefit the client. As part-owners, they have conflicting interests in the business, and thus, may have a duty not to represent the client.
Under Canon 2 of the NALA ethical rules, the lawyer must ultimately be responsible to the client and maintain a direct relationship with the client. This did not happen in the instant case, as the lawyer completely passed on the task to Abby.
Under Canon 3, a paralegal is not supposed to participate in or promote the unauthorized practice of law. What this means, then, is that by drafting contracts on her own, conducting depositions, and doing a wide range of other functions that would be constituted the practice of law, Abby violated Canon 3.
Canon 4 of the code states that the legal expertise of lawyers is essential in the public interest. What this means, then, is that paralegals must use solid discretion in determining the limits of their ability and the limits of what they should be doing and not doing. In this case, it seems likely that Abby went well beyond what she should have been doing. She was, in essence, the lawyer on the case, offering legal advice and opinions without consultation from the lead attorney.
Canon 5 states that a paralegal must disclose his or her status as a paralegal at the beginning of the process. This case makes it clear that Abby did not do this. In fact, Abby did the exact opposite with the help of her lead attorney. She was encouraged by Stan to tell clients that she was a lawyer in the firm. With that in mind, she intentionally misled the clients in violation of Canon 5 and a host of other ethical rules. Canon 10 of the NALA rules makes clear that paralegals are not just bound by the paralegal rules of ethical conduct. Rather, they are bound by a host of other rules, including the ABA rules and any state bar rules. With this in mind, Abby’s willingness to assist Stan in breaking a wide range of rules could also be considered a violation of her ethical duty.
- Model, A. B. A. (2001). Guidelines.
- NALA Code of Ethics and Professional Responsibility