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                                         131 N.J.L.J. 1074
                                        August 3, 1992

                                        1 N.J.L. 1281
                                        August 10, 1992

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the New Jersey Supreme Court

OPINION 665

Imputed Disqualification: Employment
of Paralegal who Previously worked
for Adversary (modifies Opinion 546)

    The inquiring law firm wishes to hire a paralegal to assist one of its partners in the prosecution of breast implant and medical malpractice actions on behalf of plaintiffs. The paralegal, who parenthetically has a nursing background, has been employed since December 1990 by another law firm with a heavy concentration of work in joint medical defense of defendants in asbestos litigation. She has spent the vast majority of her time in that area. The law firm that employs the paralegal does medical defense work only. The firm does not represent the defendants on liability issues, which are handled by other law firms. This arrangement was allowed in asbestos litigation so that multiple defendants could pool their resources and present a single medical defense. The defendants' answers are filed by the liability firms and contain cross-claims for indemnification and counterclaims. Presumably, no member of the firm would have access to any liability information on medical issues.
    The law firm that employs the paralegal and the inquiring firm are presently adversaries in many asbestos cases. The other firm has claimed that the paralegal was directly involved in the selection and evaluation of defense experts in cases being prosecuted by the inquiring firm, and has supervised preparation of confidential evaluations of medical issues used by the other firm's clients in settlement negotiations with the inquiring firm.
    The inquiring firm has made a commitment that the paralegal would work solely under the direction of a single partner who has never been and has no plans to become involved in any of the firm's asbestos litigation. Her activities would be limited to the scope of that partner's practice, which is breast implant and medical malpractice litigation. The hiring firm has indicated its willingness to erect a "Chinese wall" around the paralegal by foreclosing her access to the asbestos files and the attorneys handling them, and isolating her office at the opposite end of the building from the firm's "asbestos department."
    The inquiring firm asks whether it may hire the paralegal under the circumstances outlined above.
    In Opinion 546, 114 N.J.L.J. 496 (1984), this Committee held that a law firm representing plaintiffs in toxic tort litigation could not hire a paralegal who had been employed by a firm with which the prospective employer was involved in adversarial matters. The opinion, which relied in part upon Opinion 525, 113 N.J.L.J. 365 (1984), was issued prior to the New Jersey Supreme Court's opinion in Dewey vs. R.J. Reynolds Tobacco Co., 109 N.J. 201 (1988); American Bar Association Informal Opinion 88-1526 (June 22, 1988); and our Opinion 654, 129 N.J.L.J. 514 (1991).
    In Informal Opinion 88-1526, supra, the ABA Standing Committee on Ethics and Professional Responsibility held that in situations such as this, an attorney's obligation is satisfied by cautioning the non-lawyer not to disclose any information relating to the representation of a client of the former employer and ensuring that the non-lawyer performs no work on any matter on which he or she worked for the prior employer or respecting which the employee has information relating to the representation of the client of the former employer. The opinion further warned the hiring law firm and paralegal to strictly adhere to a rigid screening process. In adopting the "Chinese wall" approach, the ABA Standing Committee stated that
        [i]t is important that non-lawyer employees have as much mobility in employment opportunity as possible consistent with the protection of the clients' interests. To so limit employment opportunities that some non- lawyers trained to work with law firms might be required to leave their careers for which they are trained would disserve clients as well as the legal profession. Accordingly, any restrictions on the non-lawyers' employment should be held to the minimum necessary to protect confidentiality of client information.

    Similarly, Opinion 525, supra, 113 N.J.L.J. 365, authorized the erection of "Chinese walls" in order to facilitate the movement of young lawyers from firm to firm.

    More recently, in Opinion 654, supra, 129 N.J.L.J. 514, we modified Opinion 564, 116 N.J.L.J. 204 (1985) and permitted in- house counsel for a major insurance carrier to move to a large plaintiffs' personal injury firm. In so doing, we relied upon Dewey vs. R.J. Reynolds Tobacco Co., supra, 109 N.J. 201, in which the Supreme Court discussed the changes in the black-letter law occasioned by the 1984 adoption of the Rules of Professional Conduct and clarified the criteria for disqualification. We refused to impose a blanket ethical prohibition on firm to firm movement by young lawyers. We did, however, caution that strict monitoring procedures and prohibitions must be adhered to by the hiring firm.
    This inquiry involves a paralegal, not a lawyer. While there is a distinction, we believe that the firm should nevertheless be extraordinarily mindful of, and careful about, any exchange of confidential information received during the course of the prior employment. With that in mind, Opinion 546, supra, 114 N.J.L.J. 496, is hereby modified.

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