Ethical Issues for Paralegals and Administrative Staff
Barbara M. Seymour
I. Competence, Professionalism, and Civility
A. Ensuring Competence and Professionalism
B. Civility and the Lawyer’s Oath
II. Confidentiality and Inadvertent Disclosure
A. Confidentiality
B. Confidentiality vs. The Attorney/Client Privilege
C. Practical Tips for Protecting Client Confidences
D. Inadvertent Disclosure
III. Unauthorized Practice of Law
A. UPL Regulation in South Carolina
B. Tips for Avoiding the Unauthorized Practice of Law
IV. Billing and Timekeeping
V. Conflicts of Interest
I. Competence, Professionalism, and Civility
A. Ensuring Competence and Professionalism
The law is the machine that moves our society along. We are hard-pressed to
think of anything in our daily lives that is not affected in some fashion by the law.
Lawyers are involved in just about every aspect of life - government, private
relationships (marriages, divorces, custody of children, etc.), professional relationships
(contracts between parties, employment relationships, etc.), financial transactions,
individual rights, protection from criminals, disputes between neighbors. Therefore it is
vital that the competence of lawyers is assured. There are a number of ways that
society ensures that lawyers are competent - - educational requirements, the
disciplinary process for unethical conduct, and the availability of civil redress against
attorneys who have acted incompetently (legal malpractice).
It is no coincidence that the first Rule in the South Carolina Rules of Professional
Conduct is a requirement that a lawyer provide competent representation to his or her
clients.1 Competence is defined as “the legal knowledge, skill, thoroughness and
preparation reasonably necessary for the representation” of the lawyer’s clients.2
Because the paralegal is a crucial element in the provision of legal services to clients,
society has to be assured of the level of competence of the paralegal profession as well
as that of the legal profession. However, there is no system in place to regulate the
practice of the paralegal profession in South Carolina. Without regulation or licensing of
the paralegal profession, there is no assurance of a level of competence below which
paralegals will not fall.
Competence -- the knowledge, skill and ability of a professional --- is left to the
attorneys and companies that employ paralegals.
Attorneys are subject to a
combination carrot and stick incentive system. The ‘carrot’ is the acceptance of clients
1 The Comments to Rule 1.1 provide a detailed explanation of what the Court considers competency.
“Legal Knowledge and Skill. In determining whether a lawyer employs the requisite knowledge and skill in
a particular matter, relevant factors include the relative complexity and specialized nature of the matter,
the lawyer's general experience, the lawyer's training and experience in the field in question, the
preparation and study the lawyer is able to give the matter and whether it is feasible to refer the matter to,
or associate or consult with, a lawyer of established competence in the field in question. In many
instances, the required proficiency is that of a general practitioner. Expertise in a particular field of law
may be required in some circumstances.”
“Thoroughness and Preparation. Competent handling of a particular matter includes inquiry into and
analysis of the factual and legal elements of the problem, and use of methods and procedures meeting
the standards of competent practitioners. It also includes adequate preparation. The required attention
and preparation are determined in part by what is at stake; major litigation and complex transactions
ordinarily require more elaborate treatment than matters of lesser consequence.”
“Maintaining Competence. To maintain the requisite knowledge and skill, a lawyer should engage in
continuing study and education. If a system of peer review has been established, the lawyer should
consider making use of it in appropriate circumstances.” Rule 1.1 Comments, SCACR.
2 See SCACR Rule 1.1.
of the utilization of paraprofessionals in the practice of law. Paralegals allow attorneys
to practice law more efficiently, more effectively, and less expensively. The more
competent the paralegal, the greater the benefit and value to the attorney. Education,
experience, training, common sense, honesty, dedication -- all the elements of
competence -- work to increase the value of a paralegal’s services. There is great
incentive for the attorney to assure the competence of his paraprofessional staff.
The ‘stick’ is that the attorney is responsible for the actions of the paralegal
acting as his agent. Rule 5.3 of the Rules of Professional Conduct requires that
attorneys ensure that the paralegal’s conduct is compatible with his or her own
professional obligations. Rule 5.3 also makes the attorney responsible for conduct that
violates the rules if the attorney orders, authorizes, or ratifies the conduct or if the
attorney knows of the conduct in time to stop it or mitigate its consequences, but fails to
do so.
However, the paralegal cannot simply rely on the attorney to ensure and maintain
his or her competence. It is the professional obligation of the paralegal, without regard
the absence of a legal requirement, to seek out the education and experience that will
make him or her competent. There are a number of ways that a practicing legal
assistant can develop competence.
Choose a competent attorney. The most competent paralegal cannot cure the
ills of an incompetent lawyer. Place yourself in a working environment that will not only
challenge you and nurture you professionally, but will also be compatible with your level
of skill and ability.
Keep in mind that legal assisting is not simply a job, it is a profession. Paralegals
must work hard and avoid cutting corners and making excuses. Job dissatisfaction
among paralegals often stems from overwork. A paralegal can avoid getting overloaded
by developing organizational skills, learning to delegate, and prioritizing effectively.
Establish effective communication with your attorney. A paralegal must be willing
to admit that he or she has not done something before or that he or she is not sure
where to begin on a particular assignment. The paralegal should seek guidance from
and ask questions of the attorney. It is important for the paralegal to have the attorney
review work in progress.
Seek out and learn from those more experienced and more knowledgeable. Find
a mentor, either an attorney or an experienced paralegal, in your office or in the
community. Joining and participating in a professional association presents not only an
opportunity to network with your colleagues, but also opens the door to establishing a
special relationship with someone willing to guide you in your career.
Stay abreast of current developments in your practice areas. Paralegals educate
and re-educate themselves by subscribing to (AND READING) trade and legal
publications, enrolling in paralegal studies courses and certificate programs, and
attending continuing education seminars.
B. Civility and The Lawyer’s Oath
On September 1, 2003, the Supreme Court of South Carolina adopted a revised
version of the Lawyer’s Oath3 based on the recommendations of the Chief Justice’s
Commission on the Profession. The establishment of the Commission and the revision
of the oath were in response to growing concern about a perceived decline in civility and
integrity of the profession.
A lawyer’s oath is a pledge to uphold the law, to assist in the advancement of justice
for all people, and to discharge professional duties with competence, honor, and
integrity. The oath creates a standard higher than what is minimally required by the
Rules of Professional Conduct. However, that standard is not merely aspirational.
Under Rule 7 of the Rules for Lawyer Disciplinary Enforcement, one of the grounds for
discipline is a finding of a violation of the lawyer’s oath of office. Therefore, violations of
the oath that rise to the level of ethical misconduct subject the lawyer to sanction just as
violations of the Rules of Professional Conduct would. The oath imposes certain
professional obligations on the lawyer. As stated previously, a lawyer is required to take
reasonable steps to ensure that nonlawyers in the law office comply with the lawyer’s
professional obligations.4 For this reason, it is essential that nonlawyers working in the
law office familiarize themselves with the content and meaning of the lawyer’s oath.
There are three primary additions to the oath contained in the 2003 revision. First is
a pledge of courtesy and respect to “those who assist” judicial officers. Previously,
lawyers pledged only respect and only to courts and judicial officers. The addition of a
requirement of courtesy reflects a recurring theme of civility in the revision. The
inclusion of those who assist judges in this section reminds lawyers that staff in the
clerk’s office, court reporters, law clerks and others are entitled to the same treatment
as the judges for whom they work. This illustrates that it is the courts, not merely the
person wearing the robe, that are to be treated professionally and courteously.
Because it is often the nonlawyers in the office who deal directly with courthouse
personnel and court reporters, lawyers should instill in them the same obligations
imposed on the lawyers themselves.
The second change in the revised version of the oath is the addition of a pledge of
“faithfulness, competence, diligence, good judgment, and prompt communication.” A
lawyer is already bound to provide these to his clients under the Rules of Professional
Conduct.5 However, inclusion of these requirements in the oath of office emphasizes
their significance and elevates them to a matter of professionalism, not simply a matter
of ethical compliance. Well-trained law office employees already know about the ethical
3 The
text of the Lawyer’s Oath and the procedure for its administration are found in Rule 402(k), SCACR.
Rule 5.3, RPC, Rule 407, SCACR, referenced above.
5 See Rules 1.1, 1.2, 1.3, 1.4, and 2.1, RPC, Rule 407, SCACR.
4 See
requirements of competent and diligent representation and adequate and meaningful
communication. They should also recognize these as matters of professionalism.
The third new element adopted by the Court in the revised oath is a pledge of
“fairness, integrity, and civility” to opposing parties and opposing counsel. By its very
nature, much of what attorneys do is adversarial. By including an obligation of
professional treatment of their adversaries, the Court is telling lawyers that zealous
representation of their clients does not require rudeness, deception, or hostility towards
opponents. This portion of the oath also provides that this pledge applies “not only in
court, but also in all written and oral communications” with opposing parties. The
message is that it is not enough to make a show of civility in public; the lawyer is
required to act at all times in conformance with this promise. As with court personnel,
the paralegal is often the one with the most contact with opposing parties and their
counsel. They must act fairly, honestly, and respectfully, regardless of the nature of the
matter or the context of the interaction.
II. Confidentiality & Inadvertent Disclosure
A. Confidentiality
Maintaining client confidentiality is so basic to the concept of the attorney-client
relationship that a thorough understanding of it is often taken for granted.
Confidentiality is an issue that should be addressed from a system-wide perspective.
The legal team should ask itself: Do we fully understand what confidentiality means?
Do we have adequate protections in place to safeguard confidential client information?
Are we maintaining our filing, communication, and technology systems in a manner
adequate to ensure that our ethical obligations are met with regard to client
confidentiality?
The Rule regarding client confidentiality is Rule 1.6, which states:
a) A lawyer shall not reveal information relating to the representation of a
client unless the client gives informed consent, the disclosure is impliedly
authorized in order to carry out the representation or the disclosure is
permitted by paragraph (b).
(b) A lawyer may reveal information relating to the representation of a
client to the extent the lawyer reasonably believes necessary:
(1) to prevent the client from committing a criminal act;
(2) to prevent reasonably certain death or substantial bodily harm;
(3) to prevent the client from committing a crime or fraud that is
reasonably certain to result in substantial injury to the financial
interests or property of another and in furtherance of which the
client has used or is using the lawyer’s services;
(4) to prevent, mitigate or rectify substantial injury to the financial
interests or property of another that is reasonably certain to result
or has resulted from the client’s commission of a crime or fraud in
furtherance of which the client has used the lawyer’s services;
(5) to secure legal advice about the lawyer's compliance with these
Rules;
(6) to establish a claim or defense on behalf of the lawyer in a
controversy between the lawyer and the client, to establish a
defense to a criminal charge or civil claim against the lawyer based
upon conduct in which the client was involved, or to respond to
allegations in any proceeding concerning the lawyer's
representation of the client; or
(7) to comply with other law or a court order.
Attorneys who employ and supervise paralegals must be particularly concerned
with confidentiality. The Comments to Rule 5.3 Responsibilities Regarding Nonlawyer
Assistants; (the rule that makes the attorney responsible for the unethical conduct of his
staff) specifically warn lawyers about the nonlawyer’s obligation to maintain client
confidences: “A lawyer should give legal assistants appropriate instruction and
supervision concerning the ethical aspects of their employment B particularly regarding
the obligation not to disclose information relating to the representation of the client.”
(Emphasis added.) Client confidentiality is the only ethical obligation specifically
pointed out in the comments to Rule 5.3, which should alert the practitioner to its
significance.
Unfortunately, client confidentiality is an easy rule to break simply because the
definition of client confidences is often misunderstood by lawyers and legal assistants
alike. Many paralegals presume that confidential information consists only of secrets
told to the paralegal or the lawyer in confidence. However, confidential information is
not just client “secrets” of which third parties have no knowledge. Confidential
information is ANY INFORMATION about the client or the client’s legal matter regardless of whether it is secret and regardless of its source. 6
With a few exceptions: revealing information with the client’s consent; revealing only such information
as is necessary for representation; revelation of information reasonably necessary to prevent a client from
committing a crime; revealing information in order to defend against a claim by a client.
6
B.
Confidentiality vs. The Attorney/Client Privilege
The Rules of Professional Conduct prohibit the lawyer --- and therefore the
lawyer’s staff --- from revealing any information relating to the representation of the
client. It is important to distinguish this concept of client confidentiality (an ethical
limitation) from the attorney/client privilege (an evidentiary limitation). Where the
attorney/client privilege protects the client from having his secrets revealed in court by
the attorney and the attorney’s staff, the duty of confidentiality applies in all
circumstances (in court and outside court) to all information about the client and the
client’s case. Where the privilege can be waived when the client reveals his secrets to
a third party or when the secret becomes public knowledge, client confidentiality applies
regardless of general or specific knowledge of the information by those outside the
relationship.
It is incumbent upon the attorney-employer to discuss confidentiality issues with
legal assistants and staff both at the time they are hired and then periodically,
throughout the course of the employment. It should not be presumed that even the
educated or experienced paralegal has a complete grasp of confidentiality issues.
Education and training of nonlawyers on this issue should include thorough review of
the Rule and its exceptions, discussion of specific hypotheticals and examples, and the
opportunity to ask questions. To further emphasize the importance of these issues,
employees should be required to sign a statement of understanding of the confidential
nature of the work both at the time they are hired and when this issue is reviewed.
Written policies and procedures about the handling of confidential matters and
communication regarding clients and their files are essential to ensure compliance.
Some areas that should be addressed in those policies and procedures follow.
C. Practical Tips for Protecting Client Confidences
As tempting as it may be to talk about work with colleagues, friends, and family,
client confidences must not be revealed, even hypothetically.
With regard to
communications outside the office, members of the legal team should never discuss
clients or cases at home or in social settings. Additionally, discussing clients or cases
with co-workers outside the office should be avoided in the event such conversations
could be overheard.
Legal assistants should be cognizant of their surroundings when communicating
with clients, even in the office. Even brief in-person conversations with clients should
be conducted in a conference room or office with the door closed, not in the lobby or the
hallway. When speaking with or about a client or a case by phone, the door to the office
should be closed and the use of the speaker phone should be avoided. A call from or
about a client should certainly not be taken with another client or third party present.
Individual offices should be arranged so as to avoid opportunities for visitors to
inadvertently or intentionally observe or obtain confidential client information. Files on
the desk or other furniture should be kept closed. Computer monitors should be
positioned so they are not in the line of vision of visitors in the office or passers-by.
Password-protected screen savers prevent others from viewing client information in the
user’s absence. Mail should be kept in a closed folder, not open on the desk or within
view. Individual offices and work areas should be separated from the lobby and
conference room areas by a closed door.
Security and integrity of client files is a concern for lawyers, paralegals and all
office staff. Access to the file room or filing cabinets should be limited. In large offices
there may even be staff members that have no need for access to client files. If client
information is stored in a computer database, access to that database must be
controlled. Computer passwords should be periodically changed and should not be
written down in the office. If members of the legal team take client files, computer disks,
or laptops containing client information outside the office, policies should be established
for securing those files and computers. All waste paper should be shredded.
Modern technology presents lawyers and paralegals with new and exciting
opportunities to improve responsiveness and efficiency. At the same time, however,
advances in communication technology presents new challenges to professionals
obligated to ensure the integrity of client information. While faxing and emailing client
information is not necessarily a violation of client confidentiality, such mechanisms
should be utilized with caution and attention. Sending sensitive client information by fax
and email should be avoided whenever possible. When using faxes, call ahead to
confirm the number and ensure that the intended recipient is available to receive it.
Faxes should be prominently marked confidential and should request that the recipient
call the sender to confirm receipt.
As with faxes, email addresses should be confirmed prior to use and messages
should be set up to generate a return receipt. It is also important to include a prominent
confidentiality statement in the text of client-related email messages. Clients who wish
to communicate with the law office by fax or email should be advised of the lack of a
guarantee of security and should be advised against transmittal of sensitive information
by such means.
Again, it cannot be assumed that members of the legal team will already know
how to handle client information. Addressing these issues in advance is much more
pleasant that explaining inadvertent lapses in security to the client or violations of
confidentiality to the Court. As with all ethical considerations, client confidentiality
should be approached with thoughtfulness and common sense. When considering
habits and policies regarding client communications and client files, attorneys and legal
assistants should err on the side of caution and even take extra steps to maintain
confidentiality. Attorneys should also be cognizant of the example that they set. Even
with training, education, and well-written policies and procedures, members of the team
will follow the leader who fails to comply with his or her own rules.
D. Inadvertent Disclosure
In the recent revisions to the Rules of Professional Conduct, the Court added a
provision regarding the inadvertent disclosure of confidential information. Under the
new Rule 4.4(b), a lawyer who receives a document in a case that he knows or should
know was sent to him by accident is required to notify the sender. This puts the burden
on the sender to take what ever action is necessary to retrieve the document or protect
it from further disclosure. If you receive a document or information that you believe
might have been sent by mistake, you must report it to your supervising attorney
immediately.
In writing this rule, the Court stopped short of requiring that the lawyer refrain
from reading or using the document, that the lawyer return the document to the sender,
or that the lawyer follow the sender’s instructions regarding the document. Although
pursuant to prior case law, the attorney-client privilege is not waived by inadvertent
disclosure, the opposing counsel’s review and use of the information is not ethically
prohibited. This means that staff must be vigilant in insuring that documents and other
information are not inadvertently sent to the wrong person. At best, the lawyer will have
to seek protection of the information from the court. At worst, the client’s legal matter
could be severely compromised.
The paralegal can employ a few basic policies to avoid inadvertent disclosure.
> Have only one file open on your desk at a time.
> Don’t batch print documents for mailing. Print the document, mail it, then print
the next document.
> Clear copy machines and other work spaces before beginning a documentrelated task.
> Separate privileged documents into folders within the client file.
> Double-check mailing addressed, email addresses, and fax numbers before
sending.
> Do not REPLY or REPLY ALL when using email.
> Change the settings on your email software so that it does not default to
previous addresses as you type in the “TO” field.
III.
Unauthorized Practice of Law
There is perhaps no other topic that sends chills down the spine of a paralegal
than the unauthorized practice of law. The primary reason for this concern is that the
distinction between what is and is not practicing law can oftentimes be blurred. When
faced with the opportunity to define the unauthorized practice of law, the South Carolina
Supreme Court declined, choosing instead to identify the parameters of the practice of
law on a case-by-case basis.7 In this way, the Court can achieve its stated goal of
“[striking] a proper balance between the legal profession and other professionals which
7 See In re Unauthorized Practice of Law Rules, 309 S.C. 304, 422 S.E.2d 123 (1992).
will ensure the public’s protection from the harms caused by the unauthorized practice
of law.” 8
Why limit the practice of law to lawyers? At a time when there is much criticism
of the legal profession, some argue that prohibition on nonlawyers engaging certain
areas of law is an unfair restraint on trade designed only to protect the attorney
monopoly. Proponents of this position miss the point of the restriction. Lawyers are
certified to be competent to give legal advice and handle legal matters. Additionally, the
regulatory system that governs the practice of law ensures a certain level of
competence will be maintained. If nonlawyers are allowed to assist people in their legal
matters without the supervision of attorneys, there is no assurance that the advice given
or documents prepared will be correct and no protection against loss when they are not.
The Court reaffirmed the purpose of limiting the practice of law to licensed attorneys in
1939, stating:
[I]t is not amiss to observe that the policy of prohibiting laymen from
practicing law is not for the purpose of creating a monopoly in the legal
profession, nor for its protection, but to assure the public adequate
protection in the pursuit of justice, by preventing the intrusion of
incompetent and unlearned persons in the practice of law. We may add
that a dual trust is imposed on attorneys at law, they must act with all good
fidelity to the courts and to their clients. They are bound by canons of
ethics which have been the growth of long experience and which are
enforced by the courts. 9 (Emphasis added.)
A. UPL Regulation in South Carolina.
South Carolina’s criminal statute makes the unauthorized practice of law a
felony. Our unauthorized practice of law statute is unequivocal:
No person may either practice law or solicit the legal cause of another
person or entity in this State unless he is enrolled as a member of the
South Carolina Bar pursuant to applicable court rules, or otherwise
authorized to perform prescribed legal activities by action of the Supreme
Court of South Carolina. The type of conduct that is the subject of any
charge filed pursuant to this section must have been defined as the
unauthorized practice of law by the Supreme Court of South Carolina prior
to any charge being filed. A person who violates this section is guilty of a
felony and, upon conviction, must be fined not more than five thousand
dollars or imprisoned not more than five years, or both.10
The scope of this prohibition is not limited to appearances in court. The practice
of law includes the preparation and filing of documents and the giving of legal advice
8 Id. at 125.
9 State ex rel. Daniel v. Wells, 191 S.C. 306, 5 S.E.2d 181 (1939).
10 § 40-5-310 S.C. Code Ann. (1976, as amended 2009).
associated with the preparation of documents and appearance in court. Therefore, a
nonlawyer engaging in either the preparation for a court appearance or the appearance
itself is subject to penalties under the criminal statute.11
A nonlawyer is allowed to represent himself or herself as a pro se litigant. Until
June 2002, nonlawyers could also prosecute or defend the cause of others under
certain circumstances. Section 40-5-80 of the South Carolina Code used to provide for
lay representation if the presiding judge approved and if the lay advocate received no
compensation. This statute was rewritten in 2002 to eliminate lay representation,
preserving only a litigant’s right to appear pro se.12
These two code sections essentially prohibit even trained, experienced
paralegals from offering services directly to the public without the supervision of a
licensed attorney.13 The issue of independent paralegal services is hotly debated by
both paralegals and lawyers. As mentioned earlier, many advocates for the paralegal
profession and members of the public are highly critical of policy that appears to serve
only to protect lawyers’ pocketbooks. However, our Court has consistently held that
prohibitions on independent paralegals contracting directly with clients are not designed
to protect financial interests of attorneys, but rather to protect the public from erroneous
advice from those untrained in the law.14 The competing concerns of a lack of low-cost
legal services and lack of standards and regulations for paralegals are important and
will likely continue to fuel discussion and debate. In the meantime, the threat of going to
jail is quite possibly the best incentive legal assistants have for developing habits and
policies that avoid crossing the line of practicing law.
The authority and responsibility for the regulation of the practice of law in South
Carolina are vested in the Supreme Court by the State Constitution.15 Unauthorized
practice of law cases, like the practice of law itself, are unique. Few issues can be
raised in the original jurisdiction of the Supreme Court and even fewer are subject to its
exclusive authority and control. It is self-evident that the appropriate body to determine
what is and is not the practice of law is the Supreme Court.
The analysis of unauthorized practice by necessity begins with an attempt to
determine what is and what is not the practice of law. In 1909, the Supreme Court of
South Carolina adopted the United States Supreme Court definition of attorneys as
“[p]ersons acting professionally in legal formalities, negotiations or proceedings by the
warrant or authority of their clients.”16
In a number of decisions that followed the adoption of this general definition, the
Court has analyzed the conduct of a variety of nonlawyer professionals to determine the
11 See State v. Robinson, 321 S.C. 286, 468 S.E.2d 290 (1996).
12 For a recent case decided after amendment of this statute, see Housing Authority of the City of
Charleston v. Key, 352 S.C. 26, 572 S.E.2d 284 (2002).
13 See Robinson, supra; See also, State v. Despain, 319 S.C. 317, 460 S.E.2d 576 (1995).
14 See State ex rel. Daniel v. Wells, 191 S.C. 306, 5 S.E.2d 181 (1939).
15 S.C. Const. art. V, para. 4. See also, S.C. Code Ann. Sec. 40-5-10 (1986).
16 In re Duncan, 83 S.C. 186, 189, 65 S.E. 210 (1909).
bounds of unauthorized practice. Those boundaries have been drawn largely based on
case-by-case analyses of conduct of particular individuals. For example, insurance
company employees cannot represent their employers before the South Carolina
Industrial Commission;17 commercial title companies cannot prepare title abstracts,
deeds, mortgages, and other legal documents or conduct real estate closings without
the supervision of an attorney;18 nonlawyer employees of the solicitor’s office cannot
negotiate guilty pleas or appear in transfer court on behalf of the state 19; and, a
nonlawyer cannot prepare preprinted forms to be presented by clients pro se in
domestic matters when such preparation includes advice, explanation, and/or
recommendation.20
Not all of the decisions handed down since Duncan prohibit nonlawyers from
engaging in court-related activities on behalf of others. The limitations on what
constitutes the practice of law are sometimes determined by the nature of the case or
the venue in which it is pending. For example, while arresting officers and their
supervisor may conduct the prosecution of misdemeanor traffic violations in the
magistrates' courts,21 nonsupervising, nonarresting officers cannot.22 Additionally, a
nonlawyer officer or agent of a corporation may not appear for the “pro se” corporation
in matters before the circuit or appellate courts, but may appear in magistrate’s court
cases.23
While exclusive jurisdiction over unauthorized practice of law cases clearly keep
the Supreme Court busy, the Court has declined to promulgate a precise and allinclusive definition of the practice of law, even in spite of a recommendation to do so
from the Bar.24 The variety and number of UPL cases that have come before the Court
thus far illustrates the need for a fluid and flexible approach rather than a specific and
static definition.
Another effective mechanism for preventing paralegals from practicing law is
holding attorneys ethically responsible for activities of nonlawyer staff. While not
specifically mentioning UPL, Rule 5.3 of the Rules of professional conduct requires that
a lawyer have in place sufficient measures to ensure that the conduct of nonlawyer staff
conforms to the lawyer’s ethical obligations.25 Further, the lawyer is responsible for the
misconduct of nonlawyer staff as if she engaged in the misconduct herself, if she
orders, ratifies, or fails to mitigate the misconduct.26
17 State ex rel Daniel v. Wells, 191 S.C. 468, 5 S.E.2d 181 (1939).
18 State v. Buyers Service Company, Inc., 292 S.C. 426 357 S.E.2d 15 (1987).
19 In the Matter of Lexington County Transfer Court, 334 S.C. 47, 512 S.E.2d 791 (1999).
20 State v. Despain, 319 S.C. 317, 460 S.E.2d 576 (1995)
21 State ex rel. McLeod v. Seaborn 270 S.C. 696, 244 S.E.2d 317 (1978).
22 State v. Sossaman, 298 S.C. 72, 378 S.E.2d 259 (1989)
23 Renaissance Enterprises, Inc. v. Summit Teleservices, Inc., 334 S.C. 649, 515 S.E.2d 257 (1999)
24 In re Unauthorized Practice of Law Rules Proposed by the South Carolina Bar, 309 S.C. 304, 422
S.E.2d 123 (1992).
25 Rule 5.3(a) and (b), Rule 407, SCACR.
26 Rule 5.3(c), Rule 407, SCACR.
In addition to holding lawyers accountable for failing to adequately supervise
nonlawyer assistants under Rule 5.3, the Rules of Professional Conduct subject lawyers
to professional discipline for assisting someone in the unauthorized practice of law
under Rule 5.5. It is clear that this prohibition applies to paralegals. The Rule “does not
prohibit a lawyer from employing the services of paraprofessionals and delegating
functions to them, so long as the lawyer supervises the delegated work and retains
responsibility for their work.”27
As the paralegal profession grows and lawyers and clients become more
dependent on the unique services paralegals offer, the bounds of acceptable activity of
legal assistants are being broadened. The definition of the practice of law set forth in
Duncan was written long before the advent of paraprofessionals in the legal field.
Today, legal assistants rather than attorneys do the majority of the preparation of
pleadings and “legal instruments of all kinds” in law offices. As paralegals become
better trained and better educated, legal employers and clients increasingly rely on
them to handle tasks that had traditionally been handled only by attorneys. The
expansion of the responsibilities delegated to professional legal support staff is pushing
the line that defines the practice of law.
The Supreme Court identified the supervisory role of the attorney as the key
factor in defining what legal assistants can and cannot do. The Court has held that
“[a]ctivities of a paralegal do not constitute the Practice of Law as long as they are
limited to work of a preparatory nature which enables the licensed attorney to carry the
matter to a conclusion through his own examination, approval or additional effort.”28
But what is “work of a preparatory nature” and what constitutes “supervision” by
an attorney? These questions arise most frequently in the real estate context.
Attorneys in this area of law are heavily dependent on paralegals to assist in the
preparation and execution of real estate closing documents. While it has no criticism for
the utilization of paraprofessionals in real estate matters, the Court has made it clear in
a number of opinions that certain aspects of the real estate closing process are the
practice of law and can only be done by an attorney or with an attorney present. 29 In
the Lester case, a lawyer was reprimanded for allowing a nonlawyer to conduct real
estate closings when he was not in the office. It was not sufficient that the lawyer was
available to respond to questions by telephone. The Court expressed its growing
impatience with attorneys who continue to allow paralegals to close loans in spite of its
opinions prohibiting this. The Court cautioned the Bar, in no uncertain terms, that this
practice, and others involving UPL by paralegals, would not be tolerated:
We also take this opportunity to state that we view with alarm the growing
tendency of attorneys to allow support staff to perform functions which
27 Comment, Rule 5.5(b), Rule 407, SCACR.
28 In the Matter of Easler, 275 S.C. 400, 272 SE2d 32 (1980).
29 State v. Buyers Service Company, Inc, supra; Matter of Reeve, 335 S.C. 169, 516 S.E.2d 200 (1999);
In re Konohia, 346 S.C. 2, 550 S.E.2d 318 (2001); In re Edens, 344 S.C. 394, 544 S.E.2d 627 (2001);
Matter of Lester, 353 S.C. 246, 578 S.E.2d 7 (2003).
should be performed by attorneys. We caution members of the Bar that
this practice dilutes the attorney-client relationship and diminishes the
attorney's ability to monitor all aspects of a case for which the attorney is
ultimately responsible. We further direct the Bar's attention, once again, to
In re Easler, [citation omitted], in which this Court set forth guidelines with
regard to the role of paralegals in assisting attorneys, and to State v.
Buyer's Service Co., Inc., [citation omitted], in which this Court held that
real estate closings should be conducted only under the supervision of
attorneys. We encourage members of the Bar to review these cases as
well as the provisions of the Rules of Professional Conduct … which
address the delegation of functions to support staff.
The requirement that a lawyer be present during the signing of legal documents
is not necessarily limited to real estate closings. Based on the generalized language in
the Lester opinion, the Court could expand its definition of the practice of law to include
presence at the execution of wills and other estate documents, liability releases and
other personal injury settlement documents, or any other document about which a client
might have questions calling for legal advice. The Ethics Advisory Committee issued an
opinion in 2002 that held that although a paralegal can gather information and draft
documents, the lawyer must supervise their execution.30 The Committee based this
opinion on the idea that the execution of documents encompasses more than just
signing on the dotted line:
[W]e believe that there comes a time in every transaction where a lawyer's
advice and presence are essential. "We are convinced that real estate and
mortgage loan closings should be conducted only under the supervision of
attorneys, who have the ability to furnish their clients legal advice should
the need arise and fall under the regulatory rules of this court. Again the
protection of the public is of paramount concern." Buyers Service
Company Inc., 292 S.C. 426, 357 S.E.2d 15 (1987).
When a client retains a lawyer for what may be considered a routine
transaction, that client clearly expects to receive more than the mere blank
form with instructions on how to complete it. Furthermore, once retained,
the lawyer must then provide consultation. Because a lawyer has a duty to
supervise a nonlawyer who is working under his or her direction, this
supervision should include the period during the execution of documents
as well. While it may be permissible for the paralegal alone to gather
information, we deem it not permissible for the paralegal alone to assist
the client in the execution of the documents outside of the presence of the
lawyer. We further opine that once a client has consulted the lawyer or the
paralegal, the lawyer's duty to supervise the paralegal (coupled with the
lawyer's duty to advise and protect the client) invokes the lawyer's
intervention.
30 SC Ethics Advisory Opinion 2002-12.
There have been a number of disciplinary cases in which lawyers were
sanctioned for assisting in the unauthorized practice of law of support staff in contexts
other than real estate closings. In the Matson case, a lawyer was disciplined, in part, for
allowing a secretary to appear in court on behalf of a client and request a continuance.31
In the Zenner case, a lawyer was reprimanded for allowing nonlawyer employees of a
collection agency to use his law firm name.32 In that case, the collection agents both
gave legal advice and rendered legal opinions when talking with debtors about
outstanding accounts.
While it has no regulatory control over the conduct of paralegals, the Court’s
ability to sanction lawyers is an effective tool to prevent paralegals and other nonlawyer
professionals in the law office from crossing the line into the unauthorized practice of
law.
B. Tips for Avoiding the Unauthorized Practice of Law.
Some pitfalls of unauthorized practice of law are easy to avoid. Paralegals know
that they are not allowed to set or share in attorney’s fees, negotiate settlements,
appear in court or at depositions, sign pleadings, or otherwise hold themselves out as
attorneys. But many paralegals, particularly in very small firms, face more subtle
challenges. A legal assistant should not assume that simply because she is employed
by a law firm where duties and tasks are delegated by an attorney that she cannot
engage in the unauthorized practice of law.
In a law office setting, the paralegal faces pressure to cross the unauthorized
practice line from both sides. Attorneys rely on their paralegals to alleviate the workload
and deal with problems independently. On the other hand, clients often have more
contact with the paralegal than the lawyer and develop a closer, more reliant
relationship with the paralegal. There are several rules that a paralegal should adopt to
avoid UPL.
(1) Avoid being perceived as a lawyer. You risk inadvertent practice of law if you
are perceived as a lawyer rather than a legal assistant. You should start every client
relationship by identifying yourself as a paralegal or legal assistant and by defining your
role in contrast to that of the lawyer. Establish a clear understanding of the difference in
the role of the lawyer and the role of the legal assistant by introducing the client to the
lawyer at the first meeting. The client may need to be reminded on occasion that you
are not a lawyer and cannot give legal advice. Throughout the course of the
representation, and at all times while acting as a representative of the attorney, a legal
assistant should identify himself or herself as a paralegal or legal assistant in all
conversations and correspondence. If you sign a letter, include your title on the
signature line. If your name appears on law firm letterhead or business cards, insist that
you be identified by your title.
31 Matter of Matson, 333 S.C. 242, 509 S.E.2d 263 (1998).
32 Matter of Zenner, 348 S.C. 499, 560 S.E.2d 406 (2002).
(2) Never give legal advice. Everyone knows this rule, but giving advice is very
difficult to avoid in the real world. You can give factual information and instruction.
While it is a better practice for the attorney to give legal advice directly to the client, if
circumstances make that impractical, you can relay legal advice or opinions from the
attorney. Your conversations and correspondence should make it clear that the source
of the advice is the attorney, not you. Schedule the attorney to meet with the client
whenever he or she will be required to read and sign legal documents. If this is not
possible, send copies of the documents to the client in advance of your meeting with the
attorney’s full explanation of the legal consequences of the documents and asking the
client to call the attorney with any questions or concerns prior to coming in to sign.
(3) Do not conduct real estate closings without an attorney present. The
disciplinary opinions discussed above make it clear that paralegals who conduct real
estate closings without the attorney present are engaging in the unauthorized practice
of law. With regard to the execution of other documents, review the relevant opinions
and talk with your attorney before proceeding.
(4) Just say no to family and friends. Another risk paralegals face with regard to
the practice of law is pressure from friends and family for advice or assistance with their
own legal matters. When it comes to legal matters, you are likely to be the most
knowledgeable person that they know. Your compassion and concern for your loved
ones may tempt you to help them avoid legal fees by giving them assistance or advice.
Your assistance and advice may be absolutely correct, but it is the practice of law. It is
better that you establish a good relationship with your attorney and that you network
with attorneys outside your area so that you can garner lower fees or even free advice.
(5) When in doubt, don’t do it. A legal assistant can avoid the unauthorized
practice of law simply by being aware of the rules and using common sense. If you are
not sure if a particular activity would violate the prohibition on the unauthorized practice
of law, don’t chance it. When in doubt, insist that the attorney do it. Some attorneys
ignore what they believe are annoying, petty, or overly cautious ethical concerns. It is
not worth your job -- or worse -- to commit an ethical violation just because you did not
want to annoy your boss. Explain that you want to be sure neither one of you gets in
trouble.
(6) When your attorney bails on you, stop working. Unfortunately, some lawyers
find themselves in situations that make them unable to come into the office.
Depression, financial problems, addiction, abuse, etc. can lead to unexpected and
extended absence from the office. Your loyalty to the attorney or the clients, or both,
may lead you into a situation in which you feel you have no choice but cross the line.
Don’t. Running an office without the attorney present or reasonably available is working
without supervision. If you reach the point where your attempts to keep things going
during an extended absence of your boss turns into the unauthorized practice of law,
get out of the situation. You can help an attorney who is suffering from mental or
physical impairment by contacting the SC Bar’s Lawyers Helping Lawyers (this can be
done anonymously). It is better to have a lawyer who was placed on incapacity status
on your resume than one who was disbarred.
permanently hinder your career.
Don’t allow a situation like that to
IV. Billing and Timekeeping
Rule 1.5 requires lawyers to limit fees and expenses to what is reasonable.
Reasonableness is based on an analysis of eight factors set out in the rule:
(1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly;
(2) the likelihood that the acceptance of the particular employment will preclude
other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the
services; and
(8) whether the fee is fixed or contingent.
Questions of reasonableness are generally resolved by the Resolution of Fee
Disputes Board or a civil court, rather than by the Supreme Court in a disciplinary
action. More often, the Court addresses questions of improper billing in cases where a
lawyer fails to adequately explain the fee structure to the client or deliberately inflates a
bill. A lawyer can only charge a client for the work that is actually performed for that
client. “A lawyer who has agreed to bill on the basis of hours expended does not fulfill
her ethical duty if she bills the client for more time than she actually spent on the client's
behalf. Accordingly, a lawyer who has undertaken to bill on an hourly basis is never
justified in charging a client for hours not actually expended by her.” American Bar
Association Formal Opinion 93-379. Double-billing (charging more than one client for
the same work) and padding bills are stealing, just as if the lawyer removed funds from
a client trust account. Hourly billing systems and minimum billing requirements for
members of the legal team sometimes foster cheating. Paralegals who have minimum
billing requirements must resist the urge to over-bill or fudge on time records.
A lawyer may charge hourly rates for services rendered by nonlawyer
employees. However, the lawyer has a duty to communicate basis or rate of those
charges, preferably in writing, before or within a reasonably time after commencing the
representation. (See Rule 1.5(b)). “[A] lawyer has a duty to disclose to a client the
amount to be charged for the services rendered by … nonlawyer employees. The
lawyer may not include such services within the time billed by the lawyer without
disclosing that the services were performed by nonlawyers. The client should be
informed of the rate for each lawyer, paraprofessional, and other nonlawyer who will
work on the client’s case.” SC Ethics Advisory Opinion 94-37; Adopted by the Court in
Matter of Jennings. “Such services should be separately itemized on the billing to the
client and are normally billed at rates lower than the rates for services of a lawyer. [It]
would be a fraudulent misrepresentation to the client that legal services had been
rendered by a lawyer if the billing for … nonlawyer services were represented as
attorney time.” New Mexico Advisory Opinion 1990-4.
Fees and expenses submitted to a court in connection with an attorney’s fee
petition must be accurate and must reflect the fees and expenses actually charged to
the client. In re Massey, 357 S.C. 439; 594 S.E.2d 159. See also; In the Matter of
Anonymous Member of the Bar, 317 S.C. 10, 451 S.E.2d 391.
“[A] lawyer or law firm may institute a paralegal bonus system that bases the
amount of a bonus on the amount billed to clients, provided that the amounts billed to
clients are reasonable under Rule 1.5. … We caution that Rule 1.5 requires that a
lawyer's fee be reasonable. A bonus system based on time charged to a file could
induce a paralegal to spend more time on a file than is actually required to handle the
matter.” SC Ethics Advisory Opinion 97-02. However, a lawyer may not pay nonlawyer
based on a percentage of a particular fee earned. In Re Anonymous 295 S.C. 25, 367
S. E. 2d 17 (1988); In the Matter of Brown 461 S. E. 2d 385 (1995).
V.
Conflicts of Interest
Under the Rules of Professional Conduct, lawyers are subject to discipline for
engaging in activities in which his or her interests conflict with that of a client or in which
the interests of clients conflict with each other. As with all ethical considerations the
legal team faces, conflict of interest issues can be adequately and ethically dealt with
through the development and implementation of a system.33
There are eight sections of the South Carolina Rules of Professional Conduct
involving conflicts of interest, primarily involving how attorneys should handle conflicts
between current clients, conflicts between a current client and a former client, conflicts
between the lawyer’s own interest and those of a client, conflicts arising from business,
financial, and familial relationships with a client or a third party, conflicts arising from a
lawyer’s relationship with a client during previous employment with another organization
or office, and conflicts arising from consultations with prospective clients. The latter is a
new provision in the rules, adopted effective October 1, 2005. A lawyer or law firm is
now conflicted out of future representation by a consultation only in limited
circumstances.
Lawyers now have an answer to the common question of when a prospect
becomes a client to the extent ethical obligations kick in. Rule 1.18 is a brand new
provision that sets forth the circumstances under which the duties of confidentiality and
33
SCACR Rules 1.7 Conflict of Interest: General Rule; Rule 1.8 Conflict of Interest: Prohibited
Transactions; Rule 1.9 Conflict of Interest: Former Client; 1.10 Imputed Disqualification: General Rule;
and Rule 1.11 Successive Government and Private Employment
conflict avoidance are owed to a person who consults with your firm but does not retain
you. If you discuss the possibility of forming a lawyer-client relationship with someone
and there is a reasonable expectation that the firm is likely to form that relationship, that
person becomes a “prospective client.” The firm may not use or reveal information
learned in the consultation even if the prospective client does not ultimately become
your client (unless permitted under other provisions of the rules). In addition, the firm
cannot undertake to represent another client in the same or substantially related matter
if that client’s interests are materially adverse to a prospective client if the firm has
received “disqualifying information” in the consultation with the prospective client.
Disqualifying information is information that could be significantly harmful to the
prospective client in connection with the case. This conflict can be waived by the client
and prospective client with informed consent, confirmed in writing. Your firm is also
prevented from undertaking or continuing to represent the client unless (1) you
reasonably tried to avoid obtaining more information than was necessary to decide
whether or not to represent the prospective client, (2) you and your lawyer are timely
screened and do not share in the fee, and (3) your lawyer gives prompt, written notice to
the prospective client of your firm’s representation of the other client.
Although some conflicts of interest are obvious, more often than not, determining
what is and what is not a conflict of interest can be complicated and confusing. The
Rules of Professional Conduct are written with attorneys in mind, and even then cannot
anticipate every situation that may arise. Paralegals may find helpful additional
guidance provided in the NFPA Code of Ethics.
Not all situations involving clients and personal or business relationships present
conflicts of interest. Additionally, not every instance of dual representation of clients
with adverse interests is a conflict. Finally, while some conflicts of interest are not
waivable and are never acceptable, in some circumstances an attorney can continue
with the representation if the client gives his or her informed consent.
Every situation that raises a question of a potential conflict of interest must be
taken seriously and be dealt with appropriately. It is important for the legal assistant to
bring such concerns to the attention of the responsible attorney and allow that attorney
to make the final decision with regard to representation of the client and the extent of
the legal assistant’s participation in that representation. The lawyer should address
conflicts in written policies outlining the appropriate use of the conflicts check system
and the procedure for dealing with conflicts when they arise. The Comments to Rule
1.7 indicate that the lawyer “should adopt reasonable procedures appropriate for the
size and type of firm and practice, to determine in both litigation and non-litigation
matters the parties and issues involved and to determine whether there are actual or
potential conflicts of interest.” Those reasonable and appropriate procedures are a
system of conflicts checking.
The key to an effective system for recognizing and avoiding conflicts of interest is
accurate record keeping. You must have a record of present and former clients of the
firm. Attorneys and paralegals who have made lateral transfers from other firms should
supplement this record with the names of previous clients and employers. Ideally, such
a record should be kept electronically in a searchable database containing a list of all
active and former clients of each member of the legal team and all parties to those
clients’ legal matters. Finally, a record should be kept of all individuals and companies
that have consulted with the attorney or firm but did not actually become clients.
Pinpointing when an attorney/client relationship begins for conflict of interest purposes
can be difficult. Legal professionals should err on the side of caution and consider mere
consultations sufficient to give rise to an attorney/client relationship, however limited.
A conflicts check is, of course, required at the outset of the representation.
However, as new parties are discovered and associating with the case, ongoing
conflicts checks must be conducted.
Once a conflict of interest arises, a decision must be made as to whether the
client can waive it and allow the representation to continue. Some conflicts are
unavoidable and the lawyer cannot undertake or continue the representation even if the
client so desires. Even before a lawyer can seek the consent of a client who is the
subject of a conflict of interest, the lawyer must reasonably believe the conflict will not
adversely affect the representation.34 The Comments clarify this reasonable belief
standard, stating that “when a disinterested lawyer would conclude that the client should
not agree to the representation under the circumstances, the lawyer involved cannot
properly ask for such agreement or provide representation on the basis of the client's
consent.”
Once the lawyer determines that he or she can reasonably continue without the
conflict affecting the representation, the client must give informed consent. Such
consultation should include a thorough discussion of the nature of the conflict and the
risks and advantages of continuing with the representation. It must be made clear to
the client that the choice is his whether or not to proceed with the representation.
Further, the client should be given assurances that the lawyer will take all reasonable
steps necessary to protect the client’s interests should the client choose to terminate the
representation.35 A legal assistant should be present during this discussion. After
being given the opportunity to have any questions answered, it is usually required that
the client reduce his waiver to writing.
The term ‘screening’ applies in situations where a conflict of interest is identified
with regard to an individual member of a legal team. A screen or wall is erected around
that individual, preventing his access to that particular file and preventing those handling
that matter from communicating with that individual regarding the client or the case.
There is disagreement among the courts around the country with regard to the
application of the imputed disqualification rules to nonlawyer employees. Some courts
have held that a firm who hires a nonlawyer with a conflict of interest based on former
employment may avoid disqualification by imposing an adequate screen. Other courts
34Rule
1.7(a)(1) and (b)(1).
With regard to the lawyer’s obligations upon termination of the representation, please refer to Rule
1.16.
35
disagree, holding that the standard for disqualification of lawyers applies equally to
disqualification imputed from nonlawyer employees. In those jurisdictions, the hiring
firm would be disqualified if the nonlawyer had actual knowledge of confidential
information of the client of the former employer, regardless of attempts to erect a
screen.
Our Supreme Court has not yet addressed the issue of screening nonlawyers
who have conflicts of interest to avoid firm disqualification. However, the issue was
addressed in an Ethics Advisory Opinion in 1991 which states that, with adequate
screening, a firm is not disqualified when it hires a nonlawyer whose former employment
creates a conflict of interest, even if the nonlawyer had access to confidential
information, so long as the hiring firm takes reasonable precautions to ensure
compliance with Rule 1.6 (Confidentiality of Information) and Rule 5.3 (Responsibilities
Regarding Nonlawyer Assistants).36
As with all ethical issues, having adequate, written policies and procedures for
handling conflicts of interest is the most effective method of preventing situations that
result in grievances and lawsuits. Paralegals and other nonlawyer employees must be
familiar with and educated about these rules both to prevent personal conflicts of
interest and to assist the attorney in developing a system of conflicts checks.
36SC
Bar Ethics Adv. Op. #91-12. See also, SC Bar Ethics Adv. Op. # 93-29.