4.3 Conflicts of Interest

Rule 1.6 of the 2022 NFPA Code states the duty in full: a paralegal shall avoid conflicts of interest and shall disclose any possible conflict to the employer or client, as well as to prospective employers or clients. The Rule is not only about the file on your desk today. It is about the file you worked last year, the firm you are about to join, and the cousin who adjusts claims at the insurer on the other side.

The Code defines a conflict of interest as a situation in which a person has a duty to more than one person or organization but cannot do justice to the actual or potentially adverse interests of both. EC-1.6(a) translates that into a loyalty command: act within the bounds of the law, solely for the benefit of the client, free of compromising influences and loyalties. Neither the paralegal’s personal or business interests, nor those of other clients or third persons, should compromise professional judgment and loyalty to the client.

The attorney-facing counterparts are ABA Model Rules 1.7 through 1.12 (current-client conflicts, former-client conflicts, imputation, and former-government-officer issues) plus Rule 1.10 on imputed firm conflicts. The paralegal is an agent. An undisclosed prior-matter conflict is attributed to the lawyer under Rule 5.3.

Immediate disclosure — do not diagnose it yourself

EC-1.6(b) is the first move on almost every PCCE conflict item: a paralegal should immediately disclose any potential conflict to the supervising attorney. The paralegal does not decide that the conflict is “probably waivable,” does not call the former client for a hallway consent, and does not start drafting the complaint “just until someone looks at it.” Disclosure is immediate. Work on the matter stops until the attorney (and, where required, the client) has addressed it.

Two recurring sources:

EC-1.6(c) — prior assignments, projects, or employment. Last year’s defense file at Firm A is a conflict when Firm B now wants you on the plaintiff’s side of the same wreck, the same contract, or a substantially related matter. The duty runs to present and past employers and clients. A lateral hire who “does not remember the file very well” still discloses. Memory is not the test; the prior assignment is.

EC-1.6(d) — family relationships and personal and business interests. The cousin is the claims adjuster. The spouse works in-house at the defendant. The paralegal owns stock in the opponent. The paralegal is dating the opposing expert. These are not “personal life, not ethics.” They are EC-1.6(d) conflicts. Disclose immediately. Do not work the file. Do not “just handle the medical chronology” as if a slice of the case were conflict-free.

The conflict database and what you may reveal

EC-1.6(e) requires the paralegal to create and maintain an effective database that identifies clients, matters, and parties with which the paralegal has worked, if permitted by the employer, attorney-client, or organization. Firms run a conflict check on new matters and new hires; the Code defines that check as the process by which attorneys ensure representation of one client is not adverse to another. Your personal list is what makes a lateral move or a freelance docket honest. If a former employer forbids you to export a client list, you still disclose from memory the names and matter identities you actually worked, and you tell the new firm you cannot produce a complete extract.

EC-1.6(f) is the confidentiality brake on that process: reveal only sufficient non-confidential information about a client or former client to reasonably ascertain whether a conflict exists. The Code defines non-confidential information as generally the name of the client and the identity of the matter. That is the conflict-check packet. It is not the strategy memo, the settlement authority, the medical diagnosis, or the “here is why we will win” email. Dumping a former client’s file into the new firm’s system in the name of a thorough check is a Rule 1.5 violation dressed up as diligence.

Do not work the matter; then, maybe, a wall

EC-1.6(g) is a hard stop: a paralegal shall not participate in or conduct work on any matter where a conflict of interest has been identified. “I will only Bates-stamp” is still participation. “I will only listen in on the call” is still participation.

EC-1.6(h) is the continuation path, not a substitute for (g). In matters where a conflict has been identified and the client has provided written consent to continued representation, the paralegal shall fully comply with the implementation and maintenance of an Ethical Wall. Written consent comes first. A wall without consent is not what EC-1.6(h) describes. Consent without a wall is not compliance either.

The 2022 Code’s own definition of an Ethical Wall — and NFPA’s publication “The Ethical Wall and Its Application to Paralegals” — lists four elements. Memorize all four:

1. Prohibit the paralegal from having any connection with the matter.
2. Ban discussions with or the transfer of documents to or from the paralegal that relate to the matter.
3. Restrict access to matter-related files (paper and electronic).
4. Educate all members of the firm, corporation, or entity about the separation of the paralegal, organizationally and, when needed, physically.

A sticky note on a door, a verbal “don’t look at that cabinet,” or the conflicted paralegal editing a brief “but not reading email” is not a wall. The screened person does not sneak a peek “to help the team.” Everyone else does not drop by to recap the mediation. Information technology (IT) removes the person’s credentials from the matter workspace. A firm-wide email or training tells colleagues not to discuss the matter with the screened paralegal.

Imputed conflicts and lateral-hire screens

Imputation is the idea that one person’s conflict can be treated as the firm’s conflict. For lawyers, ABA Model Rule 1.10 is the usual citation: a lawyer’s conflict is often imputed to colleagues in the same firm. For nonlawyer laterals, many jurisdictions and NFPA’s Ethical Wall monograph treat a timely, effective screen as the way to avoid disqualifying the entire new firm when the incoming paralegal holds a former client’s confidences. The exam-safe sequence for a lateral is:

• On the offer / first day, disclose prior clients, matters, and parties (Rule 1.6, EC-1.6(b), (c), (e), (f)).
• The new firm runs its conflict check.
• If the new firm is adverse to a former client on the same or a substantially related matter, the paralegal does not work that matter (EC-1.6(g)).
• If representation continues with the required written consent and a wall is the chosen protection, implement all four wall elements before the person is on the system (EC-1.6(h)).
• Do not brief the new team on the former client’s strategy “so they can evaluate the conflict.” That is using a confidence against the former client (EC-1.5(b)) and is the opposite of a screen.

Freelance and virtual paralegals have the same Rule 1.6 duties toward every attorney-client who retains them. A contract paralegal who drafted discovery for Defendant A last month does not accept a contract from Plaintiff A’s new counsel this month without disclosure and a conflict analysis.

Worked path — the cousin adjuster

Jordan is assigned a new auto file. At the first status meeting Jordan realizes the named adjuster is a cousin. EC-1.6(d) is triggered. Jordan immediately tells the supervising attorney (EC-1.6(b)), gives only the cousin’s name and role — not the client’s medical chronology — and stops working the file (EC-1.6(g)). The attorney decides whether the firm can continue, whether the client must give written consent, and whether Jordan must be walled off. Jordan does not call the cousin “to give a heads-up,” does not stay on the file as “just the organizer,” and does not treat family loyalty as a private matter the firm need not know.