Paralegal Ethics: Are You Really Being Ethical?

Sarah, a white woman with short auburn hair, wears a black shirt with white flowers.By Sarah L. White

Every paralegal knows the four main ethical guidelines that govern our profession. They have been drilled into us with every paralegal class and continuing education seminar over the course of our careers. Most of us probably could recite them verbatim in our sleep, but just so we are clear, paralegals must not do any of the following:

1. Establish attorney-client relationships;

2. Represent a client in court;

3. Negotiate settlements; or

4. Give legal advice.

If we only adhere to the four main guidelines above, are we really being ethical? The answer is no, although those are the key steps in keeping you out of jail for the Unauthorized Practice of Law!

There is a multitude of other rules, opinions, and guidelines, both nationally and within North Carolina, with which we must comply just as our attorneys do. Failure to follow these could result in you losing your job or having any certifications you hold revoked, and, in some instances, your supervising attorney could be disciplined for your unethical behavior.

Below, we will examine a few lesser-known or overlooked ethics rules, opinions, and guidelines. These are from the North Carolina State Bar Rules of Professional Conduct, Formal Ethics Opinions, and Guidelines for Use of Paralegals in Rendering Legal Services.

Rule 1.1 Competence, Cmt. [8], and GUP 10  (Maintaining Competence)

Pursuant to Rule 1.1, “Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.” To maintain competence, Comment [8] further states that an attorney should stay informed regarding changes in the law, including technology relevant to their practice and attend continuing education courses. Likewise, as paralegals, we need to be proactive in maintaining our competency, by attending CPE or CLE courses (regardless of whether or not you are certified), getting involved with local or state paralegal organizations, and always referring to the North Carolina General Statutes (or other governing sources) when completing a task to ensure compliance with the rules. We should never be complacent. The law changes; technology changes. In order to be competent and efficient in our role as paralegals, we always should be ready to adapt to those changes.

Rule 4.4 Respect for Rights of Third Persons, 2009 FEO 1, and GUP 4  (Confidentiality and Metadata)

The days of producing everything hard copy via courier or snail mail have long passed as we have transitioned to a digital world, which brings with it new ethical considerations. This FEO requires reasonable care be used to prevent the disclosure of confidential information contained in metadata when sending electronic documents, and further states that one must refrain from searching for confidential information contained in the metadata upon receipt of electronic documents from other parties. Every electronic transmission (emails, Word documents, spreadsheets, presentations, etc.) contains metadata. The metadata provides a record of the document’s history – author, date created, date modified, track changes, notes, etc., which could contain confidential or privileged information. Two methods used to prevent potential disclosure of metadata include: 1) converting native documents to PDF, and 2) using a metadata scrubber prior to electronic transmission. PDFs generally contain less metadata than other documents, but you should still be mindful of notes in existing PDFs from the client.

Rule 1.5 Fees, 2019 FEO 5  (Cryptocurrency)

Attorneys are allowed to accept cryptocurrency for a flat fee case, as long as the fee is reasonable; however, they are prohibited from accepting cryptocurrency as a retainer or for deduction of future fees yet to be billed. I will be the first to admit that cryptocurrencies are not my forte, and I sincerely hope I outlive the day that they become the standardized form of payment! However, I know there are other paralegals out there already dealing with cryptocurrency in one form or another. According to an article published by CNBC on June 3, 2022, there are over 19,000 different types of cryptocurrencies in existence. Though many of them will likely collapse, “scores” of others will remain. As such, those of you involved with client billing or trust accounts should be aware of relevant ethical guidelines regarding cryptocurrency.

Rule 5.4 Professional Independence of a Lawyer, RPC 147, 2005 FEO 6, and GUP 7 (Salary and Bonuses)

A paralegal’s quality and quantity of work may be used in determining salary and bonuses, but neither may be based upon a percentage of the income generated from the paralegal’s caseload. Although fee sharing with a nonlawyer is generally prohibited, there are some exceptions. For example, nonlawyers may legally represent disability claimants before the Social Security Administration and be awarded fees for said representation. If the nonlawyer is a paralegal employed by a firm, then it is permissible to base the paralegal’s salary or bonuses on the income generated by the SSA representation.

Hopefully, we all are adhering to the ethical rules and guidelines, but let’s face it – none of us are perfect. As part of the Paralegal Division Ethics Committee, our goal is to deliver ethical content that you may not know, may need a refresher on, or which really makes you stop and ponder. If there is a particular area or topic you are interested in learning more about on the ethical front, please reach out to us.

Sarah L. White, ACP, NCCP is a senior litigation paralegal with Ragsdale Liggett PLLC. She focuses in the areas of civil litigation and insurance defense, handling cases in all of North Carolina’s state and federal trial court divisions, including appellate courts. She also manages the firm’s eDiscovery platform and continuing education courses with the North Carolina Department of Insurance. Sarah holds a B.S. in Criminal Justice and Post-Baccalaureate Certificate in Paralegal Studies and advanced certifications from NALA and the North Carolina State Bar. She was recipient of the North Carolina Bar Association’s 2018 Distinguished Paralegal Award. Her professional involvement includes serving as Chair of the North Carolina State Bar Paralegal Certification Committee (2017-present) and Item Writer for the Committee (2014-2016); NCBA Paralegal Division Treasurer (2022-present), Ethics Committee Member (2022-present), Bylaws Committee Co-chair (2021-present), and Council Member (2019-2022); and member of the NCADA Paralegal Division and NALA.

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