After a lay-off from a position at a prestigious law firm, Sally Sullivan, a woman aged fifty-five years old and with twenty-five years of paralegal experience, moves from New York City to Miami, Florida in an attempt to reinvent herself. While she enjoys the beautiful beaches and vibrant nightlight of Miami, Sally soon concludes that she needs to obtain a job. However, after sending out nearly one hundred resumes, Sally secures an interview for a position as a paralegal at the Law Offices of James Varney and Associates, a solo attorney who predominately does personal injury work. At the interview, Sally meets James, a former law clerk who worked for a series of federal judges only possesses one year of private practice. Based on her extensive experience and a terrific interview, James hires Sally.

After several weeks, James calls Sally into his office and tells her that she has been doing great work and he would like her to take on more responsibilities and a higher salary. Specifically, James tells Sally that he trusts her and would like Sally to respond to any discovery requests that come in from opposing counsel in any pending cases. Because James is time-pressed, he does not review Sally's discovery requests on a regular basis.

After a few more weeks, James asks, and Sally agrees to conduct initial client interviews with potential clients. At these initial client interviews, Sally does not inform the potential clients that she is a paralegal. Instead, she vaguely describes herself as James' associate. During one of these initial client interviews, Sally meets Molly O'Leary, a nurse who suffered back injuries in a slip-and-fall at a Miami Beach nightclub. After Sally tells Molly that she potentially has a million-dollar case against the night-club, Sally and Molly quickly develop rapport and Molly decides to enter into an attorney-client relationship with the Law Offices of James Varney and Associates. Because James is out to lunch and because Sally does not want to lose what she views as a potentially profitable case, Sally hands Molly an engagement and fee agreement that Molly quickly and enthusiastically signs. The engagement and fee agreement states that the attorney shall only receive payment if the client receives a settlement or a jury verdict. The fee agreement established James' attorney at 33% of any jury verdict or settlement.

After James returns from lunch, Sally tells James that she retained a new client and provided James a summary of Molly's potential claim against the nightclub. While James is troubled that Sally told Molly that she had a "million-dollar case," he is also excited to Sally obtained a much-needed new client for his struggling firm. After making a few phone calls and conducting some initial discovery, James obtains a settlement offer for Molly's injuries from the nightclub's insurer for $250,000.00. Despite her initial shock at what she considers a low offer given her conversation with Sally, Molly accepts the offer, agrees to settle her case and receives a check for the amount of $167,500.

Recognizing that Sally's rapport with Molly played a central part in the retention of Molly, James believes that he should reward Sally with a share of the settlement monies received from the night club. Specifically, James writes Sally a check for $25,000 from the settlement monies and tells her that she did a terrific job with Sally's case.

After a few more months, Sally and James entered into a romantic relationship despite the fact that both had spouses. After that, James allowed Sally, even more, control over the affairs of the law firm. Specifically, James allows Sally access to the firm's checking accounts including the designated client accounts. One day, Sally dipped into the client funds to borrow a few thousand dollars for the down payment on a new car. While she intended to repay the monies, she never repays the money. Unfortunately, before she repays the money that she borrowed from the client checking accounts, regulators from the state bar conduct an audit of James' banking accounts and discover several suspicious transactions including Sally's activities. Due to irregularities in his checking account, the state regulators suspend James' law license for six months. Due to James' suspension, James closes down his law practice and terminates Sally.

Please identify any potential problems with Sally's behavior over the course of her employment at The Law Offices of James Varney and Associates. What are the possible legal ramifications, if any, of her behavior?