CORPORATE LEGAL ETHICS OUTLINE – Prof. Ventry – Fall 2009
The Corporation and Its Lawyers
The Lawyer’s Role:
Ventry: License to practice law is not a license to abandon innate moral compass
i. When you approach the exam, use a wider view than just the legal rules
ii. On Exam: Look at legal, moral, ethical, and practical consequences
ABA Model Rules, Preamble:
i. “The lawyer is:
1. (i) a representative of clients;
2. (ii) an officer of the court; and
3. (iii) a public citizen with a special responsibility for the quality of justice”
ii. This standard is fairly “mushy”
iii. You would need to incorporate all of these rules into your practice
Other roles an attorney can serve (ABA):
i. Advisor – lawyer provides a client with an informed understanding of the client's legal rights and obligations and explains their practical implications
1. MR 2.1
a. “A lawyer shall exercise independent professional judgment and render candid advice”
b. “In rendering advice, a lawyer may refer not only to law, but to moral, economic, social and political factors”
ii. Advocate – lawyer zealously asserts the client's position under the rules of the adversary system
iii. Negotiator – lawyer seeks a result advantageous to the client but consistent with requirements of honest dealings with others.
iv. Evaluator – lawyer acts by examining a client's legal affairs and reporting about them to the client or to others.
Ventry’s list of lawyer roles
i. All possible approaches you can use on the exam for a particular problem
1. Independent professional (above)
2. Zealous advocate (see p. 2)
3. Hired Gun/Neutral Partisan (see p. 3)
4. Counselor (see p. 5)
5. Cop/Gatekeeper (see p. 35-36)
6. Entrepreneur (see p. 36)
7. Compliance Counselor (see p. 43)
Lawyer Misconduct – MR 8.4
i. It is professional misconduct for a lawyer to:
1. Violate or attempt to violate the MRs knowingly assist or induce another to do so, or do so through the acts of another;
2. Commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects;
3. Engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
4. Engage in conduct that is prejudicial to the administration of justice;
5. State or imply an ability to influence improperly a gov’t agency or official or to achieve results by means that violate the MRs or other law
6. Knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law
Challenges for the Corporate Lawyer
Corporate Lawyers vs. Other Lawyers
i. Corporate attorneys are affected by corporate culture
1. Corp attys work within massive organizations and sometimes take on the persona of the corporation
ii. If the atty severs ties with the corporation, they are out of the job
1. Strong pressure on corporate attorneys to conform their opinions to whatever the corporation wants to hear
a. Temptation for lawyer to violate ethical rules as legal services become more client based
iii. Corporate atty’s client is the corp itself, not its officers or employees
iv. The rise of corporate legal departments
1. The corporate atty probably has only one employer, the corp
2. The atty faces a likelihood of job loss if they don’t go along with the corporation’s views; reduces atty independence
a. Regular atty will have more clients, so easier to maintain professional independence
v. Corporate attys largely work outside the courtroom and behind closed doors
1. Plan transactions, advise clients on regulatory compliance, and interact with government agencies
vi. Fragmented knowledge and accountability
1. Corp atty may only have a slice of the total information
a. But you may be held accountable for knowing everything
2. May be difficult to determine who is actually at fault and who is not
a. This is unique to corporate practice
b. This makes it more difficult to render legal advice
3. Atty may need to investigate matters internally to obtain complete information (see p. 27 – internal investigations)
a. Otherwise the corporate atty generally only communicates with upper management who may be giving only one side of the story
vii. Rendering legal advice as well as business advice
1. When atty gave advice, was he wearing the legal hat or the business hat?
viii. Law firms and clients as global actors
1. Everyone is becoming increasingly a global actor – must look at the law in multiple different jxs and the ethical complications in different jxs; there is no one common transnational set of ethical rules
ix. Multiple, conflicting ethical rules
x. Possibility of criminal prosecutions and malpractice
Zealous Advocacy
i. Ideal: Atty’s job not to win cases, but to do justice and to see that justice is done
ii. Zealous advocacy – traditionally tempered by a tribunal (court)
1. Tribunal:
a. Moderates the potentially adverse effects of partisanship
b. Ensures compliance with the spirit of the law, not just the letter of the law
c. Ensures disclosure of all relevant information
2. When you have a tribunal, less concerned about voluntary disclosure, someone is looking over your shoulder basically
3. Corp atty DOES NOT operate with these checks and balances in place
a. Ethical rules, particularly the Model Rules, were written with litigators in mind, not corporate attorneys
4. No one ensuring that corporate attys respect the law rather than simply manipulate it
a. Thus corporate attys fa
e behavior that we regard as legal is morally worse than some illegal behavior.
b. EX—Abandoning drowning friend (this is legally permissible under tort law – yet morally reprehensible) vs. jaywalking
iv. Criticism of Hired Gun and Corporate Setting
1. Gordon criticizes Hired Gun model as applied to corporate attys
a. If you advocate the Hired Gun model, advocate the right way
2. Benefits of Adversarial system not fully applicable to Corp setting
a. Legal advice outside adversary setting is not subject to checks & balances of litigation; Corporate law ordinarily doesn’t have:
i. Open and public proceedings
ii. Impartial tribunal
iii. Adversary parties to constrain excessive claims
iv. Compelled discovery of inconvenient facts
v. Compelled testimony
b. In criminal setting:
i. Zealous advocacy here serves social interests of keeping prosecution on its toes and preventing overreaching
c. In the corporate setting:
i. No public purpose in permitting a corporate atty help client take an adversarial stance toward legal and regulatory reqs based on a scintilla of an argument that it’s permissible (especially with repeat players)
3. Autonomy argument not applicable to Corp setting
a. Furthering the autonomy of a corporation is not equivalent to furthering the autonomy of an individual
b. Furthering corporate autonomy is furthering its economic interests
i. Furthering an individual’s autonomy is furthering that individual's constitutional rights (e.g., freedom of speech)
ii. We do not give corps natural, inalienable rights like we do individuals
