Editor’s Note: In the following post, A. Swetha Meenal & Joysheel Shrivastava* explore the ethics and morality of corporate lawyers. They point out that the metric by which success in the corporate world is evaluated itself causes the line between ambition and morality to disappear. While this reduces lawyers to inherently amoral and apathetic professionals, it is questionable whether this apathy could subject them or the legal institution to moral judgement.
Introduction
“Where were the lawyers and how could they let this happen?”[1]
Credited to the woke society, this question presents a critical rhetoric towards the legal community in the capitalist setting, whose ambition to stay atop the competent firms is often misinterpreted by the society as greed and lack of social values or responsibility; that their actions are motivated by toxic materialism, at the cost of economic and social welfare. In support, there is ample evidence pointing to the insatiable race amongst law firms for wealth, caused by the criteria and manner of reorganization of law-firms.[2] The concerns of scholars and academicians with the present system is that, while not initially corrupt, the lawyers eventually adopt the moral views of the clients they represent, as their own.[3] They then pass on chances to nourish the disparities in the system, despite holding an influential position over the corporate bureaucrats that they represent.[4] If such behaviour could be taken for loyalty that is exhibited towards their clients, then their ethics and obedience towards the institution are impeccable, as expected by the system. However, assuming the contrary would mean that the lawyers act without regard to the social costs of their doing.
This article is structured in the following way. First, it sets out the metric of assessment (used in competitive benchmarking) of the corporate legal community, i.e., corporate law firms and commercial lawyers. Second, in a conscious attempt to not wander deep into the philosophy of ethics, it discusses the most pragmatic ethical expectations that the society has of the community. Third, it argues how this metric chisels out apathy as an indispensable characteristic feature of the leader striving to maintain its position on top of the hierarchy, by alluding to some controversial scams and their lawyers.
Metric for Assessment
Despite being in what many may call ‘rude health’ owing to economic uncertainties and turbulences in this globalized market, the legal field is robust and continuously growing; there is ample demand for their services, and sufficient supply. However, the competition is more brutal than ever; corporate lawyers and law firms are competing with one another, attempting to grab the most elite clients and the best deals.
In an attempt to put forth data in a speedy and efficient manner, and to know who is ‘on top of the game’, it is common practice for law firms to be ranked in a hierarchy. This can be done on varied bases (“the metric”), such as deal values, deal counts, size (number of associates), market share, market profile (number of recommendations from clients and spontaneous mentions). A perusal of popular rankings such as ‘The Global 100’, ‘The UK 200: The Top 100’, ‘The Legal 500’, etc., wherein law firms are ranked in order of the revenue they generate for that particular year, indicates that it is the revenue-based criteria that tend to dominate all other criterion of ranking. The higher the deal value and the deal count, the greater the profits. Consequently, the firm has a greater profile in the market, which subsequently increases the firm’s chances of drawing in a higher profile and elite clientele, enabling them to draw in millions of pounds a year.
Jonathan Chang’s profile as a lawyer is eminent because he was the General Counsel for Tesla; Harish Salve is highly sought after because he has taken up a number of high profile cases such as representing Vodafone in the USD 2.5 bn tax dispute with the Indian Government; White & Case asserts its dominance as a leading global law firm, because it represents acquisitions that are conducive to the firm bagging the deal of the year awards. Similarly, Khaitan & Co. led the sale of Flipkart to Walmart – a deal valued at USD 16 bn. Trilegal advised the Louvre Hotel Groups, the second largest entity in the hospitality industry in all of Europe, in acquiring a major stake in the Sarovar Hotels in India.
Ultimately, a firm’s value is dependent on who they represent, which deals they close, and most importantly, the revenue they generate – which inevitably depends on the first two factors. A part of the reason can be attributed to the nature of indoctrination undertaken at law-school, which has been characterized by Duncan Kennedy as a “training for hierarchy.” He argues that with its profile of hired professors or the law firm placement/internship tie-ups that are proudly displayed on their websites, law schools wield frightening instruments of judgment by sending the message that names, rankings and numbers matter the most. A certain precedence for admiration and condescension is set. Thus, graduates learn that the entire worth of a law firm/corporate lawyer is restricted to their net worth and clientele, and proceed to replicate the model.
What is the Standard Morality Expected of a Corporate Lawyer?
The morality of lawyers can be said to be characterized by two diametrically opposing views. According to the first view, lawyers have been placed on a higher pedestal, arguing that they are engaged in a noble profession, akin to doctors and priests, and thus must be exempt from public scrutiny and judgment. The actions of this ‘intellectual elite’ are presumed to have a sacrosanct touch to them, which are above the understanding of the common public; this indicates that the lawyers are premised to be functioning from a space of a ‘higher morality’.[5]
The second view has accepted that lawyers will invariably have to act in an immoral fashion and that they are inherently amoral; they are indifferent to popular notions of societal morality. It is imperative to distinguish between institutional morality and personal morality – it follows that morality and its substance depends on the field of its application. This resonates, in part, with Aristotle’s view that virtue is what makes a thing function well or perform its essential function.[6]
We can also lay reliance on David Luban’s theory of “four-fold root of sufficient reasoning”,[7] which justifies an action when the actor’s obligations require it (i.e. role act and role obligation). Therefore, for a lawyer to be a good person, the individual must be true to the duties expected of them, i.e., be a good lawyer. Accordingly, to be a virtuous/good person, a corporate lawyer must bear in mind their client’s best interests, respect the attorney-client relationship, live up to the fiduciary duty they owe, and uphold the confidentiality expected of them.
At this juncture, this article answers the question raised: in this context of a firm or a lawyer chasing money, and demonstrating an apathetic behavior and an indifference to a common-sense notion of public morality, what can be said of their responsibility towards society in general?
Ambition v. Apathy
At the outset, it must be understood that law firms, by virtue of the nature of their profession, assist and counsel corporate firms by working hand-in-glove with them to advise them on business transactions, taxation, hiring, regulation, etc. Further, lawyers have a duty to defend; and denying personal assistance to a client based on their moral worth is against the ethos of the profession. But it has been acknowledged that acceptance of this duty does not imply acceptance of its moral legitimacy.[8]
In this context, the significance of controversies such as Enron, Tyco, Satyam scam (the Indian Enron), the 2G Spectrum scam, the Indian stock market scam of ‘92, etc., is that they present an opportunity to critically assess the legal profession.[9]
In the case of Enron, touted as one of the biggest corporate corruption and accounting scandals of the century, of the 50 law firms that were initially subpoenaed, [10] the involvement of Vinson & Elkins drew special attention of the legal community. Allegations about its involvement in the scandal were raised, highlighting its role in the preparation of documents and participation in several negotiations with the knowledge that these would inflate Enron’s earnings and facilitate the fabrication of false reports.[11] While the firm did not deny the allegations raised, it resorted to the defense of non-availability of concrete evidence in proof of the allegations, and was ultimately acquitted. [12]
In the case of Tyco, Boies, Schiller & Flexner LLP’s, which was one of Tyco’s longstanding outside counsel, was made to investigate its own client’s scandal. The firm’s motive to continue its work with Tyco made it file a report vindicating the company’s wrong doing and other fraudulent allegations. Tyco was later convicted of one of the biggest corporate scandals of the 21st century.
In this context, should a lawyer who has strong reasons to suspect that their corporate client is engaged in an illegal or fraudulent conduct be obligated to probe further into the motive of the conduct in question? Or should they continue providing “frank and fearless”[13] advice to their clients, regardless of their knowledge that the client already has, or may engage in conduct that might result in a significant loss to another financial entity?
Holding them to the former standard of conduct would impose moral duties over and above their professional contours, risking their attorney-client privilege, conveying their reluctance to take risks and would result in loss of high-profile clients.[14] In case of the latter standard, if the provision of advice to their clients, to further their interests, is done within the confines of institutional morality as explained in the second view, then involvement of the lawyers is not sufficient to tag them in the list of participants of any scandal. Since the legal institution functions within the second view, most lawyers resort to the statement “we did nothing wrong”[15] to disprove the strong allegations raised by the prosecution; for if lawyers perform what is expected of them procedurally, the standards of public morality and conscience cannot be held against them.
In India, although there is not one particular incident where the lawyers participated hand in glove with their clients in the commission of white-collar crimes, the choices of the lawyers in choosing their clients are worth exploring.
The Satyam scam, or the Indian Enron as it is commonly referred to, with damages extending to over INR 7,000 crores, called the quality of the auditing service rendered by PWC into question. Amidst a confession from the chairman and suspicions leveled on PWC for its non-compliance with the procedural norms, J Sagar Associates came to PWC’s defense. In fact, the SAT’s order setting aside SEBI’s order on the quality of auditing, on the question of jurisdiction is proudly displayed on Argus Partners’ website, as a proof of their competence in handling white collar crimes.
The decade-long 2G spectrum scandal in India, whose damages were estimated at INR 30,000 crores, culminated in the acquittal of all those involved. And the lawyers, including Mr. Ram Jethmalani, Vijay Aggarwal, Siddharth Luthra, who represented the accused, remain to be the most revered in India, despite the surrounding controversies. Mr. Jethmalani had a reputation, and was widely revered, for defending white-collars criminals like Ketan Parekh for his role in the 2001 stock market crash, or Harshad Mehta of the 1992 stock market scam (with damages amounting to 4,000 crores) despite Mehta’s public confession of having paid a sum of INR 1 crore to the then Prime Minister to evade charges. In fact, the 2G spectrum case hiked the reputation and net-worth of Mr. Vijay Aggarwal, and has only brought him more lucrative, controversial / challenging cases since
Such choices continue to award lawyers with the power to increase their remuneration for appearance and counsel, for these are sheer demonstrations of their competence and fearlessness. The lawyers presume that an acquittal of some of the most dangerous or challenging criminals is a testament to their skill and capabilities, and commit to defending them despite the fact that the economic damages of each of these crimes have crossed thousands of crores, and had had a bearing on the lives of middle-low income groups of the country.
Concluding Remarks
With this demonstrated apathy, the criticism is that the metricinherently causes the line between ambition (or “greed” as it is commonly interpreted by the non-lawyers) and morality to disappear. However, on admission that this does reduce lawyers to apathetic professionals, whether this apathy could subject them or the legal institution to moral judgement, wholly based on the notion of philosophical behaviorism, is questionable.
In this regard, this article subscribes to David Luban’s theory and supports the second view presented: role act and role obligations ought to be justified for as long as the institution or the role demands it; to qualify as a good lawyer, the lawyer is expected to bear an ethical responsibility vis-à-vis their client, and most importantly, the institution. Thus, the standard of ethics applicable to the lawyer is and ought to be different from that applicable to a layperson.
However, there are acceptable limits to allowing the metric to guide one’s professional moral compass. When observed within the boundaries of strict legal morality, as a means to assist in the process of justice, greed or ambition could perhaps be viewed as the engine that maximizing lawyer’s net worth, competence and skill. If it is this factor that ultimately motivates such choices, then one could also argue that it ensures a balance (of fair and adequate representation) within the legal institution itself, for as long as the perceivable difference between institutional morality and immorality is acknowledged. Ensuring this balance is the sole responsibility of the professionals towards society.
A. Swetha Meenal is an Advocate at the Madras High Court. Joysheel Shrivastava is Law Clerk to Justice Indu Malhotra of the Supreme Court of India. The views expressed are personal. We would like to thank the authors for contributing to our Blog.
[1] Jill E. Fisch & Kenneth M. Rosen, Is there a Role for Lawyers in Preventing Future Enrons?, 48 Villenova Law Review1097, 1098 (2003).
[2] Lisa G. Lerman, The Slippery Slope from Ambition to Greed to Dishonesty: Lawyers, Money, and Professional Integrity, 30 Hofstra Law Review 879 (2002).
[3] Robert L. Nelson, Ideology, Practice, and Professional Autonomy: Social Values and Client Relationships in the Large Law Firm, 37 Stanford Law Review 503 (1985).
[4] Thomas L. Shaffer, Jews, Christians, Lawyers, and Money, 25 Vermont Law Review 451 (2001).
[5] See Indian Medical Association v. V. P. Shantha, AIR 1996 SC 550.
[6] Aristotle, Nichomachean Ethics.
[7] David Luban, Lawyers and Justice: An Ethical Study, 131-32 (1988).
[8] H.L.A. hart, The Concept of law (1994).
[9] Eli Wald, Lawyers and Corporate Scandals, 7 Legal Ethics 54 (2004).
[10] Gary Young, 50 Law Firms Subpoenaed in Enron Bankruptcy, 26 The National Law Journal 29 (2003).
[11] Roger C. Cramton, Enron and the Corporate Lawyer: A Primer on Legal and Ethical Issues, Cornell Law Faculty Publications. Paper 1049. (2002)
[12] See In re Enron Corp. Sec. Derivative & ERISA Litig., 235 F. Supp. 2d 549, 613 (S.D. Tex. 2002).
[13] Suzanne Le Mire & Christine Parker, Keeping it In-House: Ethics in the Relationship between Large Law Firm Lawyers and their Corporate Clients through the Eyes of In- House Counsel, 11 Legal Ethics 201, 224 (2008).
[14] ABA Task Force on Corporate Responsibility, Preliminary Report of the American Bar Association Task Force on Corporate Responsibility, 58 Business Law 189, 208 (2002).
[15] Touted as one of the most common evasion tactic relied upon by the lawyers when alleged with professional misconduct, and violation of ABA’s ethical code of conduct. See, Report of the American Bar Association Task Force on Corporate Responsibility, (2003).
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