Ethical Dilemmas of Corporate Lawyering: Lessons from the UK Solicitors Regulatory Authority (SRA) Standards and Regulations

 

Ethical Dilemmas of Corporate Lawyering:

Lessons from the UK Solicitors Regulatory Authority (SRA) Standards and Regulations

 

M Jashim Ali Chowdhury

Assistant Professor of Law, University of Chittagong & Ph.D. Candidate, King’s College London

Published in SCLS Law Review Vol. 4. No.1 [Jan. 2021] pp. 1-7. Available online: https://sclsbd.org/scls-law-review-vol-4-issue-1/

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Ethical Dilemmas of Corporate Lawyering:

Lessons from the UK Solicitors Regulatory Authority (SRA) Standards and Regulations

Abstract

Ethical considerations of lawyering are not always straightforward. There are justifiable reasons why a lawyer must not be blamed for choosing his case and clients and arguing his client’s case irrespective of whether he personally agrees with the client’s argument. Fair administration of civil and criminal justice requires every side of the argument to be heard and everybody to be well represented. But what about a Corporate Lawyer whose clients usually have the influence of money, power, and links that may “buy” them justice? This paper argues that lawyering justification for regular civil and criminal practice may not apply to corporate practice. Still, corporate lawyering must be guided by a rather enhanced sense of professional ethics. Taking the United Kingdom Solicitor Regulatory Authority’s Standards and Regulations as the case study, this paper argues that due to the absence of an enhanced sense of ethics among the corporate lawyers; regulatory bodies are less likely to be successful in ensuring professional ethics in this area of money speaking the loudest. 

 

1. Introduction

Has corporate lawyering lost its ethical base? The conventional wisdom of society seems to suggest that it actually has.[1] The legal environment of corporate lawyering is no doubt different from the conventional ways of representing ordinary civil or criminal law clients. Based on the nature of their work and their clients’ contribution to society, corporate lawyers may have some serious arguments to make. I hope to touch upon some of those arguments in the next part (Part 2). By the end of that part, however, it could be seen that contextual differences of corporate lawyering from the traditional lawyering do not absolve it from ethics and morality altogether. While the ethical standards and accountability requirements applicable to corporate lawyering may be different from the regular civil and criminal law practices, the questions of professional ethics, collective morality, and accountability are always there. The third part of the paper would briefly introduce some doctrinal insights into the conception of lawyering ethics. Part four would consider the United Kingdom Solicitor Regulatory Authority’s Code of Conduct for the lawyers. This part will show the problems that emerge from a purely regulatory and legalistic approach to ethics implementation. Two field studies referred in the concluding part of this paper show that absent the genuine will of the professional leaders, law firms, and lawyers themselves, professional ethics are particularly hard to achieve. This is truer in the world of corporate legal practice, where money speaks more loudly.

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2. What differentiates Corporate Lawyering from regular Civil-Criminal Lawyering?

Lawyers are given protection from being answerable for their selection of clients and cases. It is understandable that even the worst possible abuser of laws and/or the perpetrators of the most heinous crimes have a right to be heard and make their best case of defense. We, therefore, cannot and should not blame, vilify, or harass the lawyers for choosing to represent their clients. Such lawyers work even for the most hated criminals, which is actually doing a great service to society. Their presence and participation in the adversarial trial process actually lend validity to the administration of justice and helps to distinguish the administration of justice from mob justice, media trial, and kangaroo courts. Any broad-based and fair administration of justice must allow full and unobstructed public debate engaging all the opposing sides of legal and ethical views. This is also important for checking the abuse of prosecution power of the government. Accused are given the opportunity to present their views fully, elaborately, and with the best available skills and expertise of lawyering. This would help us differentiate between a fair administration of justice and a military tribunal conducted at the dead of nights and behind the locks and doors. Right of representation is particularly relevant for the people accused of crimes. The representational requirement might be a bit weaker, albeit not totally absent, for the parties of civil controversies involving proprietary and/or official interests of the litigants.

When it comes to the business world, the representational requirement might be even weaker. This is because the businesses apparently have huge power of money and connection within the states. Corporations are said to be some legal persons separate from their directors. But this does not make them incapable of possessing a motive for their actions. Once we lift their corporate veils, we find some human being very well capable of possessing good or bad intentions and motives.[2] They also have pockets healthy enough to buy the best of the bests of lawyers[3] and get away with their misdeed and horse-trading harmful to the society and mass people.[4] Lawyers of the companies, corporations, and big businesses may not stand there purely for the cause of fair administration of justice, government’s democratic restraint, and people’s freedom from the abusive judicial process.[5] Therefore, could we say that lawyers are not subject to moral judgment for their choice of corporate clients in the same way we say this in relation to a regular civil or criminal law practitioner? Perhaps not. Offering an equal level of representational justification for a corporate lawyer might be problematic for the national interest and reputation of the profession.

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Corporate lawyers, on the other hand, might have their own stories to tell. They might say that by representing all types of business entities – good or bad,[6] they actually support the regulatory bodies, help prevent future illegality, encourage better corporate governance, and help the nation attain more economic growth, etc. None of these arguments are illegal, nor are they so outrageous to shock our nerve. But the moral question of the profession is unavoidable. It is rather stronger there. This is due to the very nature of position and power the businesses hold and the ease with which they could escape the scourge of law and buy the outcome they prefer. Secondly, they have more money to offer to the lawyers than an individual client could afford. Thirdly, there are good businesses and bad businesses competing with each other for access to and existence in the market. If the lawyers are to be freed from any bond of legal, professional, and moral conviction whatever, then the very integrity of the legal system could actually break down. Justice must be done and at the same time must not be bought and sold. Could we equate a lawyer for an eco-friendly and socially responsible corporation with a lawyer for a business giant looking to twist the arms of regulatory laws, labor rights, social and environmental justice regimes? Also, could we argue that the god of the market overtrumps the societal responsibility of the lawyer’s profession? This is perhaps the point where we would need to look at the lawyers’ professional autonomy in conjunction with their clients’ motives.[7] We cannot but look into the transactional nature of the corporation-lawyer relationship when we talk about the ethics of corporate lawyering.

 

While a regular civil or criminal lawyer could justify his choice of a client in terms of the institutional interest of the courts,[8] a corporate lawyer would perhaps need something more. S/he would need to tell us what else - apart from the business entities’ right to be represented, the country’s interest of business, growth, and investment - justify his/her role.[9] That is perhaps their consciences and the commitments of their profession towards the society. Our plain argument is that the separation of a corporate lawyer’s work from his/her client’s disposition is not as straight forward as it is for a regular civil and/or criminal lawyer. Corporate lawyers have an enhanced responsibility of soul searching as to what values their works are adding to society and its trust in courts and the profession.[10]

 

3. A doctrinal understanding of Lawyering Ethics

The ‘standard conception’ of lawyering ethics has not always been in conformity with the other moral accounts of the lawyers’ professional ethics.[11] The standard concept seeks to distance the personal disposition of the lawyer from the justness or unjustness of his/her 

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client’s case.[12] It is based on the relationship of trust, confidence, and privilege between the lawyers and their clients. Clients come to their lawyer with an open heart; lawyers, on the other hand, try to gain whatever is “legally” available.[13] The problem of this standard perception is understandable from our discussion in part two of this paper. The conventional and standard perception would likely allow the lawyer to pursue a cunning or abusive “legal” course that might be morally and ethically reprehensible.[14] Even the lawyer taking the course might personally feel the immorality or amorality of that course.[15] There are also scopes and loopholes in the law that might actually facilitate an amoral lawyer to adapt and temper the law for realizing this client’s goal.[16]

 

Some scholars, therefore, reject the standard concept and advocates a “legal merit” based perception of ethics. According to this understanding, lawyers would first need to see whether there is “legal merit” in the client’s case.[17] It appears that a mere “legal merit” standard might be a practical and realizable yardstick for most of the “moral” lawyers (leaving aside the amoral lawyers to whom morality or immorality of the client’s case does not matter). Some scholars, however, move one step further and suggest that lawyers should consider whether their taking of a case would “promote justice.”[18] This standard of “promoting justice” is way beyond a mere technical assessment of “legal merit.” It appears that even some of our “moral” lawyers might be reluctant to move that much. The problem of the “legal merit” standard, however, is in its avoidance of a lawyer’s conscience question. What could be “legal” might not be “moral” in the lawyer’s personal sense.[19] Also, there are laws that might not be morally acceptable.[20] In this sense, the “legal merit” standard may not yield more professional ethics than the standard concept could generate.[21] With both the standard and legal merit conception of lawyering ethics gone, the question is – Should professional ethics require the lawyers to be a “missionary”[22] or “idealized”[23] professional devoid of all the worldly considerations of their life? Like all others in society, lawyers also need to earn to live.

 

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As our study of the United Kingdom Solicitor Regulatory Authority (SRA)’s Code of Conduct and some case laws therefrom would show, realizing a practicable middle ground is not so easy. Still, the SRA has tried to achieve a middle ground where legal ethics is seen as both a doctrinal aspiration and a practical necessity.[24] This position could be explained in the form of a question - Could the lawyers convert their inner sense of morality to a practical conviction of not abusing the process of law in ruthless pursuance of the clients’ interest?

 

4. The United Kingdom SRA Standards and Regulations

The Solicitor Regulation Authority of the UK (SRA) has codified Standards and Regulations last updated in November 2019. It has adopted a three-stage model of professional standard-setting. It has outlined seven abstract mandatory “principles” of ethics.[25] Those are then followed up by some other detailed and specific “rules” or “code of conduct.” These rules and principles are then followed up by a requirement of declaration and assessment of competence by the SRA.[26] There are, however, two grey areas in the SRA Code of Conduct.

First, the abstract principles are said to be compulsory. The conduct rules on different day-to-day matters of a profession like client and case selection, communication confidentiality, conflict of interests, money laundering and terror finance, etc. are also mandatory. The obscurities of the principles are, however, difficult to avoid, and hence those become difficult to enforce in a mandatory sense. For the lawyers’ they do not set concrete duties, rather convey some virtue-like messages. As Andrew Boon puts it, regulating the conduct is different from making the lawyers accept some moral or social norms of their professional behavior.[27] As the Alastair Brett v SRA (2014) case shows, the choice between a virtue and a client’s legal interest is an excessively difficult task. In Alastair Brett, a lawyers’ confidentiality duty towards his client came in direct conflict with his duty of not misleading the court. Mr. Alastair Brett was required by law to protect a confidential communication from his client. The communication, if exposed, would have caused his client to lose his case. The situation, however, became such that Mr. Brett’s non-disclosure put him in jeopardy of a charge of misleading the court. A subsequent inquiry into the matter was made by the SRA. SRA’s Solicitors’ Disciplinary Tribunal convicted him. He appealed. The appellate court found that the court was actually misled by Mr. Brett’s refusal to disclose his communication with his client. The same court, however, ended up deciding that Mr. Brett did not “knowingly deceive” the court! Justice Wilkie of the 

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England and Wales High Court admitted that there were highly technical issues involved, and Mr. Brett’s situation was no less confusing:

“There may be cases in which a solicitor may knowingly mislead the court but not deceive the court. For my part, I find that an extremely difficult distinction to draw in its general application. I find it even more difficult to draw in the circumstances of this case.”[28]

 

Second, the regulator “Principles” support each other in a consistent way. For example, looking into the client’s interest is not illegal. Looking into the “public interest” is also paramount. Now, any given principle may be interpreted either in client’s terms or in public interest terms. SRA says that in such cases, the public interest - not the lawyer’s personal interest or the client’s interest - would be preferred. This public interest criterion is not concrete. All the principles may not always reflect the public interest. In this regard, Hutchinson brings a metaphoric distinction between a good soldier and a mercenary. He argues that a warrior would fight his war “with a genuine reluctance” to cause war and at the same time with a “deep commitment to acting honorably.”[29] Mercenaries, on the other hand, would lack these qualities. They would go to war with enthusiasm and act dishonorably if necessary. For Hutchinson, an ethical lawyer is a warrior who would think whether the case or cause before him is worthy of taking. Andrew Boon, like Hutchinson, considers the lawyers’ faithfulness to the public interest as part of their “Social Responsibility.”[30] However, as the discussion of the cases below shows it, balancing individual conducts against the public interest has been a tough challenge for the SRA.

In Bolton v Law Society (1993), a solicitor was punished by SDT for lending his client’s money to his relatives in the course of a transaction. He did this without taking security. The solicitor, however, had an honest belief that the money would be repaid in due time. Solicitor Disciplinary Tribunal suspended him from the profession, nonetheless. The Divisional Court heard the case again, took evidence on general character and disposition of the solicitor. It set aside the suspension and imposed monetary fines instead. The Court of Appeal again reversed the decision. Despite the solicitor not being found dishonest, Sir Thomas Bingham MR decided to punish him and held:

“If a solicitor is not shown to have acted dishonestly, but is shown to have fallen below the required standards of integrity, probity, and trustworthiness, his lapse is less serious, but it remains very serious indeed in a member of a profession whose reputation depends on trust.”[31]

In SRA v. Clyde and Co, the Solicitor Disciplinary Tribunal fined two lawyers of Clyde and Co., a very distinguished shipping and insurance law firm of London, with fifty thousand pounds. They allegedly failed to pay proper attention to the Law Society guidelines on “fraudulent financial arrangements warning and/or the warning notice on money laundering.” Despite there being no evidence of the lawyers intentionally doing that, the

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Tribunal imposed the fine for the sake of the “reputation of the profession, protect the public, deter others from similar misconduct” in the future.[32] While The Tribunal’s motivation might be an understandable and justified one, the lawyers’ burden arising therefrom might not be capable of tracing from within the concrete rules and regulations of the SRA. Given the grey areas of discretion and expectation of reasonable and prudent behavior from the lawyers, Clyde may end up being excessively harsh to the profession.

5. Conclusion

While the case studies and regulatory framework from the United Kingdom do not exhaustively outline all the dilemmas faced by corporate lawyers all over the world, those could give us a clue to the overarching moral vacuum of corporate lawyering and lawyering in general. As a field study on leading corporate law firms of London shows it, the professional leadership and chambers alike are lax in taking the moral question more seriously. Grooming of a new generation of ethical lawyers is still a far cry.[33] This London study was corroborated by Joan Loughrey’s study on the US, Canada, and Australia. Loughrey came to the same conclusion that the firms and professional leaders are failing miserably in the ethical aspects of their profession.[34] And, not unsurprisingly, the corporate law firms are not failing unknowingly.[35] This brings us to the question with which we started this piece – Has corporate lawyering lost its ethical base? The answer will perhaps be a big YES if professional gurus and their disciples continue to prefer the mercenary’s role over that of a warrior.

[1] Dolovich Sharon, ‘Ethical Lawyering and the Possibility of Integrity’ (2002) 70 Fordham Law Review 1629.

[2] David Thunder, ‘Can A Good Person Be a Lawyer’ (2006) 20(1) Notre Dame Journal of Law, Ethics & Public Policy 313, 315-318.

[3] Judith A. McMorrow and Luke M. Scheuer. ‘The Moral Responsibility of the Corporate Lawyer’ (2010) 60 Catholic University Law Review 275, 278.

[4] Sharon Dolovich, ‘Ethical Lawyering and the Possibility of Integrity’ (2002) UCLA Public Law & Legal Theory Series https://escholarship.org/uc/item/92t5q480 accessed 07 February 2021.

[5] Richard Moorhead, ‘Corporate Lawyers: Values, Institutional Logics and Ethics’ CEPLER Working Paper Series Paper 07/2015 http://epapers.bham.ac.uk/1984/1/cepler_working_paper_7_2015.pdf accessed 07 February 2021.

[6] Arjona César, “Amorality explained. Analysing the reasons that explain the standard conception of legal ethics” (2013) 4 Ramon Llull Journal of Applied Ethics 51.

[7] William H. Simon, ‘Ethical Discretion in Lawyering’ (1988) 101(6) Harvard Law Review 1083, 1084-1090.

[8] Charles Fried, ‘The Lawyer as Friend: The Moral Foundations of the Lawyer-Client Relation’, (1976) 85 Yale Law Journal 1060, 1061.

^[9] Donald Nicolson, ‘Making lawyers moral? Ethical codes and moral character’ (2005) 25(4) Legal Studies 601.

^[10] Gerald J Postema, ‘Moral Responsibility in Professional Ethics’ (1980) 55 New York University Law Review 63, 70-71.

^[11] Christine Parker, ‘A Critical Morality for Lawyers: Four Approaches to Lawyers' Ethics’ (2004) 30(1) Monash University Law Review 49, 51-52.

[12] David Kershaw and Richard Moorhead, ‘Consequential Responsibility for Client Wrongs: Lehman Brothers and the Regulation of the Legal Profession’ (2013) 76(1) Modern Law Review 26, 60-61.

[13] Bradley Wendel, ‘Legal Ethics is About the Law, Not Morality or Justice: A Reply to Critics’ (2012) Cornell Law School Research Paper No. 1202, 2.

[14] Tim Dare, ‘Mere-Zeal, Hyper-Zeal and the Ethical Obligations of Lawyers’ (2004) 7(1) Legal Ethics 24, 28.

[15] Stephen L. Pepper, ‘The Lawyer’s Amoral Ethical Role: A Defense, A Problem and Some Possibilities’ (1986) American Bar Foundation Research Journal 613.

[16]  Donald Nicolson and Julian Webb, The Lawyer's Amoral Role and Lawyer Immorality (Oxford University Press 2000).

[17] William H Simon, The Practice of Justice (Harvard University Press 2000) 138.

[18] Ronald Dworkin, Law’s Empire (Hart Publishing 1998).

[19] Stephen L. Pepper, ‘Integrating Morality and Law in Legal Practice: a Reply to Professor Simon’ (2010) 32 The Georgetown Journal of Legal Ethics 1011.

[20] David Luban, ‘Reason and Passion in Legal Ethics’ (1999) 51 Stanford Law Review 873, 875-76.

[21] Frederick A. Elliston, ‘Ethics, Professionalism and the Practice of Law’ (1985) 16 Loyola University Chicago Law Journal 529.

[22] Ted Schneyer, ‘Moral Philosophy’s Standard Misconception of Legal Ethics’ (1984) 6 Wisconsin Law Review 1529, 1539-40.

[23] Alice Woolley and Bradley Wendel, ‘Legal Ethics and Moral Character’ (2010) 23(4) Georgetown Journal of Legal Ethics 1065.

[24] Alice Woolley, ‘The Problem of Disagreement in Legal Ethics Theory’ (2013) 26(1) Canadian Journal of Law & Jurisprudence 181, 190.

[25] Solicitor Regulation Authority (SRA), ‘Standards and Regulations, 2019 Principles’ https://www.sra.org.uk/solicitors/standards-regulations/principles/ accessed 15 January 2021.

[26] Part 1 Paragraph 2.4 of the SRA Assessment of Character and Suitability Rules runs: “If on the information available, the SRA cannot be satisfied you are of good character and suitable for the role, and it considers that any risk to the public or the public interest can be addressed by the imposition of conditions on your authorisation or approval under regulation 7.1(b) of the SRA Authorisation of Individuals Regulations, or rule 3.1 or 13.8 of the SRA Authorisation of Firms Rules, as appropriate, the SRA must impose such conditions accordingly.” See: SRA, ‘Standards and Regulations, 2019 Assessment of Character and Suitability’ https://www.sra.org.uk/solicitors/standards-regulations/assessment-character-suitability-rules/ accessed 12 January 2021.

[27] Andrew Boon, ‘The Ethics and Conduct of Lawyers in England and Wales’, (Hart Publishing 2014) 355-8.

[28] Alaister Brett v Solicitors Regulation Authority (SRA) [2014] EWHC 2974 (Admin).

[29] Allan C. Hutchinson, Fighting Fair: Legal Ethics for an Adversarial Age (Cambridge University Press 2015) 57-65, 77.

[30] Andrew Boon, Lawyers’ Ethics and Professional Responsibility (Hart Publishing 2015) 424, Chapter 8.

[31] Bolton v The Law Society [1993] EWCA Civ 32.

[32] SRA v Clyde & Co [2017] SDT Case No 11599-2017.

[33] Steven Vaughan and Emma Oakley, ‘Gorilla exceptions’ and the ethically apathetic corporate lawyer’ (2016) 19(1) Legal Ethics 50.

[34] Joan Loughrey, ‘Corporate Lawyers and Corporate Governance’, (Cambridge University Press 2011).

[35] Steven, ‘Are Corporate Lawyers Ethically Apathetic?’ Interview with Future Learn https://www.futurelearn.com/info/courses/corporate-lawyers/0/steps/83993 accessed 07/02/2021.