The practice of law has flipped from vocation to business. Law firms and individual lawyers are measured explicitly in predominantly economic terms.Profit per equity partner (PEP) and other indicators trickle down firms through targets and bonuses. Hourly rates are the oil that greases this engine. Alongside that is the somewhat servile claim that lawyers are not deal breakers or pettifoggers, but business-focused advisers, and business-focused advisers for whom the client comes first.
There is a lot to commend that approach – lawyers have been too insular, their advice not always useful in practical terms – but there are also problems. The first is that priming lawyers to think of their own value in primarily economic terms poses risks. Some, including Maryam Kouchaki of the Edmond J Safra Center for Ethics at Harvard University, call this the money prime. Money primes make us more selfish; we see others as less human; and they increase lying and cheating.
It also increases a ‘business frame’. A business frame is what stopped Ford recalling the Ford Pinto when its fuel tanks exploded in low-impact collisions. Internally, it was a business decision, not a moral one.
Couple a business frame with ‘client first’. Lord Hunt, the former government minister and senior solicitor, while reviewing legal services regulation noted that: ‘Putting the client first was bred into me.’ His elevation of client to a pre-eminent position is wrong in law and conduct, but his is a belief widely shared in practice.
Psychologically we are all predisposed to align with their clients. This can compromise our judgement. We may overestimate prospects of success on our clients’ cases; accountants certify accounts more easily if told they are instructed. Client first may very well be bred into us already. Research by Francesca Gino and Joshua Margolis of Harvard Business School show that some biases are very subtle indeed. An organisational focus on attainment, hope or aspiration encourages more dishonesty than a prevention focus (which revolves around responsibilities, obligations and protection from negative outcomes). Subtle differences in how an organisation defines culture and how an individual line manager defines a task may impact on ethicality. A task that begins with the observation that it ‘is being conducted to advance the ideals and aspirations pursued by applied social science’ led to more dishonesty than one that began by mentioning ‘strict adherence to the standards and obligations required of applied social science’.
Such findings throw an interesting light on management culture and the debate between aspirational principles and compliance-oriented rules. Of course, one should not get too carried away; the experiments focus on detriment. A promotional focus may also lead to higher levels of achievement, to be balanced against the risk of misconduct. The point is to develop organisational and professional frameworks with the best balance.
Is there any evidence that lawyers in different areas of work have different values? My experimental work with colleagues suggests two personal values most consistent with a business frame – achievement and power – are stronger in commercial lawyers. That does not mean they are less ethical of course, though we have seen some evidence that for some it increases their appetite for legal/ethical risk.
Lord Hunt noted: ‘Putting the client first was bred into me.’ His elevation of client to a pre-eminent position is wrong in law and conduct, but his is a belief widely shared in practice.
We cannot, nor should we want to, stamp out all legal risk. Often the law is not certain, or it conflicts. Too cautious an approach could lead to paralysis. That opens the door to a very interesting question: what kind of risk or unlawfulness is okay? It is not an easy question. We have interviewed commercial lawyers in-house and in private practice. Our interviewees spoke of what is ‘tolerated’ or simply part of a ‘commercial approach’. Ultimately the limits were determined not by professional ethics, but by the criminal law and commercial practice. One said: ‘When you’re advising a best course of action which isn’t criminal, it’s just commercial, they can choose to ignore you, and you’re an employee.’
Some spoke of limits in terms of whether it was not clearly criminal. To push the issue a bit further, we also asked which of three interests (public, client or firm) was most important to them as lawyers. Most, but not all, said client over public, the same inversion of the professional rules that Lord Hunt made. Furthermore, some private practitioners saw the struggle as being between client and firm interest. Some even went as far as saying the firm’s interest came first. Would their managing partners be quietly proud?
To crystallise this dilemma we asked them about an overbilling scenario. Asked to imagine they were an assistant solicitor on a case where it appeared the client had been overbilled by a partner, what would they do? They might have a word with the partner, to try to persuade him of the business sense in reducing the bill, they said, but the expected behaviour gravitated towards this: ‘… I know what they will do [laughs]… keep their mouth shut, and not look like an idiot… because… they don’t want to lose the firm money and look like people who want to give it away… you do that at some risk to yourself…’
It was a business not a professional ethics issue and when it came to it, it was also a hierarchical issue. They served the firm and its hierarchy, they deferred to what the partner was assumed to want and they did so partly to promote or protect themselves. That is, the values of power and achievement influenced them most.
So what we saw was largely a business-driven endeavour: promotion over compliance. How was the culture of ethics managed? Mostly – though not always – this was seen as being down to picking the right people, and assuming they had the right training and would therefore follow the right rules. Is this good enough? An assistant solicitor we spoke to gives their view: ‘I don’t think I’ve ever come across any support or encouragement on [the ethics] front… it’s assumed that you’ve… gone through your ethics training… and you are meant to know it all. Nothing has ever, really ever, been said to me… from the partners or in terms of training that in any way encourages it or supports it.’
This interview data derives from a small qualitative study. It is not conclusive of there being a problem. Indeed, most of our respondents did not think there was a major problem. Academic scepticism may be ahead of reality. But, looking at a series of recent cases, we could see there may be grounds for concern.
Take Alastair Brett, formerly the much-respected in-house lawyer at The Times, who was suspended from practising for six months by the Solicitors Disciplinary Tribunal (SDT) for misleading a court and ‘failing to act with integrity’ in litigation over the naming of anonymous ‘Nightjack’ police blogger in 2009. The tribunal remarked on his ‘win-at-all-costs approach to the Nightjack litigation’.
The ethical kaleidoscope that was the News of the World involves at least four lawyers: two in-house and two in private practice. I have written on my blog about the case. For now it is simply worth noting Rupert Murdoch’s evidence to the Leveson Inquiry (Rupert Murdoch Transcript of Morning Hearing, 26 April 2012): ‘… there’s no question in my mind that maybe even the editor, but certainly beyond that someone took charge of a cover-up, which we were victim to…’
Whether Mr Murdoch’s position is convenient or accurate is of no obvious comfort to the lawyers who appear to have been involved in a number of significant steps along the way, culpably or otherwise.
Some of Clifford Chance’s correspondence in the high-profile Excalibur case was criticised by Clarke J in the costs judgment as ‘unacceptable in content’, including ‘included ill-founded allegations of criminal conduct’. Take also the two Allen & Overy partners facing the possibility of an investigation by the Solicitors Regulation Authority following allegations they had put pressure on a witness during the high-profile Dahdaleh fraud case. Then there is the former Stewarts Law partner who was struck off the roll last year amid allegations of dishonesty, who has still failed to entirely clear his name even after the High Court ruled earlier this year that his case should be heard again by the SDT.
Exculpatory explanations may yet emerge for some of these cases, but the facts as known suggest that even the largest firms, with the biggest reputations, may take a step too far in the service of client interests, contrary to the public interest in the administration of justice. They show how client first and business focus has the potential to go seriously awry. It may be time to do something about it.
Richard Moorhead is professor of law and professional ethics at UCL, he also blogs at Lawyer Watch