Corporate Lawyers after the Big Quake: The Conceptual Fault Line in the Professional Duty of Confidentiality

Abstract:     
Bost examines the convulsion and consequent seismic shift in the roles, duties, expectations, and liabilities of corporate lawyers that occurred as a result of the corporate scandals of 2000-2002. Lawyer reform came first from the Securities and Exchange Commission, in response to the mandates of the Sarbanes-Oxley Act of 2002, and then from the American Bar Association. The primary focus of reform has been on the lawyer's duty of confidentiality, and the primary effect of the SEC and ABA initiatives has been to create or confirm significant exceptions to that duty. Bost begins with an examination of the corporate scandal resulting in the sudden demise of Enron Corporation, and focuses on the activities of Enron's lawyers. He then takes a look at the Sarbanes-Oxley Act of 2002 and SEC rules promulgated under this law and their impact on corporate attorneys. Bost analyzes the comprehensive 2003 amendments to Rules 1.6 and 1.13 of the ABA Model Rules of Professional Conduct and the twenty-one jurisdictions that have either adopted or proposed rule changes that would partially or fully conform to the new ABA rules. He focuses particularly on confidentiality, attorney-client privilege and the work product doctrine. He then outlines the ABA's efforts in 2005 to enhance the interests of corporate clients in maintaining confidentiality, thereby diminishing the competing law enforcement interests of government. Bost concludes with a discussion of the vision of lawyering that will best achieve the goal of the corporate lawyer functioning as a trusted counselor for her client, rather than merely as an implementer or transaction engineer.

Number of Pages in PDF File: 58

Keywords: corporate attorney, confidentiality

JEL Classification: K22

Accepted Paper Series