Privatizing Professionalism: Client Control of Lawyers’ Ethics

Abstract:     
Commentators suggest that the traditional model of the lawyer exercising independent professional judgment has, especially in the corporate client ‘hemisphere’, all but disappeared. A client-centered ideology that “privatizes the lawyer’s role” has replaced it. But if so, the question then arises: what kind of ethics do large corporate clients want of the lawyers they retain?

Our research concludes that corporate clients, and in particular global corporations, are gaining influence and control over lawyers' practices at a scope significantly above and beyond what had been customary in the past. In particular, norms relating both to lawyers' practice and lawyers’ ethics that had formerly been under the domain of professional and state bodies, or left to the discretion of lawyers and their firms, are increasingly incorporated into "guidelines", "procedures", "codes of conduct", "manuals" or "best practices" memoranda, which lawyers are expected to follow.

Indeed, these guidelines and norms are not the outcome of private negotiation between lawyer and client, but imposed unilaterally upon lawyers retained by the corporate client. Thus they are evolving into a new kind of regulation, this time by private clients, hence the notion of ‘privatizing professionalism’.

In order to discuss this development we draw upon two theoretical paradigms and bodies of literature: 1. Regulation of the Legal Profession: we consider outside counsel guidelines to be a form of lawyers' regulation. 2. The changing roles of inside versus outside counsel in corporate practice. We then present an overview of our research findings which are based on a review of over 20 sets of Guidelines and interviews with 20 in-house and outside lawyers and general counsel in the US, UK and Israel. Following this we set out some of the main elements of Wal Mart’s Outside Counsel Procedures, since they illustrate just how detailed and ambitious such Procedures can be. Finally, we argue that OC Guidelines constitute a form of ‘privatized professionalism’, consider some of the implications of this, and suggest that in many ways large corporate clients are better suited to monitor and oversee lawyers' professional conduct. Such a conclusion, however, requires that we shift our focus to the core values underlying corporate client activity and ethics.

Number of Pages in PDF File: 41

Keywords: lawyers' ethics, professional responsibility, professionalism, globalization, regulation, in house counsel, corporate social responsibility

JEL Classification: K10, K30

Accepted Paper Series