University of Tennessee Legal Studies Research Paper No. 101
68 Pages Posted: 10 Mar 2010 Last revised: 23 Jul 2010
Date Written: March 9, 2010
Joseph Collins was a successful business lawyer, with a sophisticated practice at Mayer Brown LLP. In January 2010, Collins was sentenced to seven years in prison for his role in a massive fraud that cost investors millions and sent his client Refco, Inc. into bankruptcy. At sentencing, the judge reportedly stated, “I think this is a case of excessive loyalty to his client.” Collins’ own testimony reflects a lawyer who believed he was zealously representing his client's interests. But in reality, Collins’ conduct was not “loyal” to his client. He contributed to his client’s destruction.
With the Collins example and others, I argue that business lawyers act as zealous advocates to their own clients’ peril. I explain that professional conduct rules are central to the problem. The advisor’s duties are relegated to a single rule that provides scant direction about how to advise. In the absence of direction, lawyers fill in the gaps with zealous advocacy. After examining the problems of the zealous advocacy mantra, I suggest that “fiduciary duty” would be a preferable touchstone for attorney-advisors. While it is true lawyers are already fiduciaries, fiduciary duty is not the focus for most lawyers. I argue that it should be. Using fiduciary duty as a framework, I propose professional conduct rules that would provide direction to business lawyers that is more consistent with their clients’ interests.
Keywords: zealous advocacy, fiduciary duty, advisor, professional conduct rules, attorney malpractice
JEL Classification: K20, K42
Suggested Citation: Suggested Citation
Schaefer, Paula, Harming Business Clients with Zealous Advocacy: Rethinking the Attorney Advisor's Touchstone (March 9, 2010). University of Tennessee Legal Studies Research Paper No. 101. Available at SSRN: https://ssrn.com/abstract=1567657