The Ethics of In-House Practice

Abstract

This book chapter examines the complex role that inside counsel (also known as in-house or corporate counsel) play in corporate America. Once viewed as the quality-of-life refuge from private practice, the in-house position is now recognized as “among the most complex and difficult of those functions performed by lawyers” (Hazard 1997, 1011). One reason why the position is so complex and difficult is the ambiguity and internal contradiction in inside counsel’s job description. On the one hand, inside counsel are intentionally carved into the corporate decision-making process to constrain managerial discretion and safeguard the company from legal trouble. Accordingly, inside counsel often have direct responsibility over compliance and are expected to intervene when significant legal risks are at stake. On the other hand, inside counsel are often regarded as mere “advisers” and thus remain subordinate to managerial prerogatives – even with respect to serious legal risks. On this view, inside counsel are expected to defer to business management at whose pleasure they serve. This latter view is consistent with the conventional skepticism about inside counsel’s willingness to check corporate misconduct (DeMott 2005, 967). This chapter explores how inside counsel negotiate these dueling job descriptions by developing an analytical framework based on Rule 1.13 of the American Bar Association’s Model Rules of Professional Conduct and reviewing the existing empirical literature on inside counsel to determine whether and to what degree inside counsel’s behavior conforms to the Model Rules.

Keywords: inside counsel, in-house counsel, corporate counsel, corporate legal department, general counsel, legal ethics, professional responsibility, organizational client, corporate client, empirical literature, sociology of the legal profession, Model Rules of Professional Conduct