Who Let the Lawyers Out?: Reconstructing the Role of the Chief Legal Officer and the Corporate Client in a Globalizing World

University of Pennsylvania Journal of Business Law (Forthcoming)

142 Pages Posted: 18 Sep 2015 Last revised: 26 Jan 2016

Constance E. Bagley

Yale University

Mark Roellig

Massachusetts Mutual Insurance Company

Gianmarco Massameno

Harvard University

Date Written: January 20, 2016

Abstract

In the wake of the implosion of Enron and WorldCom in 2001, Judge Stanley Sporkin famously asked, “Where were the lawyers?” Section 307 of the Sarbanes-Oxley Act of 2002 imposed new duties on in-house counsel to report up violations of law. Yet, we still had the LIBOR and foreign-exchange rigging scandals, which had, by 2015, led to multi-billion dollar settlements and fired bank CEOs in England and Germany; massive insider trading by hedge funds and corporate titans; the subprime mortgage crisis; and the option backdating scandals. We submit that legislation and regulatory action alone are and will continue to be insufficient to deter corporate misconduct of the sort we have experienced in the last two decades. As in-house counsel have become more entrepreneurial in both the United States and elsewhere, and as many business schools have failed to adequately prepare future managers to address the legal and ethical aspects of business, more attention must be focused on the internal forces within companies. In addition to addressing Judge Sporkin’s question, we must ask, “Where were the managers?” In this Article, we provide new data on the role of in-house counsel in Sweden and assert that counsel and managers can be more effective drivers of both compliant corporate behavior and the creation of sustainable value when they work together as strategic partners, that is, when corporate managers are legally astute and are advised by strategically astute counsel.

Keywords: general counsel, compliance, legal astuteness, strategy

JEL Classification: K20, K42

Suggested Citation

Bagley, Constance E. and Roellig, Mark and Massameno, Gianmarco, Who Let the Lawyers Out?: Reconstructing the Role of the Chief Legal Officer and the Corporate Client in a Globalizing World (January 20, 2016). University of Pennsylvania Journal of Business Law (Forthcoming). Available at SSRN: https://ssrn.com/abstract=2661466 or http://dx.doi.org/10.2139/ssrn.2661466

Constance E. Bagley (Contact Author)

Yale University ( email )

20 Fox Den Way
New Haven, CT 06525
United States

HOME PAGE: http://winninglegally.com

Mark Roellig

Massachusetts Mutual Insurance Company ( email )

1295 State Street
B417
Springfield, MA 01111
United States

Gianmarco Massameno

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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