The Effect of the
Sarbanes - Oxley Act on the Attorney-Client Privilege†
James
W. Semple
Some of the people . . . who could have prevented the
crash are sitting before us today. They could have acted before matters got out
of hand. They could have been more
skeptical of the proposals and promises of the business teams. They could have looked to learn what was
really happening and warned Enron leadership about what they found. . . . The attorneys are the people others rely on
to make sure matters are OK, are legal, are not going to put a company at undue
risk. They're the adult supervision.
n
Prepared statement of Rep. Billy Tauzin, R-La., at March 14
congressional hearing on the Enron collapse
I.
Introduction
This
article will examine briefly the effect of the Sarbanes - Oxley Act on the
traditional rule that a lawyer must maintain client confidences. It includes as well an analysis of the
professional conduct regulations variously proposed to implement the Act.[1]
II.
Client Confidences
The
Comment to Delaware Rule of Professional Responsibility 1.6 provides a succinct
and accurate description of the societal function and value of maintaining
client confidences. As noted:
The lawyer is part of a judicial
system charged with upholding the law.
One of the lawyer’s functions is to advise clients so that they avoid
any violation of the law in the proper exercise of their rights.
The
observance of the ethical obligation of a lawyer to hold inviolate confidential
information of the client not only facilitates the full development of facts
essential to proper representation of the client but also encourages people to
seek early legal assistance.
Almost without exception, clients
come to lawyers in order to determine what their rights are and what is, in the
maze of laws and regulations, deemed to be legal and correct. The common law recognizes that the client’s
confidences must be protected from disclosure.
Based upon experience, lawyers know that almost all clients follow the
advice given, and the law is upheld.
A fundamental principle in the
client-lawyer relationship is that the lawyer maintain confidentiality of
information relating to the representation.
The client is thereby encouraged to communicate fully and frankly with
the lawyer even as to embarrassing or legally damaging subject matter.
The principle of confidentiality is
given effect in two related bodies of law, the attorney-client privilege (which
includes the work product doctrine) in the law of evidence and the rule of
confidentiality established in professional ethics. The attorney-client privilege applies in
judicial and other proceedings in which a lawyer may be called as a witness or
otherwise required to produce evidence concerning a client. The rule of client-lawyer confidentiality
applies in situations other than those where evidence is sought from the lawyer
through compulsion of law. The
confidentiality rule applies not merely to matters communicated in confidence
by the client but also to all information relating to the representation,
whatever its source. A lawyer may not
disclose such information except as authorized or required by the Rules of
Professional Conduct or other law.[2]
III.
Attorney Client Privilege
As
in most states, the attorney-client privilege has long existed in
A client has a privilege to refuse
to disclose and to prevent any other person from disclosing confidential
communications made for the purpose of facilitating the rendition of legal
services to the client (1) between himself or his representative and his lawyer
or his lawyer’s representative, (2) between his lawyer and the lawyer’s
representative, (3) by him or his representative or his lawyer or a
representative of a lawyer to a lawyer or a representative of a lawyer
representing another in a matter of common interest, (4) between
representatives of a client or between the client and a representative of the
client, or (5) among lawyers and their representatives representing the same
client.[4]
In
applying Rule 502(b),
The
conflict of lawyer as whistleblower or confidante is not new. In Lincoln
Savings & Loan Association v. Wall,[8] Judge Stanley Sporkin, himself a former SEC
Chair, posed the relevant question about the role of professionals in the savings
and loan scandals of the late 1980’s:
“What is difficult to understand is that with all the professional
talent involved (both accounting and legal) why at least one professional would
not have blown the whistle . . . .” [9] Traditionally, the legal profession has
valued highly the confidentiality of information provided as part of the
attorney-client communication. In State v. Macumber,[10] a defendant in a murder trial offered the
testimony of a lawyer whose client had admitted to the crime but had since
died. The Arizona Supreme Court affirmed
the trial court’s refusal to admit the attorney’s testimony about the
confession, holding that it was privileged and confidential even after the
client’s death.
IV.
The Act ‘s Regulation of Attorneys
The
Sarbanes - Oxley Act (the “Act”) mandated that, within 180 days of
(1)
requiring an attorney to report evidence of a material violation of a
securities law or breach of fiduciary duty for similar violation by the company
or any agent thereof, to the Chief Legal Counsel or the Chief Executive Officer
of the company (or the equivalent thereof); and (2) if the counsel or officer
does not appropriately respond to the evidence (adopting, as necessary,
appropriate remedial measures or sanctions with respect to the violation),
requiring the attorney to report the evidence to the audit committee or the
Board of Directors of the issuer or to another committee of the Board of
Directors comprised solely of directors not employed directly or indirectly by
the issuer, or to the Board of Directors.[11]
The SEC’s professional discipline rule (Rule 102(a))
allows the SEC to “censure a person or deny, temporarily or permanently, the
privilege of appearing or practicing before it in any way.” Thus, for example, an attorney can be denied
the opportunity to appear personally before the SEC to litigate an
administrative proceeding or to transact any business before the agency,
including filing a report or a registration statement. Then SEC Chairman Harvey Pitt stated publicly
on
V.
The Proposed Regulations
On
In
further response to the Act, the SEC then published proposed rules for the
Implementation of Standards of Professional Conduct for Attorneys on
A.
The Client Defined
Subsection
205.3(a) of the proposed regulations required that an attorney representing an
issuer represent the issuer as an entity,
rather than the officers or other individuals with whom the attorney interacts
in the course of that representation. Furthermore, the attorney was obligated
to act in the best interests of the issuer and its shareholders.[13] This definition was consonant with the terms
of Model Rule 1.13, “Organization as Client,” which notes that the client of an
attorney representing a corporation is the entity itself. That rule imposes ethical obligations on the
lawyer to address legal violations by officers and employees of the corporation
and, if necessary and depending on the circumstances, to consult someone higher
in the organization, including the board of directors.
B. Material Violation Trigger
Under
the proposed rule, the duty to report a material violation pursuant to
subsection 205.3 (b) was triggered when an attorney “reasonably believes” that
a material violation has occurred, is occurring, or is about to occur. The SEC contended that this provision limits
the instances in which this reporting duty will arise to those situations where
it is appropriate to protect investors.
This provision came under heavy fire from critics. Indeed, the SEC itself expressed doubts about
the standard:
The
definition of “reasonable” or “reasonably” is taken from Rule 1.0(h) of the
(l)
Reasonably believes means that an
attorney, acting reasonably, would believe the matter in question.
This
definition is based on the definition of “reasonable belief” or “reasonably
believes” in Rule 1.0(i) of the
C.
Reporting and Documenting the Reasonable
Belief
Once
triggered, the proposed rule mandated that the attorney report to the issuer’s
chief legal officer (“CLO”), or to the issuer’s CLO and chief executive officer
(“CEO”). The attorney was required as
well to document the report and any subsequent response. In addition, the attorney had to retain such
documentation for a reasonable period of time, supposedly to protect the
attorney in the event his or her compliance was questioned in the future.
This
rule obligated the issuer’s CLO to determine whether to conduct an inquiry
about whether a violation in fact occurred, was occurring or was about to
occur. If the CLO reasonably concluded that there was no material violation, he
or she would notify the reporting attorney of this conclusion and take
reasonable steps to preserve relevant documentary evidence. If the CLO
concluded that a material violation has occurred, is occurring or is about to
occur, the CLO would take reasonable steps to ensure that the issuer adopt
appropriate remedial measures and/or sanctions -- including appropriate
disclosures. Furthermore, the CLO would report “up the ladder” within the
company any remedial measures that were adopted, and advise the reporting
attorney of his or her conclusions.
In
the event a reporting attorney did not receive an appropriate response within a
reasonable time, he or she was required to report the evidence of a material
violation to the issuer’s audit committee, another committee of independent
directors, or to the full board.
Similarly, if the attorney reasonably believed that it would be futile
to report evidence of a material violation to the CLO and CEO, the attorney
could report directly to the issuer’s audit committee, another committee of
independent directors, or to the full board. A reporting attorney who reported
a matter all the way “up the ladder” within the company and who reasonably
believed that the issuer had not responded appropriately would take reasonable
steps under the circumstances to document the response and to retain any such
documentation for a reasonable time.
D.
Mandatory Withdrawal
Subsection 205.3(d) addressed the obligation of an attorney who had not received an appropriate response from the issuer and, in certain instances, required or permitted a “noisy withdrawal.” This provision was controversial because it is not specifically mandated by Section 307 (a provision that obligates a reporting attorney under certain circumstances to disaffirm a submission to the Commission that the attorney believes has been tainted by a material violation). It also permitted the attorney to disaffirm under other circumstances. The SEC claimed that the proposal was important to effectively implement the reporting obligation in those instances where an issuer does not respond appropriately.
The
proposal distinguished between outside attorneys retained by the issuer and
attorneys employed by the issuer. It imposed an affirmative obligation on
attorneys to disaffirm a document or filing where they believed a violation was
ongoing or prospective because of the greater potential of harm to investors
inherent in such violations. The proposed rule provided that where an attorney
filed a notification with the Commission as part of a “noisy withdrawal,” no
violation of the attorney/client privilege occured.
E.
Qualified Legal Compliance Committee
Reporting
As
an alternative process for considering reports of material violations, an
issuer might, but was not required to, establish a “qualified legal compliance
committee” (QLCC) comprised of at least one member of the issuer’s audit
committee and two or more members of the issuer’s board. All needed to be independent for the purpose
of investigating reports made by attorneys who supplied evidence of a material
violation. The QLCC would be authorized
to require the issuer to take remedial action.
If the issuer were to fail to act as directed by the QLCC, each QLCC
member would hold a responsibility to notify the SEC. Attorneys who reported evidence of a material
violation to a QLCC would not be subject to the rule’s “noisy withdrawal”
requirement.
VI.
Comments
The
ABA, the Conference of Chief Justices, and a group of seventy-five major law
firms requested that the SEC delay implementation and permit more time for
consideration and comment on the proposed regulations. “These proposals raise
fundamental and complex policy issues,” the ABA Task Force wrote when asking
the agency to defer action on many of them. “A more extended comment period
would permit a more careful analysis and response by many constituencies who
are or should be vitally interested in the effect of the non-mandated
proposals, including public company officials and other lawyer organizations.” [15] The following concerns were among those
expressed.
A.
Ultravires
The
regulations went beyond the mandate Congress generally instructed the SEC to
adopt: “minimum standards of conduct for attorneys appearing and practicing
before the commission in any way.”[16]
B.
Preemption
The
regulations threatened existing federalism by promoting inconsistent federal
and state regulation. Speaking before the proposals were announced, then
president of the ABA, Robert Hirshon, posed a question that goes to the heart
of his preemption concerns about the SEC rules:
What
if the SEC, for example, says that if you can’t persuade your corporation to do
X, Y or Z you have to go to law enforcement, but the state that licenses you
says you can’t do that because it’s a breach of the attorney-client privilege?
Remember, this is the privilege that forms the basis of attorney-client
relationships, and a federal statute that mandates disregarding it is very
ill-advised.[17]
There
is little question that the United States Congress can federalize the
regulation of attorney conduct.[18] According to the Comments to RPC 1.6, whether
another provision of law supersedes Rule 1.6 is a matter of interpretation
beyond the scope of the rules, but a presumption should exist against such preemption. The SEC asserts that its rule preempts any
conflicting state rule. Thus, the rule
permitting disclosure would appear to preempt a state’s rule forbidding
disclosure.[19] Accordingly, an attorney appearing and
practicing before the Commission, who is admitted in a jurisdiction that
forbids disclosure of confidential information under circumstances where the
proposed rule would permit disclosure, may disclose the information to the
Commission notwithstanding the contrary state rule.[20]
C.
First Time, Last Time
A
panelist at a seminar on the topic has been quoted as saying that the real
problem with this rule is that “the first time a lawyer goes around management
to the board would also be the last.” [21] Although glib, this comment mirrors
reality. If the board or senior
management of a company is greedy or corrupt, these rules will offer no
remedy. The disclosure of confidences
will impair a lawyer’s ability to counsel clients against potentially bad
decisions by chilling the clients’ willingness to share confidences.
D.
Reasonable Belief Standard
If
board and management are acting in good faith, both will be less inclined to
share information with an attorney in a situation that is morally or legally
ambiguous because of the justifiable fear that the attorney will become a
whistleblower. The standard
“makes it dangerous not to be wrong,” as one New York lawyer has noted: “[t]o
be safe, a lawyer may disclose or withdraw in situations where there’s nothing
wrong.” [22] Another
asserted that, “[t]here’s likely to be a reluctance for people within a
corporation to consult with their lawyers, because if they do, they open up a
Pandora’s box that they can’t close.” [23] Under the
proposed rule, as soon as a lawyer made a “noisy withdrawal,” the
SEC would likely subpoena the records of compliance that the lawyer was
required to maintain. That guaranteed a conflict between the duty of
confidentiality and the lawyer’s personal interest in avoiding discipline or
indictment.
E. Selective Waiver
Proposed
subsection 205.3(e)(3) provided that an issuer would not waive any applicable
privileges by sharing confidential information with the SEC about misconduct by
the issuer’s employees or officers, pursuant to a confidentiality agreement.
The SEC reasoned that allowing cooperative issuers and attorneys to produce
internal reports under a confidentiality agreement without waiving privilege
would significantly expedite Commission investigations. However, it is far from
clear whether a client waives attorney-client privilege or other protection,
such as work-product protection, by sharing confidential information regarding
misconduct by the client’s employees or officers with a governmental agency,
even pursuant to a confidentiality agreement. The Eighth Circuit Court of Appeals
has adopted the selective waiver doctrine and has protected work product
disclosures made to the SEC during a private, nonpublic investigation, even in
the absence of an express confidentiality agreement.[24] On the other hand, the D.C. Circuit has held
that the work product privilege could be preserved only if a confidentiality
agreement has been entered before the disclosure.[25] The Second, Third, Fourth, and Sixth Circuits
have held that, when there is no confidentially agreement, waiver of the
privilege as to one opponent waives the privilege for all.[26] A confidentiality agreement might have
changed the decision in several of these cases,[27] but two cases found that the privilege was
waived even when the disclosure was made subject to such an agreement.[28]
In Saito v.
McKesson HBOC, Inc.,[29] the Delaware Court of Chancery -- no stranger to business disputes --
adopted a selective waiver rule for disclosures made to law enforcement
agencies pursuant to a confidentiality agreement because such a rule
“encourages cooperation with law enforcement agencies without any negative cost
to society or to private plaintiffs . . . .”[30] Chancellor Chandler reasoned:
Thus, because I find that it is in
the best interests of the shareholders to
encourage corporate compliance, and because the law enforcement agencies are
designed by our legislature as the first line of defense for such shareholders,
I adopt a selective waiver rule for disclosures made to law enforcement
agencies pursuant to a confidentiality agreement. Confidential disclosure of
work product during law enforcement agency investigations relinquishes the work
product privilege only as to that agency, not as to the client’s other
adversaries. The selective waiver rule encourages cooperation with law
enforcement agencies without any negative cost to society or to private
plaintiffs.[31]
In
any case, the proposed rule has been withdrawn, and uncertainty prevails on
this point. Although the SEC
confidently asserted that waiver would be limited to the agency itself, that was
a dubious proposition. The SEC admitted
in a footnote to the proposed rules that “the federal case law on limited
waiver is in a state of hopeless confusion.” [32] A review of the cases
previously cited makes that footnote something of an understatement.
VII
THE FINAL REGULATIONS
On January
29, 2003, the Securities and Exchange Commission (the “SEC”) published final
rules pursuant to Section 307 of the Act.
These have established standards of professional conduct for attorneys
representing companies before the SEC.
A.
Issuer as Client
This
section again clarifies that the client is the issuer, not its officers or
directors.[33]
B. Material Violation Trigger
While
maintaining the duty to report a material violation, the trigger for this duty
has changed. The proposed rule defined the information that the lawyer would
need to report as follows: "Evidence of a material violation means
information that would lead an attorney reasonably to believe that a material
violation has occurred, is occurring, or is about to occur." The final rule reads: "Evidence of a
material violation means credible evidence, based upon which it would be
unreasonable, under the circumstances, for a prudent and competent attorney not
to conclude that it is reasonably likely that a material violation has
occurred, is ongoing, or is about to occur." Parents and grade school teachers often were
heard to pound home the grammatical axiom: “Never use double negatives.” But they were not federal regulators. As a result of this tortured change, a lawyer
who reasonably believes his client has committed a violation can remain silent,
so long as it would not be unreasonable for someone else to conclude that he
was right. In addition to making the language of the rule incapable of
achieving a grade better than a “D” from any reputable English teacher, using
the double negative makes it infinitely harder for the SEC to prove a violation
later.
C. Documentation of Reporting
Section
205.3(b)(2) of the proposed rule has been withdrawn by the SEC in the final
rule.[34]
D. “In-House” or “Up-the
Ladder” Reporting
The new
rules provide for a two-step internal reporting process regarding material
violations.[35] First, the
rules require an attorney to report evidence of a material violation
“up-the-ladder” within the issuer company to the “chief legal counsel” (i.e.,
the company’s general counsel) or the chief executive officer (the “CEO”) of
the company (or an equivalent official).[36] Second, if the chief legal counsel or the CEO
of the company does not respond appropriately to the evidence, the attorney
must report the evidence to one of the following: (1) the audit committee of
the board of directors of the company; (2) a committee of independent
directors; or (3) the full board of directors.[37]
A subordinate
attorney complies with the rule if the attorney reports the evidence to his or
her supervisory attorney, who is a senior attorney charged with actually
directing or supervising the actions of the subordinate attorney who appears
and practices before the SEC.[38] An attorney (such as an assistant general
counsel) who operates under a chief legal officer’s supervision or direction is
not considered a subordinate attorney under the rules. Such an attorney must go beyond reporting to
a superior attorney and comply with the full panoply of rules.[39]
E. QLCC
As in the
proposed rule, the final rule permits an issuer company alternatively to
establish a QLCC as a procedure for reporting evidence of a material violation.[40] The QLCC must consist of the following at a
minimum: 1) one member of the issuer’s audit committee or an equivalent
committee of independent directors, and (2) two or more independent board
members.[41] Among other things, the QLCC has
responsibility to recommend that an issuer implement an appropriate response to
evidence of a material violation.[42]
Reporting
to a QLCC satisfies an attorney’s obligations with regard to a material
violation under the rule in the same manner as does the procedure for reporting
to corporate officers and directors noted above.[43] Because of this provision, one can expect
liability insurers to exert market and moral pressures on corporations to form
QLCCs.
F. Who is Covered by the Rules
The rules
cover attorneys providing legal services to issuer companies. The rules apply to any attorney,
in-house or retained, who appears and practices before the SEC in
representating an issuer.
The rules also enumerate, without limitation, the ways
by which an attorney might “appear and practice” before the SEC: (1)
transacting any business with the SEC; (2) representing a public company in an
SEC administrative proceeding or in connection with any SEC investigation; (3)
providing advice with respect to U.S. securities laws or the SEC’s rules
regarding any document that the attorney has notice will be filed with the SEC
or submitted to the SEC (or incorporated into any SEC filing or submission),
including providing such advice in the context of preparing such document; or
(4) advising a public company as to whether information or a writing is
required under the U.S. securities laws or the SEC’s rules to be filed with the
SEC or submitted to the SEC (or incorporated into any SEC filing or
submission).
Foreign
attorneys who provide legal advice regarding United States laws are covered by
the rule to the extent that they appear and practice before the SEC, unless
they provide such advice in consultation with United States counsel. Foreign attorneys who are not admitted in the
United States, and who do not advise clients regarding United States law, are
not be covered by the rules.
VIII.
Disclosures of Confidences
Certain
provisions of the new rules alter traditional attorney obligations of
confidentiality to a client. With
respect to the following disclosures, the rules allow an attorney, without
the consent of an issuer client, to reveal confidential information to the SEC
related to his or her representation to the extent the attorney reasonably
believes the disclosure is necessary.
A.
“Self Defense” Disclosures
An
attorney may disclose confidential information related to his or her appearance
and practice before the SEC in representing an issuer to defend against charges
of attorney misconduct. This right is
similar to the “self-defense” exception contained in the Model Rules and state
ethical rules. [44]
B.
Disclosures to Prevent Fraudulent or
Substantially Injurious Illegal Acts
Subsection
205.3(e)(2) allows an attorney to reveal confidential information to the SEC to
the extent necessary to prevent the commission of an illegal act which the
attorney reasonably believes will result either in perpetration of fraud upon
the Commission, or in substantial injury to the financial or property interests
of the issuer or another. Similarly, the attorney may disclose confidential
information to correct an issuer’s illegal actions if they have been advanced
by the issuer’s use of the attorney’s services. Furthermore, although there is
no mandate, this rule allows an attorney to disclose confidential information
relating to his or her appearance and practice before the Commission in
representing an issuer “to the extent the attorney reasonably believes [it]
necessary (1) to prevent the issuer from committing an illegal act that the
lawyer reasonably believes is likely to result in substantial injury to the
financial interest or property of the issuer or investors; (2) to prevent the
issuer from committing an illegal act that the lawyer reasonably believes is
likely to perpetrate a fraud upon the Commission; or (3) to rectify the
consequences of the issuer’s illegal act in the furtherance of which the
attorney’s services were used.”[45]
This
rule is not as dramatic or unprecedented as some critics have argued. Thirty-seven states permit an attorney to
reveal confidential client information in order to prevent the client from
committing criminal fraud.[46] Three states require such disclosures under
defined circumstances. Among these, New
Jersey requires an attorney to reveal
confidential “information relating to the representation of a client” to “the
proper authorities,” if the lawyer reasonably believes the conduct will result
either in perpetration of fraud or in substantial injury to the financial or
property interests of the issuer or another.[47] The Wisconsin rule is the same as that enacted
in New Jersey, but makes no reference to “proper authorities.” [48] Florida requires lawyer disclosure as “the
lawyer reasonably believes necessary . . . to prevent a client from committing
a crime.” [49] Delaware has recently adopted a new Rule 1.6
that mirrors the ABA Ethics 2000 proposals.[50]
C.
Disclosures Pursuant to Confidentiality
Agreement with the SEC
Subsection 205.3(e)(3) in the Proposed Rule has been
withdrawn.[51]
D.
Sanctions for Violations of the Rule
A
violation of any rule issued by the Commission under the Act constitutes a
violation of the Exchange Act.[52] Accordingly, a violation of the rule subjects
the violator to all the remedies and sanctions available under the Exchange
Act, including injunctions, cease and desist orders, and officer and director
bars for attorneys who are officers and directors. Furthermore, a violation of
disciplinary rules in one jurisdiction is routinely reported to other
jurisdictions where the attorney is admitted, usually resulting in disciplinary
proceedings in those jurisdictions as well.
E. Mandatory Withdrawal/Notice
The most
controversial of the proposed rules regarding “noisy withdrawal” were not
adopted by the SEC. Proposed section
205.3(d), the noisy withdrawal provision, not only authorized, it required
outside attorneys to withdraw and notify the SEC of the withdrawal because of
“professional considerations,” and to disaffirm any violative document or
filing. Neither of those provisions would be triggered if a report of a
material violation had been made to a QLCC. [53] Under the final rule, the only required notice
to the SEC concerns a QLCC. In the
event a majority of the QLCC determines that the company has failed to take a
recommended remedial action, the QLCC must notify the SEC.[54]
F. Federal Preemption
The new
Rule does not preempt ethical rules in United States jurisdictions that
establish more rigorous obligations than those imposed under the Rule. At the
same time, the SEC reasserted that its rules prevail over any conflicting or
inconsistent laws of a state or other United States jurisdiction in which an
attorney is admitted or practices.[55] The Rule purports to supplement state ethics
rules and is not intended to limit the ability of any jurisdiction to impose
higher obligations upon an attorney so long as they are consistent. A mandatory
disclosure requirement imposed by a particular state would constitute an
additional requirement that is consistent with the Commission's permissive
disclosure rule.[56]
G. Private Causes of Action for Violating the Rules Against
Attorneys
The rules
neither impose a fiduciary duty upon an attorney to the issuer’s shareholders,
nor do they create a private cause of action.[57] Authority to enforce compliance with the
rules is vested exclusively with the SEC.[58]
H. Effective Date
The final rule became effective
August 5, 2003.
VIII.
Conclusion
The
political and fiscal issues implicated by having to fund lawyer discipline at
the federal level through a Republican Congress are daunting. The process and labor necessary to keep the
system running have become increasingly expensive at the state level. That Congress intended to federalize lawyer
discipline is difficult to take seriously.
Otherwise publicly committed to fiscal restraint, limited federal
government, and a view of federalism that defers to states’ rights, how does
such a Congress justify the scope and cost of the resulting bureaucracy? No
doubt, these issues will generate critical debate beyond the provisions
themselves.
Client
confidences will and must be preserved. Indeed, the SEC moderated its position
on several of the more controversial suggestions more extensively than the ABA.
As it has done historically, the profession will preserve its core values while
adapting them to current social needs.
Society is better served when lawyers can advise their clients on how to
conform to the law. That will occur, however, only if clients can confide in
their lawyers without fear that those confidences will be reported to
governmental agents or the news media.
The current
furor is certainly more than a tempest in a teapot. Although the technical legal applicability of
the new rule is narrow, the effect of the proposed regulations likely will be
broader since the issue of client confidences has now been raised, and will be
resolved by each jurisdiction as it approaches the issue. The debate incited by these regulations will
continue -- within the profession, within the ABA, and within each state that
regulates lawyers through its Rules of Professional Conduct. This debate will constitute a salutary
development if it generates public discussion and a re-examination of the
lawyer’s role in society. That role has
been devalued and degraded much of late by a constant refrain of lawyer bashing
from government leaders and the popular media.
Begun publicly by Edwin Meese, it has devolved into endless, mindless,
and mean-spirited lawyer jokes and a crass disdain for the rule of law and the
judicial system among many politicians, business professionals, and some
business school teachers whose own role in contributing to the scandals is
worthy of examination.[59] If lawyers respond to the challenge of
reasserting their community value with the same energy and clarity of purpose
they have brought to these proposals, however, the public perception of their value
may appreciate as well.
ENDNOTES