How culpable are external lawyers in corporate wrongdoing?

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In the midst of the US opioid epidemic, junior attorney Elise Maizel experienced a sudden crisis of conscience. “I was sitting on the 42nd floor of an office tower and feeling intensely guilty about whether corporate lawyers had played a role in the crisis taking place where I grew up.”

Maizel came from south-west Virginia, a rural area that had been ravaged by addiction. As a corporate lawyer, she wondered what accountability her profession owed when the likes of McKinsey, drug manufacturers, distributors and pharmacies eventually paid billions in settlements over business practices that had contributed to tens of thousands of deaths and even more shattered lives.

Maizel later left Big Law and is now a law professor at Michigan State University. In a recent paper, she asks: “[I]s there something about corporate lawyers and corporate lawyering in particular that helped to create and perpetuate the opioid crisis?”. She went on to explain why the answer, for her, is “yes”.  

The paper describes how norms of American legal practice, particularly the principle of “zealous advocacy” had been, in her view, corrupted to empower lawyers to both actively participate in wrongdoing and then most of the time escape sanction. She offers three case studies — set at Purdue Pharma, AmerisourceBergen and Walmart, respectively — where both internal and external legal and compliance professionals were central to wrongdoing in some part of the opioid crisis.

The financial culpability that is slowly being meted out over painkiller death and addiction has reached billions of dollars. Companies and even McKinsey have apologised for their work. The difference for lawyers is that they, for a variety of reasons, get to maintain plausible detachment even when they are knee-deep in wrongdoing. Maizel believes this must change. But such a shift would come at a moment when lawyers, remarkably, are more powerful than ever in not just rendering defensive advice but driving corporate decision-making.

Zealous advocacy can be the central value of an adversarial legal system: each side gets aggressive representation and the parties can cut a consensual deal among themselves or otherwise have a neutral judge pick a winner among competing arguments. Maizel argues that lawyers working for companies are inadvertently mistaking who their client is and to whom their duties are owed: to her, lawyers only work for the inanimate corporation itself, not its board and managers.

As such, she says lawyers can and must choose to resist enabling misconduct. Failing to do so then cannot be chalked up to zealous advocacy. Rather she wants the idea that wayward lawyers are culpable of “disloyalty” to the corporate entity to make a comeback. “‘Zealous advocate’ sounds pretty cool, Whereas ‘disloyal’ is ugly and not aspirational,” Maizel told me.

A consequence of the status quo is that law firms face little reputational damage despite being on the scene of scandal. Maisel tells the tale of the drug distributor AmerisourceBergen. One of its key outside law firms Davis Polk & Wardwell in 2010 signed off on its clients’ compliance programme that was intended to ensure that painkillers did not fall into the wrong hands (although it did make recommendations for improvement). Amerisource Bergen eventually agreed to pay billions to settle charges of misconduct. 

Davis Polk, a longtime counsel to Big Tobacco, later got the assignment to negotiate a settlement on behalf of opioid victims with the founders of Purdue Pharma, the Sackler family.

For their part, the Sacklers had no problem finding good counsel. Members of the family have been represented by the supposedly civic-minded white shoe firms Paul Weiss and Debevoise & Plimpton, the latter assigning to the Sacklers star partner Mary Jo White, the former chair of Securities and Exchange Commission and New York federal prosecutor. 

There was a time when lawyers were largely behind-the-scenes players who offered cautious counsel. Now, lawyers are being paid, in some instances more than $20mn a year, like investment bankers. With that kind of money and influence, clients will demand more results, not restraint, from their advisers. And it seems the temptation to push the envelope is greater than ever. 

In the meantime, Maizel writes that law students should be primed to understand that a career as a corporate lawyer requires navigating these tensions. “They should be taught that zealous advocacy for a corporate client is, sometimes . . . a fight for public-regarding interest in legality emanating from the corporate charter itself,” she writes.

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