The obligations of in-house counsel are weighty and difficult
The fact in-house lawyers operate in a continual conflict of interest is clear. Our livelihoods are potentially at stake each time we decide we need to challenge either the conduct or the practices of those with whom we work — particularly our CEOs or our boards. Even where we don’t expect that we will be fired, conflict with our colleagues is difficult and stressful.
However, challenge our clients we must. In Ontario, we are required by the Rules of Professional Conduct to confront our clients not just when they act fraudulently, criminally, or illegally, but also when they act “dishonestly.” Such misconduct (by commission or omission) demands we advise the conduct is dishonest, illegal, or fraudulent, report up the ladder, and withdraw. Withdrawal may include resignation.
It is also clear from the Rules that in-house lawyers are expected to consider and protect the public interest from organizational misconduct. The notes to Rule 2.02 state:
“These rules recognize that lawyers as the legal advisers to organizations are in a central position to encourage organizations to comply with the law and to advise that it is in the organizations’ and the public’s interest that organizations do not violate the law. Lawyers acting for organizations are often in a position to advise the executive officers of the organization not only about the technicalities of the law but about the public relations and public policy concerns that motivated the government or regulator to enact the law. Moreover, lawyers for organizations, particularly in-house counsel, may guide organizations to act in ways that are legal, ethical, reputable, and consistent with the organization’s responsibilities to its constituents and to the public.”
In-house lawyers should be held to a very high standard
While it may be discouraging to consider the weight of our obligations, in-house lawyers should have it no other way. It is these very standards that preserve our status as legal professionals and prevent us all from being written off as the lackeys or hired guns of our organizations.
It is possible to meet these obligations. At a minimum, it takes self-awareness, including the ability to recognize the effects of the conflict of interest. You have to ask whether you are behaving differently because you might lose your job over this particular issue. If the answer is yes, you have to have the courage to mitigate the effect of that fear, and to act in spite of it.
Ultimately, you have to have the courage to resign with all of the consequences that entails. While it is possible to meet the challenge, being an ethical in-house lawyer is no easy task.
It is not all doom and gloom
I recently attended a conference for Canadian chief legal officers. During a session on crises, conflicts, and career-limiting moves, we discussed some interesting and difficult fact scenarios and how to deal with them. Emerging from the dialogue and my reflections on it is the following guidance to help in-house counsel better navigate the difficult ethical issues we face on a regular basis:
Take the long view
Organizations often hire in-house counsel because they recognize a need for change and improvement in the way they do business. Changing an organization is a difficult challenge and it is one that is never completed overnight. Changing policies and practices is one thing but changing employee attitudes and behaviour is entirely another. To effect change over the long term, it is important to maintain relationships to encourage colleagues to come to you with the information and questions that allow you to do your job. Approach the project of effecting cultural change with the longer term in mind.
It’s OK to pick your battles
In the same vein, remember not all ethical misconduct is created equal and it is absolutely fine to deal with different misconduct differently and some not at all. While more serious misconduct may require head-on confrontation, less serious misconduct can be dealt with through education and discussion and in ways that don’t single out individuals but focuses on changing the culture and the environment. Setting priorities will help you decide which things you will take on and which you can deal with later.
Don’t impose personal opinions on the organization
While I am a big believer that it is crucial to work in an environment in which you can operate in keeping with your own values and conscience, it’s important not to forget your personal opinion about what is ethically right is not necessarily the final word on what is ethically right for an organization.
During our session discussions, Barry Fisher, vice president, general counsel, and corporate secretary at SAP Canada Inc. said, “Don’t forget to look in the mirror.”
At first I misunderstood him to mean “you have to be able to live with yourself when you look yourself in the eye,” but as he continued to speak, I realized he meant that your version of “right” isn’t necessarily the version of right. While it is clearly your job to ensure your organization operates honestly, ethically, and within the bounds of the law, you are not the ethical conscience of the organization. Before you provide advice, you are obliged to fully analyze an ethical situation from all angles and perspectives, just as you would a legal situation.
Don’t underestimate the power of your behaviour
In a competitive company culture in which high performance is demanded and there has been no policy ethics, it is easy for employees to get the message that ethics don’t matter and the expectation is employees should do what ever it takes to get the job done.
Sometimes all employees need is a cue that behaving ethically is expected and supported. The CLO is in a great position to do that simply by acting very consciously in an ethical way and by being clear that ethical considerations are an important part of the discussion. Conduct and advice that encourages ethical behaviour provides colleagues the direction and permission they need to act ethically and will effect positive change over time.