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A Lawyer's Duty to Remain Silent and Right to Speak out Concerning Client Misconduct

Paul J. Schlauch, Melisa Meitus, Mining and Oil and Gas Law, Development, and Investment - Book 1 (2007)

The spate of corporate scandals in the United States in the late 1990s and the early part of this decade -- Enron, WorldCom, Global Crossing, HealthSouth and others -- that rocked the financial markets and called into question many aspects of corporate governance, also brought to the fore once again questions relating to the proper role of lawyers. The demise of these companies was widely and properly viewed as being due primarily to the malfeasance of accountants and corporate officers. However, lawyers were also actively involved in many of the schemes that led to these failures.1

Do lawyers have the responsibility to be “gatekeepers” or “whistle blowers” for their public corporate clients whose past or impending conduct fails to meet applicable legal standards? At what point, if ever, do a lawyer's responsibilities to her profession and society outweigh her duty of loyalty to a client? A recent report of the Association of the Bar of the City of New York on the role of lawyers in corporate governance concluded that there were no clear answers to these questions and summarized the situation by stating that “there remains `controversy, confusion and uncertainty concerning a lawyer's duties' in the contexts relevant to this report.”2

It is clear that in certain circumstances, there can be significant tension between a lawyer's duty to represent his or her clie