Katherine Franke argues that lawyers are partly responsible for the financial misdeeds protested by OWS (HT Leiter):
Implicit in the OWS protests is a condemnation of an approach to lawyering that regards all legal rules simply as the price of misconduct discounted by the probability of enforcement* * *
In recent years we have seen the increased blurring of the boundary between law and business, between the lawyer and the businessperson, and between legal and business education. Too often, being a “good lawyer” has meant taking on the role of consiglieri, providing effective legal cover for otherwise borderline, or worse, practices. Effective and ethical representation of business interests does not relieve lawyers of responsibility for the harmful effects on others created by our clients’ actions, taken pursuant to our counsel. * * *
Servicing law school debt after graduation drives many of our students to highly compensated legal work for the financial services industry. * * *
The widely held public outrage at corporate overreaching given voice in the OWS protests reminds us of the degree to which the legal profession has fallen short of its traditional role as “republican” citizen, obliged to act as guardian of public interests even when — indeed especially when — representing private interests.
Without getting deeper into the psyche of the Occupiers, let’s grant that Wall Street’s improvidence was a cause of its Occupation and that lawyers were partly to blame for this improvidence. (I hope Franke will accept the friendly amendment that the lawyers worked for the government as well as the banks.) What should we do about this?
For starters, and recognizing that it has become obligatory to drag the high price of legal education into everything, I don’t think the answer to this particular problem is getting lawyers out of “highly compensated legal work” in finance. (Indeed, not that many of today’s law school grads are even being tempted by such jobs.) Nor does the answer lie in simply hoping that lawyers will feel more obliged to “act as guardian of public interests.” Indeed, the latter strategy is a prescription for their irrelevance.
Rather, the answer is training lawyers to get more into business and finance, where they can be respected and full-fledged participants in business decisions. Law schools don’t adequately train lawyers on the complex financial instruments and deals they’re being called to advise on. Although lawyers may come to law school with this knowledge or learn it after they leave, law school generally doesn’t train them to integrate financial expertise with law practice. For example, they may understand how a deal works, but not necessarily what material facts about the deal need to be disclosed, or when the transaction comes too close to the regulatory line. And even if they might have such knowledge, they need to be able to speak the client’s language in order to be sure of being listened to.
Integrating lawyers more fully into business should make businesses in and out of finance more rather than less responsive to legal considerations. In retrospect it’s clear that the lawyers who didn’t fully advise their clients of the legal risks inherent in their complex deals and securities didn’t just let the public down — they didn’t serve their clients’ interests.
Not every deal or new security that eventually blows up should have been squelched by a lawyer. Risk can be healthy and perfectly legal. Anyway, clients will tend to ignore legal advisors who just say no rather than try to find ways to get things done. But the right course of action is often unclear. Finding it requires matching high-level business expertise with knowledge of black-letter law and underlying policies.
Taking the lawyers out of finance or blunting their authority by turning them into preachers will not get the results Franke hopes for.
