Where Were the Lawyers? A Behavioral Inquiry Into Lawyers' Responsibility for Clients' Fraud
Where were the lawyers? Perhaps rhetorical, even sarcastic, this question is being asked all too frequently after large financial frauds. "[W]ith all the professional talent involved," mused Judge Sporkin in a decision growing out of the Lincoln Savings & Loan scandal, "why [didn't] at least one... [blow] the whistle to stop the overreaching that took place in this case[?]" The Lincoln matter alone ensnared a number of the country's most prominent law firms," and many others have been blamed in comparable, if less notorious, banking delicts. Clark Clifford's indictment in the BCCI proceeding has extended the dark shadow even further up the reputational hierarchy.
The banking problems are only the most recent problems that have provoked the question of complicity and generated extensive, emotional counterreaction by the bar. SEC v. National Student Marketing Corp. in the 1970s and In re OPM Leasing Services, Inc. in the early 1980s were focal points for self-examination, weighing heavily upon the American Bar Association's reformulation of its ethical rules in 1983. Attorney involvement in insider trading also has been quite visible.
In all fairness, of course, we do not know whether a serious problem really exists. The scandals, publicized more through indictments and allegations than legal findings of complicity, are highly salient, vivid bits of information that naturally skew our impressions. We lack actual base-rate data establishing the incidence of complicity, or documentation of the offsetting events when attorney involvement has somehow deterred client misconduct. Still, the apparent incidence of complicity must trouble both the public and the profession. This Article explores the concept of observed lawyer complicity without making any claims about its extent. It focuses less on the normative issue-what rules should govern lawyer conduct-than the behavioral one-why the apparent involvement might be so extensive.
The Article takes the behavioral approach for two reasons. First, under- standing the forces underlying lawyers' behavior is interesting and important in and of itself, for it has received relatively scant attention in the literature. Second, behavioral insights can help us gauge the likelihood that particular changes in the prevailing legal regime may or may not be effective.
Donald C. Langevoort,
Where Were the Lawyers? A Behavioral Inquiry Into Lawyers' Responsibility for Clients' Fraud,
46 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol46/iss1/2