Walking Ethical Tightrope

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WALKING THE ETHICAL TIGHTROPE: BALANCING THE RESPONSIBILITIES OF IN-HOUSE COUNSEL TO KEY STAKEHOLDERS

Legalwise Seminars Pty Ltd
12 November 2009

Sydney

By Steve Mark
NSW Legal Services Commissioner

“The moral ethos of managerial circles emerges directly out of the social context (of the corporation). It is an ethos most notable for its lack of fixedness. In the welter of practical affairs in the corporate world, morality does not emerge from some set of internally held convictions or principles, but rather from ongoing albeit changing relationships with some person. Since these relationships are always multiple, contingent, and in flux, managerial moralities are always situations, always relative.” Robert Jackall, MORAL MAZES: THE WORLD OF CORPORATE MANAGERS[1].

In 1988 Robert Jackall published a book MORAL MAZES: THE WORLD OF CORPORATE MANAGERS.[2] The book provides an in-depth sociological analysis of corporate managers in the chemical and textile industries in the United States in the early 1980s. Jackall’s goal was to examine bureaucracy in corporate America and to find out whether bureaucracy shapes moral consciousness. Jackall's inquiry, based on interviews with the managers themselves, found that these managers constantly adapt to the social environments of their organisations in order to succeed. In finding so Jackall discovered that ethics played a very small role in the business of management. The book also revealed that the most serious threat to integrity is the phenomenon of embeddedness, where people get embedded in their jobs and have trouble seeing beyond what is asked of them. Jackall found that a “what’s right in the corporation is what the guy above you wants from you” ideology pervades much of corporate life.

Robert Jackall’s conclusions about corporate America and the actions of management in 1988 resonate largely with the scandals involving in-house counsel in recent years.[3] From intentionally helping their employers engage in misappropriation to destroying information relating to in-house investigations, the actions of some in-house counsel of late signify the type of embeddedness identified by Jackall. It seems that some in-house counsel are just as vulnerable to adopting the same occupational morality as the managers with whom they work. But whilst managers in corporations may be able to act without repercussions (i.e discipline), in-house counsel cannot.

Unlike managers, in-house counsel are held to a higher standard of ethics by virtue of their position as members of the legal profession. As part of the legal profession in-house counsel occupy a privileged position in society, which carries with it certain ethical and social obligations. In-house counsel have a duty to their client - the organisation for which they work - but that duty is overridden by a primary duty to the Court and the administration of justice. In-house counsel also have an obligation, as do all legal practitioners to act morally and ethically. In lieu of the overriding duty to the Court and the obligation of morality, in-house counsel must thus reject a client’s requests if the requests undermine the primary duty to the administration of justice and the rule of law. Synonymous with this very role, is the role of “gatekeeping” and acting as a corporation’s moral conscience.

This paper will discuss the changing role of the in-house counsel from moral compass to moral conscience and beyond. The paper argues that the recently assumed role by in-house counsel of being the moral conscience of the corporation for whom they are employed and gatekeeper is clearly anchored in the public interest and is thus very much in tune with the overriding purpose of the legal profession – to protect the individual from the injustices of the state.

THE CHANGING ROLE OF IN-HOUSE COUNSEL

Over the past few decades there has been a considerable increase in the size and sophistication of the modern...
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