Law School Confidential
from
July/August 2005
by James Burnett
If he hadn’t pursued a more erudite calling, Andrew Perlman might have made a decent standup comedian. He’s equally skilled in shtick and deadpan, and he knows how to lean into punch lines for maximum effect. Above all, Perlman is shameless in pursuit of a laugh, a quality that serves him well in his chosen career. He is a legal scholar specializing in ethics and professional responsibility, which he teaches at Boston’s Suffolk University Law School. He also taught professional responsibility last semester at the Boston University School of Law.
One evening in February, Perlman’s BU lecture turned to the issue of a lawyer’s duty to keep client information confidential. About 60 students were spread out among the classroom’s four horseshoe-shaped tiers, and the queries Perlman posed were met mostly by the clicking of fingers against laptop keyboards. One woman surreptitiously alternated between taking notes and sending instant messages.
Undaunted, Perlman forged ahead with his PowerPoint presentation on Meyerhofer v. Empire Fire & Marine Insurance Co., a 1974 ruling frequently raised to highlight situations in which attorneys can spill a client’s wrongdoing to outside authorities to protect themselves. In the case, a law-firm associate named Goldberg learned that his client, Empire, had withheld unflattering information from a stock prospectus. When he informed his superiors of the omission, they instructed him to mind his own business. Goldberg resigned and told the Securities and Exchange Commission what he knew. Later named as a co-defendant in a class action against Empire, he turned over his SEC affidavit to the plaintiffs’ attorneys and was ultimately dismissed from the case.
“Think about the courage it would take to tell the partners supervising you that their conduct was illegal. Think about how difficult it would be—when they say, ‘No, it’s okay, don’t worry about it’—to quit and then go to the SEC,” Perlman said to his class. “The text doesn’t really spell this out, but think about it: This is a pretty heroic figure. So heroic, I looked him up on the Internet and found his picture.”
With a click of the computer mouse, he played his rim shot. A life-size photo of a large, bald, tattooed, glowering, Speedo-wearing man flashed onto the overhead projector: Goldberg, all right—not the lawyer (first name Stuart) but the professional wrestler (Bill). Perlman suddenly had his students’ attention.
Why the gimmickry? Because aspiring attorneys’ perceptions of their mandatory professional-responsibility course have traditionally ranged from indifferent (“It’s completely the course that people blow off and don’t take that seriously,” says one recently minted associate at a prestigious Manhattan firm) to mildly irritated (“Going in, I thought, ‘I don’t need anybody to teach me ethics,’” says a third-year student at the University of Virginia. “The very idea that law school thought I did was almost insulting”).
For its part, the legal academy has accorded the field little more gravity. But in the wake of the corporate frauds that have played out over the past four years, legal ethics is acquiring new relevance on law school campuses. A few minutes after Perlman displayed his gag slide, the class discussion segued to Enron. For the first time all night, his students had questions for him.
Enron and the resulting Sarbanes-Oxley regulations are discussed these days in various law school courses. “It’s probably come up in no less than four classes,” says third-year Columbia Law student Jason Quintana, citing his courses in corporations, secure transactions, bankruptcy, and corporate governance. “We might go over the financial structures the companies set up, why they were dubious and so forth and so on.” But because those courses cover countless statutes, the multibillion-dollar misdeeds are only squeezed in as footnotes.
The scandals have had a bigger impact on the professional-responsibility classes every student must complete to graduate. These cover the American Bar Association’s Model Rules of Professional Conduct, which have changed significantly enough since 2001 that Perlman’s pupils are trickle-down victims of Ken Lay & Co. It seems that Enron cooked their books too: The old editions of the texts Perlman assigns are so outdated that the professor insists students buy the newest, most expensive editions.
In one of those textbooks, The Law and Ethics of Lawyering, students encounter an entire section on corporate malfeasance that did not exist in previous editions. “What Enron led us to do was decide we needed a whole chapter,” says George Cohen, a professor at the University of Virginia School of Law who collaborated on the popular volume with Roger Cramton, professor emeritus at Cornell, Geoffrey Hazard of the University of Pennsylvania, and Boston University’s Susan Koniak. “If students can start to see the patterns and recognize that these frauds have very similar ways in which they’re perpetrated, they’ll be better equipped to avoid participating in them.”
Cohen adds, “Usually what the bar wants to talk about is lawyers’ becoming whistleblowers or policemen, being put in positions they’re not comfortable with.” The ABA recently revised its Model Rules to permit, but not require, attorneys to notify the authorities of client wrongdoing, insisting that going any further would jeopardize the attorney-client relationship. “Our view,” says Cohen, “is to take the debate away from disclosure. What we stress is that you don’t help create the fraud in the first place.”
To illuminate those lessons, many of the legal ethicists on campuses prefer concrete M.B.A.-type case studies to the kind of esoteric what-ifs that might come up in a freshman philosophy seminar. With court documents and regulatory filings immediately posted online, they have plenty of facts to use. “There’s been incredible access to information as to what went wrong,” says Suffolk law school professor Joseph Franco. “It’s very eye-opening for students, and especially professors, to be able to go over a scandal like Enron in slow motion.”
From the teachers’ point of view, it also helps that blue-chip law firms like Vinson & Elkins and Kirkland & Ellis worked for companies implicated in the transgressions. That allows professors to drive home one of their most important messages: No matter how esteemed the employer, no matter how upstanding the individual character, any young attorney can find himself one billable hour away from stumbling into a moral thicket. “I’ve been teaching for 37 years,” says Andrew Kaufman, a professor of legal ethics at Harvard Law. “When I started, I didn’t have the kind of sensational examples that bring this awareness home to students. I fought against the students’ notion that the only people who had to be concerned were the people scrambling in their own small private practices, not the people in the big law firms. I said, ‘You’re wrong,’ but I don’t know if students really believed me. I don’t have to rant and rave today.”
As Joyce Saltalamachia, deputy director of the Association of American Law Schools, points out, “Ethics in some way or another has always been a part of a lawyer’s training, but it was made into a separate part of the curriculum after Watergate.” With J.D.’s as culpable in that skullduggery as Nixon’s plumbers, the ABA instituted the responsibility classes as part of its campaign to restore confidence in the profession. And in the mid-1980s many state bar associations added one more batch of multiple-choice bubbles to the battery that attorneys-to-be must fill in, requiring law school graduates to pass the Multistate Professional Responsibility Examination to get permission to practice in their jurisdictions.
The professors who teach professional responsibility have traditionally ranked in the lower depths of legal academia’s scholarly strata. “It’s considered the janitor position of the faculty,” says Susan Koniak, a co-author of The Law and Ethics of Lawyering. Teaching the Model Rules, she continues, “is like teaching the driver’s manual. It doesn’t take a lot of intellectual agility.” She proudly notes that in her classroom the rules are treated as only a small part of the broader set of knowledge attorneys need to conduct themselves honorably. Her course draws upon everything from IRS regulations to the criminal code.
But the importance of ethics is beginning to be appreciated in academia. “I took what was one of the first ethics classes, and honestly, it was just to pass the test,” says Joyce Saltalamachia. “Now it’s a more relevant and immediate topic, because students can see the issues playing out on the front pages.” Adds professor Andrew Perlman, who studied law at Harvard, holds degrees from Columbia and Yale, and clerked for a federal judge: “The more hard law there is out there, the more seriously fellow academics take this subject. Sarbanes-Oxley was a boon to us.”
“When the scandals hit,” Saltalamachia says, “it was natural for people to look around for authorities, and there were ready-made experts in the legal scholars who’ve dedicated their careers to studying this and advocating for tighter standards.” Shortly after Enron’s sins were made public, Richard Painter of the University of Illinois College of Law wrote to the SEC, urging it to enforce its regulation that obliged a lawyer who came across apparent securities violations to report the finding to the client’s board of directors. Later, while the SEC circulated the proposed rules for attorney conduct that it had drafted in accordance with Sarbanes-Oxley, 55 law professors from across the country signed a brief that Cohen, Koniak, and Cramton put together, endorsing the agency’s so-called noisy-withdrawal provision. At the same time, they also criticized the SEC for neglecting to set straightforward, objective standards that would compel lawyers to report evidence of a serious breach of the law. (The proposal, now stalled, would have required an attorney who went up the chain of command with a warning about wrongful behavior but failed to remedy the problem to drop
the client and tip the SEC about the resignation.) Now ethics professors have shifted their efforts to a new front, quietly lobbying in favor of “aiding-and-abetting liability for law firms”—a move that would allow shareholders to sue attorneys accused of facilitating corporate fraud.
To influence law students, many ethics professors believe there is more they must accomplish. Perlman says he hasn’t “sensed a phenomenon in law school that they’re seeing in business schools”—that is, an urgency to substantially bulk up the curriculum on corporate morality. One small suggestion has been for law schools to borrow a scare tactic employed by the business school at Dartmouth, which brings in former white-collar criminals to lecture on the consequences of breaking the law. Says Harvard Law’s Andrew Kaufman: “A lawyer who goes to jail, that’s something law students ought to know about.”
Another idea, Perlman says, is to expand the use of “clinics that offer students the chance to engage in lawyering under the supervision of experienced practitioners, with time to reflect on the many ethical issues that can arise. The problem is that clinics require a lot of resources, so most schools are far from offering them to all of their students.”
Even those changes would fall short of a model that Stanford professor Deborah Rhode has called for. In a speech she delivered in 1998 while serving as president of the Association of American Law Schools, Rhode said: “Ethics is a central constituent of all legal practice and needs to occupy an equally central place throughout the law school experience. . . . Over a hundred studies evaluating ethics courses have found that well-designed curricula can significantly improve capacities for moral reasoning.” Today most students spend just a few weeks in the care of the ethics professors; at Columbia, for example, students can take “responsibility” as a one-week crash course.
“Any law student who’s going into practice needs to be acutely aware that they’ll need to manage clients’ expectations as to what you can and can’t be doing, not only to be an effective attorney but also to ensure the integrity of the profession itself,” says Columbia Law student Jason Quintana. “But that’s not really internalized until you spend a summer working on transactions where an ethical issue could come up. Until then, it’s all really hypotheticals.”
Indeed, says Kaufman, “we’re teaching not what am I going to advise somebody else, but what am I going to do myself. Those are the sorts of things that can keep you up at night.”
The ethics professors interviewed for this article see the best chance for change—and probably their most critical mission—as redefining what’s regarded as acceptable behavior in the office towers. “Lawyers are very influenced by the culture they practice in,” Cohen says. “We can talk about what we think the problems are until we’re blue in the face. But when you have partners who say, ‘This is how we do things at Firm So-and-So,’ and our graduates say, ‘But Professor Cohen said I should do this,’ that’s not going to be much of a formula for success in their careers.”
Even if most students will have long forgotten their professional-responsibility homework by the time it applies to their practices, the courses may still perform a crucial role in producing more virtuous lawyers. Referring to Enron, Perlman asked his BU students, “Why would lawyers so blatantly ignore the facts and stick their heads in the sand?” He didn’t wait for a reply. “Lawyers that engage in this stuff aren’t necessarily evil. They’re like you. These are the considerations they’re making: There’s a lot of business at stake. Putting food on the table. Keeping people employed. I’m not trying to justify what they did, but I want you to understand this: The purpose of professional responsibility is not to teach you to be good people. It’s to teach you to recognize the pressures you can face, so you can understand and resist them.”
Perlman continued, “So why else would things like this happen?”
“Enron was a big client,” a student ventured.
“And why else would lawyers do something that stupid, aside from the fact that it was a large client? Could it maybe affect their reputation, their ability to bring in other large clients? What are you trained to do?”
Again Perlman’s query was rhetorical.
“You’re trained as advocates to come up with the best arguments, to be as creative as possible,” he said. “That training you receive in law school creates the mind-set among lawyers that if you come up with a cockamamie argument that this is legal, or possibly okay, then you’ve got an obligation to do it for your client.”
Catherine Gellis, a second-year student, spoke up: “So your sense of omnipotence can get carried away.”
After class Gellis said, “It’s really scary that you could end up in so much trouble without being a bad person.” She slung her heavy book bag over her shoulders. “I went from ‘Gosh darn it, I have to take this course’ to it being one of my favorites,” she said. “It really opens up my mind and makes me think.” No teacher could ask for more.
