30 October 2019

General counsel in the discomfort zone

Research reveals a third of in-house counsel are asked to advise on matters that make them feel ethically uncomfortable.

As companies increasingly try to balance profit and purpose, creating potential for in-house lawyers to play a crucial role, new research suggests the field of ethics can be tricky but also fundamental.

“Uncomfortable ethically”

Almost a third of in-house lawyers get asked to advise on matters that make them morally ill at ease, according to a research report released by legal service provider Lawyers on Demand (LOD) featuring a survey conducted by academics at University College London and Exeter Law School. A survey of 400 in-house lawyers found that 32 percent were sometimes asked ‘to advise or assist on things that made them uncomfortable ethically’, while 45 percent were asked to advise on proposed company action which was ethically debatable. Some 80 percent of in-house lawyers also agreed that their legal department had been criticised for inhibiting or slowing commercial decisions. Many in-house lawyers admitted to researchers they were either ‘hazy’ or ‘sometimes very hazy’ on the content of the SRA handbook. The study cites non-disclosure agreements as an example of where lawyers had ‘perhaps been too quick to see the legal challenge facing their employers as one of risk to the employer’.  According to LOD, the results highlight the 'tightrope' in-house lawyers tread when representing the best interests of their business while trying to uphold ethical standards. Simon Harper, co-founder of LOD, said “The role of ethics and wider purpose seems finally to be front of mind for businesses, from our very largest to those in growth stage, and increasingly what customers care about too.” He added, “For many lawyers, this is a reminder of why they chose their vocation in the first place and so they’re well positioned to put themselves right in the middle of this welcome trend.”

Ethical bright spots

The research report, entitled “Which way is the wind blowing?”, was carried out by law professors Richard Moorhead and Steven Vaughan. The authors acknowledged the difficulties in-house lawyers face in trying to be ‘team players’ who are not risk averse, while at the same time being expected to uphold ethical standards, starting “To succeed, their solutions must be both legally acceptable and organisationally useful.” However, the authors clarified that a lawyer’s professional rules were clear that, where a conflict between a client’s interest and the public interest in the administration of justice existed, the latter should have priority. The research found no correlation between size of team and ethical pressures, although those working in the public sector reported more ethical pressures than those in business. The report concluded that the more commercially minded the in-house lawyer, the less likely they were to perceive problems as moral ones. The authors said they found the data they collected “paints a rather gloomy picture”, but remain optimistic having seen some ethical bright spots in the research. Mr Harper concluded, “By ourselves, lawyers aren’t the solution to any such ‘crisis in capitalism’ that businesses might be perceiving.” The report can be downloaded here.