The business of lawyering and human rights?

The following text was prepared for a launch of the IBA’s Annex on Business and Human Rights, which provides very useful guidance to lawyers on how to implement the UN Guiding principles on Business and Human Rights. I talked to an abridged version of this last night.

I was asked to address the question of whether and why should lawyers pay attention to the UNGPs? My first response is many will not but some will want to lead. They will want to lead their area of law and lead their professional group. My own research on legal risk management, with Steven Vaughan, shows some in-house lawyers much more engaged in proactive leadership than others.

Proactive leadership involves horizon scanning for legal risk, and thinking much more broadly about the competencies involved in legal risk operations. These competencies involve lawyers thinking behaviourally and managerially about their jobs: how do they advise and manage complex organisations towards understanding, avoiding, and mitigating legal risk.

Put another way, a lawyer’s job is deeply contextual. Law is global, and law is human. That’s what makes legal risk so messy. And, if I can borrow from Ben Heineman’s books– Ben is a leading commentator as ex GC of GE – on the partnership guardian tension:  Leading lawyers see the need for financial, technological, ethical, societal, and political knowledge either personally or within their teams. This includes skills in institutional design and “global understanding” of the kind the IBA’s guidance promotes.  The guiding principles and the IBA’s guide reinforce and support leading lawyers in thinking forward in this way and thinking in a multidisciplinary way about what they do.

These leaders – and those advising the leaders – will increasingly ask their colleagues and the law firms they instruct to take this seriously: they will expect them to demonstrate both the competence (legal and other competences) and commitment to respecting human rights and minimising harm. These leaders and advisers may seek to influence but also contract in a broader group over time: through codes for external counsel, developing best practice, peer learning initiatives, and the like.  So the second reason for paying attention is, if lawyers are not going to lead, there is a decent chance they will be led and will have to get to grips with it that way. Although Robert McCorquodale’s research with Norton Rose Fulbright research and the Eversheds/RSG research suggests there is some way to go here.

And whilst this broader competence can be seen as part of the lawyer’s role as wise counselor, there is also a sense – rather underplayed in the document – that lawyers must also be responsible actors. I understand why the IBA is treading gently here –to lead the professional flotilla, it also needs to bring with it some of the slower boats. The basic model emphasised is that the lawyer advises, and the client decides, and human rights concerns should not inhibit the ability of clients to get advice.

It is a limited vision.

The idea that the lawyer advises and the client decides is not wholly wrong, but it does not always reflect what lawyers really do. Lawyers advise but they also shape the questions on which they advise, they shape the options which are given, they implement advice, and they take decisions which they – not their client – or not just the client – are responsible for.

Even advising can present problems. If we think of the Global Witness investigation into US lawyers, lawyers were seen to be willingly giving advice about how to obscure the origin of assets. The Global Witness ‘client’s’ story could have had human rights dimensions to it. And we can see clearly how simply giving advice has a dimension of professional responsibility to it.

But also imagine this…You think of an arguably lawful way of discouraging the regulatory and reputational scrutiny of a client’s supply chain – contrary to the the UN Guiding Principles: should you market this idea to would-be clients?

The idea that you would be advising and it would only be the client taking a decision is  – in this case – an exercise in responsibility shifting. It is not about independence nor is it about effective access to justice. It is about a lawyer’s own moral agency.

Often in-house lawyers get this. In our mapping the moral compass work, we looked at the orientations of in-house lawyers.  We found that the more strongly they saw their role as the lawyer advises and the client decides the more diminished was their moral compass. But we also saw that in general in-house lawyers saw a stronger responsibility to lead where the law is uncertain and to lead and influence their organisations towards an ethical orientation, doing the right thing, looking to the long-term sustainability of the business.  This attitude is present but it needs strengthening with practical tools. The IBA’s work will help here too: embattled, time poor in-house lawyers can look to the advice and tools being developed as a way of taking the lead. [See here for a report by BT on privacy as an example offered at last night’s seminar]

For now, business clients and in-house lawyers- rather than bar associations – will have to lead but I hope this document will help lawyers so inclined, or told by their clients to get with the programme, and will provide them with some tools to help. But because the ‘mere advisor’ view of the lawyer is inaccurate factually, and legally, professional reputation and leadership require, I think, a more rounded view of role and responsibilities.

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The Ethical Identity of Law Students

A paper I have done with Catrina Denvir, Rachel Cahill-O’Callaghan, Maryam Kouchakki and Stephen Galoob  as just been published in the International Journal of the Legal Profession. The abstract gives you a flavour:

This paper uses measures of values, moral outlook and professional identity to explore the ethical and professional identity of law students. We do so in two jurisdictions, surveying 441 students studying in England and Wales and 569 students studying in the US. The survey covers the first and final years of an undergraduate law degree and the postgraduate vocational stage in England and Wales, as well as students in all years of the JD programme in the US. We explore whether law students towards the end of their legal education have ethical identities predictive of less ethical conduct than those at the beginning of their legal education; whether law students intending careers in business law have values and profiles consistent with less ethical conduct than those intending to work for government or individuals; and what factors might explain these differences in ethical outlook. Our findings suggest that ethical identity is strongly associated with gender and career intentions. They also suggest weaker moral identities for students intending to practise business law. Ultimately, our findings support a conclusion that is more nuanced than the predominant theses about the impact of legal education on student ethicality which tend to suggest legal education diminishes ethicality.

The publishers make a limited number of downloads available for free. Click here if you would like to read the whole article. First come, first served.

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Advocates’ Ethical Capacities

Research that a team of us from UCL have conducted for the Advocacy Training Council (now the Inns of Court College of Advocacy) into the ethical capacities and advocates has just been published.The full report can be found here. The executive summary is as follows:

This research examines the ethical knowledge and skills acquired by new advocates.  It provides an evidence base to support improvements to ethical education and training.  It does so through a survey of 349 advocates (barristers, solicitors and some Chartered Legal Executive advocates) and 77 interviews with a sample of advocates.   Both the survey and interviews garnered views on ethical training and interviews assessed how new advocates would respond to a set of ethical problems.  The survey also considered advocates’ values and their influence on ethical decision making.

The interviews revealed a range of approaches to ethical problems amongst those we interviewed.  In broad terms, expert assessments suggested a range of problems common to all work areas covered. Those performing well demonstrated a strong knowledge of professional principles and rules and confidence in their application of those rules and principles to the problems we posed to them.  Such high performance was rare; even amongst the best interviewees there were generally some, albeit occasional or more minor, weaknesses on some questions.

Weaker interviewees did not spot most of the duties and principles engaged by the scenarios; failed to balance competing duties; and, showed a lack of confidence when considering implications for case handling.  The poorer interviewees tended to demonstrate such problems more frequently; tended not to recognise significant ethical dimensions to a problem; showed a stronger tendency to rely on intuitive responses to problems; treated ethical dilemmas as tactical not ethical problems; and/or, got relevant rules and principles wrong.   The poorest (a small minority) appeared to have a very limited grasp of ethical principles.  These problems were also reflected in our assessors’ views on training needs.

Interviewees did not perceive the basic knowledge deficits that our experts sometimes found, but did see a need for approaches that developed confidence in the application of ethical constructs to their practices.  Whilst there were concerns about the quality of vocational ethics education, survey respondents and interviewees felt that the professions needed to concentrate on improving ethics training once practitioners entered practice as pupils or trainees and that this improvement needs to be engendered across the life course of advocates’ careers.

Much of the professional focus on ethics training sees it as a rational, rule-based process; but our consideration of personal values in the report shows how professional decisions can be influenced by personal factors.  An advocate that better understands his or her own values may better understand and improve their own decision making. An understanding of the subjective elements of ethical decision making may merit inclusion in ethical training.  There is also a particular need for advocates to develop shared and ethically informed approaches to how to deal with uncertain fact situations and the inevitable tensions to be reconciled in ethical decision making.

This was a fascinating study to conduct. I would like to thank the Advocacy Training Council for commissioning it, the Legal Education Foundation for funding it, the advocates and judges who helped with the research, and all the advocates who participated in the interviews. That they were willing to do so is a testament to their professionalism.

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SRA SQE- Policy by polling

The SRA’s new consultation on the solicitors qualifying examination (SQE) is now out. I will read it with interest. I note with a little frisson of amused dismay that the SRA is praying in aid of its proposals polling from the general public. It appears, the general public were asked all of three questions:

  • As part of the process of qualifying as a solicitor, solicitor should have some training in the workplace.
  • Everyone should pass the same final exam to become a solicitor, regardless of the type of training they do.
  • I would have more confidence in solicitors if they all passed the same final exam.

To spell it out they have commissioned polling with leading questions, and which the public can be expected to have very limited insight into or informed view on. It’s not that the public’s voice is unimportant, it is just that if we asked a random group of strangers these questions we would almost always expect them to answer in the affirmative. Especially when, as appears to be the case here, they are not presented with any meaningful alternatives. If we had asked a different question: do you think the SRA should concentrate on checking the basics or on ensuring solicitors are genuine specialists, for instance, we might have got a different – perhaps more interesting – answer.

The data adds almost nothing to the debate and yet the SRA seem to be trying to close down the discussion somewhat by a rather self-serving appeal to public opinion. I say this as someone who is in favour of the importance of workplace training and sees merit in some degree of centralised assessment prior to admission. It is as if the SRA are trying to close their mind to debate on these issues by praying in aid public polling while saying to everyone else that they should open their minds to change. It is not an impressive position. And for all that they may huff and puff self-righteously about the public interest when critics point out the weakness of this data, I would wager that they know that this is not worthwhile research, but politics pure and simple.

 

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M&As: Contractual Artistry or Shonky Improv?

A fascinating recent paper from Robert Anderson and Jeffrey Manns on M&A drafting is up in draft on SSRNThe Inefficient Evolution of Merger Agreements. It performs textual analysis on 12,000 or so public merger contracts in the US. The authors map the family trees of these deal documents, showing where the precedents for each deal came from and how similar they are in terms of the words used.  The overall claim is that the process of precedent selection and development for M&A agreements is a rather improvised process based on haphazard choices made in the rush to get going on a deal, rather than from a basis of thoughtful calculation about ideal deal structures and contract drafting.

They suggest that:

  • It is predominantly prior firm connection, rather than similarity of the deals, that drives precedent selection in M&A deals.
  • Lawyers’ tend to use precedents that they are more familiar with or that relate to the particular client they are dealing with, rather than those that may be more readily adapted to the transaction at hand.
  • Lawyers add significant amounts of extraneous information to each deal and inadvertently retain deal-specific information from prior deals. [They call this random drift]

Quite a lot of the article appears to be (very interesting) speculation based on evidence that M&A agreements tend not to be based not on a limited number of common precedents or ancestors. A precedent is adapted, that adaptation might get used or it may be ignored, and another precedent used instead, which in turn may get adapted or discarded in the future. From the outside, it looks ad hoc: any M&A deal might be based on any one of a number of prior examples in the firm, and very few deals match closely with their precedent, suggesting no standard or core approaches. Similarly, the main factor which influenced precedent choice was whether the client had previously been party to a deal. A factor which might be thought to have some influence (the client’s industry) did not have much impact save in banking.  

The second element of the evidential case I would boil down to:

in the typical drafting process approximately 22,000 words are deleted or inserted in documents that are typically about 27,000 words in length. This fact suggests a remarkable level of editorial churning takes place throughout the drafting process and underscores the lack of standardization even within a given firm.

Whether this seemingly rather pragmatic approach to precedent choice, and the ensuing level of re-drafting, indicates a level of necessary artistry or a much more random, inefficient, even risky process of evolution is the central question the authors pose. The author’s make some space for alternative explanations for the data, and whilst I think there is some way to go to button down the explanations sufficiently with evidence, they make a good argument for their interpretations. The central claims have been well received by thoughtful practitioners critical of contractual practice (See Ken Adams here, and Mark Anderson here). I leave Anderson and Mann to summarise:

We use this innovative approach to explore whether transactional drafting is driven by a rational process that minimizes the cost of deal documentation and risk to clients or by an ad hoc process that increases billable hours and risk. We show that a high level of “editorial churning,” ad hoc edits that appear to be cosmetic rather than substantive, takes place in legal drafting. Over half of the text of merger agreements is routinely rewritten during the drafting process even though the substantive provisions of merger agreements have similar features. Significant variation exists among merger agreements even involving the same firm as there is no evidence of firm-specific templates or industry-specific templates in most cases. Lawyers appear to choose earlier merger agreements as deal templates based on familiarity with past deals rather than based on the economic needs of clients or cost mitigation. Our empirical findings provide strong evidence of significant (structural) inefficiency in the drafting process which raises costs and risk to clients.

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Principles, Rules, and Touting

There’s an interesting piece in the Gazette, about touting for criminal clients by Robin Murray.  It suggests all sorts of devious, corrupt and illegal practices are engaged in by some firms when seeking to gain clients (particularly at the expense of other firms). An attempt to blame this on policies whereby, “expensively trained lawyers are replaced by those without a professional background.” Training has been replaced, it is suggested, by largesse with trainers (of the just do it kind) and sometimes threats of violence. I’m not convinced. Not least because all of the behaviour, shocking as it is, was going on when I trained as a solicitor rather too many years ago. I would not be surprised though if the problems have got worse, particularly as legal aid margins have receded and competition has become more cutthroat.  I certainly read the article (and the one it links to by the same author) as suggesting problems have got worse: even being blamed for the closure of significant firms.

I found myself wondering how often this behaviour is reported to the SRA. Some of the comments in the stories suggest it is sometimes reported and that the SRA does not respond.  For the SRA not to respond to such issues would be very concerning indeed. This requires further exposure from those making the complaints and a response from the SRA I think also the SRA should be able to explain how many of its complaints concern this issue and what they have done about them.  I also wonder if individual members of the profession need to look at themselves and ask if it is reporting what is manifestly serious misconduct every time they come across evidence of it.  There is sometimes a professional reticence about complaining and this is abetted by a scepticism about SRA inaction. Even if evidence is inconclusive, the SRA can build up intelligence on the sources of the problem and think about how to tackle it.

The second issue of some interest if the debate about the proposed revised SRA Code of Conduct.  The debate is essentially over whether a shorter, more principle based Code is in the public interest.  Do we need all the rules in the Code to keep lawyers on the straight and narrow?This is the quote from Robin Murray’s piece:

More shocking (and I use the word shocking in a very real and personal sense) is a proposal by the SRA to water down the only present anti-touting code provision. It proposes to replace Outcome 8.3: ‘You do not make unsolicited approaches in person or by telephone to members of the public in order to publicise your firm or in-house practice or another business’ with the broken-backed phrase ‘You do not abuse your position by taking unfair advantage of clients or others’.

Now to my mind all of the examples that Mr. Murray mentions are quite plainly breached by the taking unfair advantage principle (and other elements in the Code) without the unsolicited approaches rule (although I suspect a better case can be made for the rule where corruption is less obvious). Some lawyers need to get out of the ‘where does it tell me in the rules specifically that I cannot do that’ mindset. What is probably more important than the rules in this circumstance is the action taken. Both the SRA and the SDT have to be willing to act on, investigate, prosecute and discipline lawyers where a pattern of complaints suggests it is a significant problem.  This is why my point about how many firms have been complaining is important.  But, let assume Mr. Murray’s concerns are well founded (he prays in aid a Law Society survey which I have not seen).  This willingness to act is especially acute in markets such as criminal defence, where public interest and client vulnerability is clearly to the fore and risk is high.

An interesting broader question for the movement to fewer rules is whether the SDT (and ultimately the High Court) will support enforcement where standards might, to lawyers eyes, seem vaguer than bright line rules, but I would need to be persuaded that it is the rules that are the problem here.  It is evidence and action which is needed.

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Lawfest #2 Law as a human flourishing

Law is a human business, made of human politics, and – a more neglected point – a place of sometimes great human flourishing.  The talking, the listening, the writing, the thinking all have the social and (sometimes) the creative at its heart. I cannot capture in words how incomparably excellent Lawfest was last time.  I’ve never left any conference quite so fizzing with ideas and energy and hope. Those of you who know me will be surprised: the sometimes dyspeptic, angry, critical tone of the blog is not a pose and gushing is not my style, but if a cynic such as me can come away refreshed and invigorated, then anyone can, and most will.

Last time practising lawyers from the bar, in-house and solicitors, their partners, and legal academics all attended. It really does work for everyone.

You can book here. It’s cheap enough for most pockets and all training budgets. The profits go to charity.

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