Risk Management, Law Firm Economics, and Lawyer Integrity: A Research Agenda

Abstract

This essay will sketch a preliminary research agenda to more fully assess the impact of risk management norms and practices on lawyer integrity under contemporary models of large law firm economics. The historic economic downturn that frames this essay weighs heavily on traditional models of large law firm economics, exacerbating structural tensions and ratcheting up institutional pressures. In a prior work, I argued that the widespread adoption of risk management mechanisms by law firms diminished a full appreciation of the difficult moral choices facing lawyers in modern practice throughout litigation and transactional fields of representation and diluted the deep-rooted, other-regarding obligations of lawyers in society across public and private spheres of service. Drawing on the work of Milton Regan and William Simon, I maintained that the technology of risk assessment and regulation borrowed from the adjacent professional arenas of commerce, insurance, and corporate industry discounted the daily need for the exercise of moral discretion and the daily calling of a higher public obligation. As a result, I asserted, lawyers and law firms together underestimated the burdens of moral agency in the requisite discretionary decisions that are part and parcel of everyday legal advocacy ranging from transactional counseling to litigation discovery. No less important, I added, the same lawyers and law firms routinely neglected their well-settled individual and collective duties of social responsibility to clients, third parties, and the public, and thus discarded the highest ambitions of professionalism in American law displayed in honored traditions of independence, service, and trust. In a powerful rebuttal, Anthony Davis contends that risk management actually enhances individual ethical deliberation within large law firms. The purpose of this renewed inquiry is to more carefully test Davis’s “collaborative” thesis in the context of the large law firm legal services industry and, thereby, to chart new directions for risk management research on the legal profession. To that end, this essay will reconsider the 1997 federal criminal prosecution of John Gellene, a former partner at the Wall Street law firm of Milbank, Tweed, Hadley & McCloy, in order to assess the impact of risk management norms and practices on lawyer and law firm ethical integrity and aspiration. The essay is divided into four parts. Part I revisits my prior critique of risk management norms and practices in lawyer regulation and law firm organization. Part II mounts a defense of risk management norms and practices culled from Davis’s writings. Part III considers norms of integrity carved from David Luban’s body of work on the legal profession. Part IV applies classical, discretionary, and regulatory norms to evaluate the risk management conduct of attorneys during the discovery process in Qualcomm Inc. v. Broadcom Corp.