Coercing Clients

Abstract

Recent federal regulations and amendments to the Model Rules of Professional Conduct - most of which have responded to lawyer involvement in corporate scandals in the United States - rest on the assumption that lawyers have a role to play in forcing clients to act legally, morally, or appropriately. Lawyers are distinctive, perhaps even unique among professionals, in that they are sometimes legally authorized to force clients into obeying the lawyers' advice. This Article reviews rules that empower lawyers in this way, with a focus on the corporate context. For the most part, the recent regulatory changes take a static view of the lawyer-client relationship. In other words, if lawyers are authorized or required to counteract proposed client misconduct, they will do so and less client misconduct will result. This Article demonstrates that the reality is far more complex. Lawyers and clients have incentives to implement coercive rules in a way that may serve reasons wholly unrelated to the rules' purposes. Code drafters and those evaluating lawyers' coercive authority therefore need to confront the fact that attorney-client relationships are dynamic - that changes in the power of one party to the relationship have ripple effects. This practical reality influences both the positions of lawyers in deciding whether to favor or oppose particular regulation and the likely effectiveness of coercive rules.

Keywords: Sarbanes-Oxley, professional responsibility, corporate lawyers, attorney-client confidentiality, attorney-client privilege

JEL Classification: K22, 151