My friend and UCLAW colleague Sung Hui Kim has posted a short essay at Harvard's corporate law blog on the role of inside lawyers within the corporation:
What, if any, obligations to the corporate entity should inside lawyers have to disrupt the material misconduct of their client representatives (to wit: senior managers, including the CEO)? Should inside lawyers conduct themselves as if they are “close friends” of senior managers or is there another, more appropriate model that would facilitate good corporate governance? To what extent should an inside lawyer think of herself as a “gatekeeper”—defined as a “private intermediary who can prevent harm to the securities markets by disrupting the misconduct of his/her client representatives? Would the imposition of somegatekeeping obligations ultimately backfire by foreclosing access to critical information about corporate misconduct? These controversial questions are, at least partially, addressed in my article, Inside Lawyers: Friends or Gatekeepers? 84 Fordham L. Rev. 1867 (2016), the fifth article of mine on the subject of gatekeeping.
Using the GM ignition switch scandal as my point of departure, I answer the most vocal criticisms of my work and address prior mischaracterizations. Although the focal point of the paper is the particular reform that I proposed back in 2005, the primary goal of this article is not so much to defend my proposal (indeed, I believe that I prepared an adequate defense in the 2005 paper) but (i) to discuss fundamental empirical disagreements between those who support affirmative legal/professional obligations on lawyers to stop material corporate misconduct and those who oppose them and (ii) to critique the common, if not prevailing, assumption that our legal system is best served if the corporate in-house lawyer conducts his/her relationships with senior corporate managers according to the “lawyer as friend” model. ...
The full paper is available for download here.
