The SRA shines an ethics spotlight on in-house lawyers
Last year, we welcomed Lee Castleton OBE as a guest at our annual In-House Lawyers Conference. Lee spoke movingly about his legal battles with the Post Office and the ethical lessons he urges the legal profession to take away from his own experiences. The Post Office scandal shone a spotlight on the risks of placing client interests above regulatory duties, with the SRA reporting that it instigated one of its largest ever investigations. “The range of issues are complex, but the fundamentals are simple. Solicitors must meet high professional standards. This includes acting independently, with integrity, and upholding the rule of law and proper administration of justice”.
These ethical considerations are firmly back on the SRA’s agenda. Following Manchester City being found guilty by an independent commission of serious breaches of the Premier League’s financial rules, the SRA has commented that it will be “considering the content of the Premier League’s report to see if there are any issues arising which we need to look into further. If, and where, we identify any suggestions of potential misconduct by solicitors or law firms, we will consider them carefully before deciding on potential next steps.”
The SRA’s comments have got us thinking about the unique ethical considerations and pressures that lawyers face, particularly for those working within an organisation as an in-house lawyer.
As solicitors we have to balance our duty to act in the best interests of our clients against a duty to act in the public interest. When these duties clash, our public interest duty must come first. That is easily said in a vacuum but considering the multifaceted role of an in-house lawyer and combine that with shrinking resources, increased stakeholder pressure, financial pressures and time pressures; one can see that influencing the ethical landscape becomes a more complex challenge.
It is perhaps for this reason that The Law Society has created a “ladder of resistance” comprising a seven step escalation strategy for in-house lawyers to consider when that internal ‘ethics’ alarm is starting to sound. In most cases, the first couple of steps ought to be sufficient to achieve a consensus.
Step 1 - “Collaborative Steering”
this involves framing the conversation in a constructive way and suggesting alternative approaches which achieve the organisation’s goals without raising the same ethical or legal concerns.
Step 2 - “Appeal to motivating considerations”
focusing on issues which are likely to be important to stakeholders such as reputational considerations or maintaining public trust is more likely to secure buy-in than a technical black letter law analysis.
Step 3 - “Bring others into the conversation”
whether this is other stakeholders or external counsel, having other voices and perspectives may help the message to land.
Step 4 - “Formally advise against the action”
where informal messages are not heard, putting this unambiguously and formally in writing may be required. The Law Society suggests advice such as “proceeding with this action exposes the organisation to significant legal and reputational risks. My professional recommendation is that we do not move forward”.
Step 5 - “Escalate to a manager or senior stakeholder”
escalation to another senior stakeholder may be appropriate if advice is not being heeded. The messaging should be focused on protecting the organisation’s interests rather to avoid being seen as a personal conflict.
Step 6 - “Escalate to the board (or equivalent)”
if the organisation has an audit or risk committee, this could be used as an alternative, with advice and concerns relayed in terms that resonate with the focus of the board.
Step 7 - “External whistleblowing or resignation”
if the other steps have proved unsuccessful this final step is for the most critical of cases and may be an option of last resort.
Having conversations around ethics can be challenging, particularly when this may appear to conflict with commercial priorities and strong personalities on the board and elsewhere in the business. However, the ethical choice is also likely to best serve the clients we represent and the Law Society’s escalation path offers a helpful tool for persuading organisations of the importance of the need to discuss difficult issues.
More detail can be found at the Law Society’s guide Working effectively and ethically as an in-house solicitor | The Law Society
If you would like to discuss anything in this article further, please contact:
Alexandria Winstanley
Director - Dispute Resolution
T: +44 (0)7920 236939 alexandria.winstanley @pannonecorporate.com
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