Saturday, Apr 21, 2018
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A new set of rules

Corporate lawyers should be grateful for a new Securities and Exchange Commission code of conduct that requires them to “report up” illegal behavior by corporate employees to company officials, and, ultimately, directors.

It means that as professionals, and as officers of the court, they are upholding the same ethical standards that apply to the rest of us. These insist that they not abet criminal behavior before or after the fact. It also means that they are upholding public trust in public institutions. Nothing wrong with that.

They should also welcome a proposed expansion of that code that will require them to “report out” corporate illegal acts. This means quitting their corporate jobs if reporting up has had little or no result, and notifying the SEC of their departure without citing the reasons for it.

Right now an International Bar Association survey of 100 lawyers - enough to extrapolate from - reveals that they are whining, saying that this broadening will lead their clients to clam up and will increase their legal costs. What's so bad about that? It's time that the mention of lawyers and ethics in the same sentence ceases to be an oxymoron. Legal costs won't rise if corporate clients are clean. And if they aren't clean, let them pay.

The SEC's enriched code of conduct comes in the wake of scandals at Enron and other corporations, where fleecing the public and corporate staffs was standard operating procedure.

Ethical lawyers have always insisted that their clients meet their legal obligations. The new rule codifies their practices. For the rest, those who finagled and went along to get along, it's time to change the way they strut their stuff.

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