Ethics and the in-house lawyer

Our 2021 series of six webinars for in-house lawyers, in association with Thomson Reuters, got underway this month.

Chair, Anthony Inglese and moderator, Paul Bentall, both of CLL, were joined by two senior in-house lawyers.

Representing the public sector was Frances Nash CB, Legal Director at the Department for Work and Pensions. Gavin Tagg, General Counsel at Adecco UK, provided a view from the commercial sector.  

Standard conception vs gorilla ethics

Laying a framework for legal ethics, Frances explained how the standard conception and gorilla exceptions can create moral tension for lawyers.

The standard conception relates to characteristics like partisanship, neutrality, and non-accountability. It assumes lawyers take instruction without asking moral questions. They provide legal advice but don’t accept accountability for their clients’ decisions.

A departure from the standard conception was defined by lecturers in law, Professor Steven Vaughan and Doctor Emma Oakley. In their paper, ‘Gorilla exceptions’ and the ethically apathetic corporate lawyer*, they exemplified an animal-loving lawyer advising a construction firm. This client was proposing a development on jungle land that would displace 500 gorillas, thus triggering a personal ethical dilemma for the lawyer – his gorilla exception.

Ethics and the in-house dynamic

Frances urged as an in-house lawyer, you can’t disengage from your client. You’re expected to live by the organisation’s values whatever your gorilla exceptions may be.  

However, this also means you’re uniquely placed to keep the organisation on the straight and narrow. Use your neutrality in internal negotiations and prioritise the legal risks to the organisation above the aspirations of colleagues, however senior.

If you believe your organisation will behave unlawfully, take action. Use your powers of persuasion, natural allies in the organisation and, if necessary, your cross-examination skills. If you’re still overruled, tell the CEO / MD in writing that you’re opposing a decision. If you don’t, you’ll be considered complicit by any legal challenger and your non-opposition will be exploited.

Frances urges in-house lawyers to go beyond stating the black letter law when advising internal clients. The value you provide comes from your understanding of the bigger picture and your wider approach.

“The in-house lawyer is uniquely placed to keep the organisation honest.”

Dilemmas in the private sector

In the profit-driven private sector, ethical dilemmas are commonplace, as Gavin explained.

Recruitment companies, for example, deal with many personal service companies. These are tax efficient legal structures for self-employed workers. Where workers seek to exploit tax or company law loopholes, conflicts can arise. On the one hand, the recruiting consultant wants to keep a high fee-earning worker on side, while the legal function is duty bound to prevent wrongdoing.

Umbrella companies can also present tricky situations, typically where they wind themselves down and set up new businesses in their place. Alarm bells ring when the newly formed company claims monies invoiced by the now-defunct business. To pay the new company would breach the law yet deny workers the money they’re owed.

Sometimes it’s the client that’s the problem. A recruitment consultant, euphoric after winning a major new deal, is told by the client not to shortlist any females or candidates over 30. What does she do?

Gavin’s view is unequivocal: Say no to the client when it’s the right thing to do.

Beyond legal: doing the right thing

It’s important, says Gavin, to go beyond merely stating the legal position. Focus more on what the business should do rather than what it could do. This means avoiding a ‘that’s my advice and it’s up to you what you do with it’ stance.

This matters because clients today care more about what a potential supplier stands for than what it actually does. There’s a greater emphasis on morals, culture and trust when choosing who to partner with than ever before.

When giving advice, be swift and decisive. Follow your gut reaction: people are more likely to follow you when you’re authentic and they can see you back yourself.

Echoing Frances’ view, Gavin recommends developing a Compliance Plus approach. In other words, go further than merely abiding by the law. In his industry, the perfect example is:

• Discrimination: defined by law to protect people from unfair treatment on the basis of personal characteristics; vs
• Diversity and inclusion: goes beyond legal obligations and forms part of a winning organisational culture.

“A Compliance Plus culture will stop many ethical dilemmas before they arise”

Frances Nash CB, Legal Director DWP

As well as advising on the response to COVID-19, Frances advises ministers, senior government officials and senior personnel on the legality of their policies and, where necessary, defending those policies in court, Parliament and public inquiries. Frances previously led the legal team at the Ministry of Defence, advising on military operations, major procurements and high-profile cases. Frances has also held senior roles at HMRC, Defra and the Cabinet Office and spent two years on secondment to the Attorney General’s Office.

Gavin Tagg, General Counsel at Adecco UK

Gavin oversees Adecco’s UK & Ireland Group Legal team and the compliance function in the UK, including the business process, internal audit and health and safety divisions. Gavin was called to the Bar in 1995 and has worked in the recruitment industry as an employed barrister since 1999. Before joining Adecco, Gavin worked as Group Legal Counsel for Spring Group plc, Interquest Group and Penna plc and undertook consultancy work via Virtual Law.

Read the  Thomson Reuters in-house Blog regarding the event here.

Next up in this webinar series for in-house lawyers is Structuring and resourcing your legal team, including working with externals on 19 May at 2.00pm. Find out more and register your interest here.