January 6, 2007
ABA Conference on White Collar Crime in San Diego March 1-2
The ABA's Criminal Justice Section is holding its annual "national institute" program March 1-2 in San Diego on White Collar Crime, including many topics and panels related to ethics, privilege, "hardball tactics," securities enforcement, and the Foreign Corrupt Practices Act. A link is here and the program brochure in PDF is here. [Alan Childress]
New Carnegie Report Calls for More Law School Attention to Training on Practice and Ethics
How to become a more competent and ethical lawyer? Says Carnegie, "Practice."
Not really. There is actually a call for the law school to make a difference in the realistic training of young and aspiring lawyers to become socially responsible and focused on clients rather than just case law. In a new report issued this week, the Carnegie Foundation for the Advancement of Teaching seeks more academic training in practical and ethical skills. Their press release, Carnegie Examines the Education of Lawyers and Calls for Change, is here. The full report can be ordered ($40) from Wiley here, and a 15-page summary in PDF format is down-laudable here.
As noted by the Chronicle of Higher Education, "By focusing on cases rather than clients, law schools offer too little practical training or grounding in ethics and social responsibility, the Carnegie Foundation for the Advancement of Teaching concluded in a report issued on Thursday." [Alan Childress, with HT to Ray Diamond]
January 5, 2007
Michigan State Bar Seeks Executive Director
The State Bar of Michigan has posted this job announcement for a new Executive Director, to oversee the bar organization, presumably in Lansing and governing both pieces of the state. Deadline: February 15. [Alan Childress]
NY Lawyer Article on Law Students Volunteering
Posted by Alan Childress
Nice story today here in the New York Lawyer about 500-plus law students and others from all over the country (more than 28 law schools) who traveled to New Orleans and the Gulf Coast recently to help out as part of the Student Hurricane Network. As Loyola's Bill Quigley notes, "There are about five times as many legal problems as we had in August  ... and about half as many people providing legal services and pro bono services.” One of our prior postings on this important grass roots contribution here.
Some Legal Profession Abstracts and Links Found on Solum's Legal Theory Blog
Posted by Alan Childress
Three recent articles of possible interest to observers of the legal profession, and recently abstracted and linked on Larry Solum's blog, are:
- Daniel Schwarcz (Harvard Law School) has posted Beyond Disclosure: The Case for Banning Contingent Commissions about insurers' payment of commissions to brokers and "independent" agents, and possible conflicts of interest. Link to Solum here.
- Ellen P. Aprill (Loyola Law School Los Angeles) has posted What Critiques of Sarbanes-Oxley Can Teach about Regulation of Nonprofit Governance about SOX's lessons even though it technically is not about not-for-profits. His link here.
- Bruce A. Green (Fordham University School of Law) has posted The Religious Lawyering Critique about the role of religion in the profession and practice, for instance versus the 'hired gun' model. "Finally, the article questions the critics' premise that when religious and professional expectations do conflict, religious expectations are necessarily better." Link here.
January 5, 2007 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (0) | TrackBack
Sort of a Symposium Issue: Fraud or Co-optation in the Practice of Smoothing Earnings?
Posted by Jeff Lipshaw
June Carbone (left) and Bill Black (right), both of UMKC, and I were trading e-mails two days ago, and to make a long story short, on pretty short notice, I filled in (to substitute for a cancellation) on a panel in the Section on Socio-Economics workshop here at the AALS meeting on Wednesday afternoon, moderated by June, and on which Bill was presenting.
The general theme of the panel was "norm-creation." Bill's talk centered on a 2005 presentation by Michael Jensen, of SSRN and all sorts of other fame, about what Jensen now sees as "low-integrity relations" between firms and analysts on the subject of earnings smoothing. I have written and posted on the relationship between law and business ethics, so I also was interested in the Jensen piece.
Since my quickly prepared presentation consists presently of what I scrawled at lunch on some LexisNexis note paper, I thought this would be a good place to preserve this somewhat impromptu "symposium" offering.
Jensen's observations are thought-provoking, particularly if you have been on the inside of a corporation making decisions about how you report your earnings. Bill is a criminologist, and his piece was about what the criminologists call "neutralization" and what I would call "co-optation, in this instance into the creation of norms under which the manipulation of accounting numbers was acceptable.
My limited goal was to take a deeper dive into how we decide something is manipulation worthy of the name "lie" or "fraud." Regular readers of this blog are, I believe, familiar with my long history as a GC at the corporate and divisional level in companies that aspired (because of the career history of the managers) to something resembling GE management style. At AlliedSignal under Larry Bossidy, the mantra every year was "Make the Numbers," a shorthand (I came to believe poorly worded) for the values of "fulfill your commitments, do what you promise, and do that for customers, employees, shareholders." So if that was one end of the continuum driving the development of internal norms of behavior, the unacceptable other end of the continuum would have been "Make Up the Numbers."
There is an epistemological element to all of this, I'm sorry to say. Accounting, in many respects, is about buckets of time, quarters and years, most of which are arbitrary (or at least as arbitrary as the fact of the Gregorian calendar and its divisions). A goal of accounting (and I'm pretty sure I could pull up a basic accounting text on this) is to match revenues and costs properly in each bucket. Smoothing is the phenomenon by which companies deliberately manipulate the revenues and costs in the various buckets so as to conform to earlier predictions, either from management or analysts, about the result in the time periods represented by the buckets.
More on this below the fold.
In the pre-Enron period, there is no question that analysts demanded, and companies delivered, if they could, no surprises from what the companies issued as their own earnings expectations for future periods.* That was the point of smoothing. Bill had an interesting thesis about those days: if the company's stock was punished because it missed an estimate by a penny (out of saying several dollars per share of earnings), it was because the market perceived that the company had exhausted every possible "fraud and manipulation" and still couldn't get to the number. I disagree, on further reflection, with that causal explanation. I think the market expected you could always manipulate another penny, so that if you missed by a penny, it was a deliberate bearish signal by management on the future prospects.
But the present question is what it means to put the terms "lie" or "fraud" as descriptors on that manipulation. I want to put aside the straw man of straight cooking the books in the manner by which I now confess I did my freshman chemistry lab reports: if you don't like the number, erase it and put in a new one. Booking sales you never made is out and out fraud. Simply changing entries you don't like is out and out fraud. Writing an earlier date on an option agreement and pretending it was signed then is a lie. Those cases, it seems to me, are too easy to be interesting.
Here's the epistemology. If a lie is a sentence uttered deliberately not to reflect reality, and with the intention of deceiving in the process, what does it means to lie about your accounting when you are talking about manipulation that is not out and out falsification of a piece of data? A financial statement is itself a model seeking to represent another reality - the state of a business. That reality is so complex that we need to reflect it in several ways, with a snap shot view at a moment in time (the balance sheet), and in flow over periods (income and cash flow statements). Lots of aspects of accounting conventions are precisely that: conventions that are proxies and do not themselves reflect reality. If you use a depreciation method, you are not really reflect the extent to which the asset is used up; you are reflecting a model of that use. And sometimes, the accounting or tax rules sanction what seems like a lie: accelerated depreciation. So what are truth statements in the context of accounting?
Moreover, the accounting conventions are subject to interpretation and judgment. For example, is the cost fairly attributable to one bucket or more than one bucket (i.e., do you expense or capitalize the cost?)
So there is something of a gray area on that continuum, between "Make the Numbers" and "Make Up the Numbers," in which we have to struggle with questions of the very essence of truth.
Here are some very cursory hypotheses:
1. Certainly pre-Enron, the rules of the manager-analyst game rewarded present period "making the numbers" over long-term value, or at least that's how companies perceived it. Woe betide the R&D department in the fourth quarter of a company having a bad year. Even without manipulation of the accounting, as Jensen observes, there was a double-think rationalization (in my view) of perfectly legal, but economically nonsensical trading of long-term value for short-term gain. See Larry Ribstein for why this supports the thesis that firms are turning to the private capital markets.
2. There is more transparency now than there used to be. That is partly related to attitudinal shifts, and partly due to the Sarbanes-Oxley rules (Regulation G) requiring there to be a reconciliation in publicly released financial statements between GAAP numbers and "as adjusted for continuing operations" numbers.
3. The integrity issues related to smoothing were not restricted to the relationship between the firm, on one hand, and securities markets, on the other. In large and complex organizations there is gaming up and down the business: business unit controllers game the division, and divisional controllers game the corporation. Jensen has another paper (only downloaded about 7,500 times) entitled Paying People to Lie: The Truth About the Budgeting System. Here is the abstract:
This paper analyzes the counterproductive effects associated with using budgets or targets in an organization's performance measurement and compensation systems. Paying people on the basis of how their performance relates to a budget or target causes people to game the system and in doing so to destroy value in two main ways: 1. both superiors and subordinates lie in the formulation of budgets and therefore gut the budgeting process of the critical unbiased information that is required to coordinate the activities of disparate parts of an organization, and 2. they game the realization of the budgets or targets and in doing so destroy value for their organizations. Although most managers and analysts understand that budget gaming is widespread, few understand the huge costs it imposes on organizations and how to lower them.
My purpose in this paper is to explain exactly how this happens and how managers and firms can stop this counterproductive cycle. The key lies not in destroying the budgeting systems, but in changing the way organizations pay people. In particular to stop this highly counterproductive behavior we must stop using budgets or targets in the compensation formulas and promotion systems for employees and managers. This means taking all kinks, discontinuities and non-linearities out of the pay-for-performance profile of each employee and manager. Such purely linear compensation formulas provide no incentives to lie, or to withhold and distort information, or to game the system.
While the evidence on the costs of these systems is not extensive, I believe that solving the problems could easily result in large productivity and value increases - sometimes as much as 50 to 100% improvements in productivity. I believe the less intensive reliance on such budget/target systems is an important cause of the increased productivity of entrepreneurial and LBO firms. Moreover, eliminating budget/target-induced gaming from the management system will eliminate one of the major forces leading to the general loss of integrity in organizations. People are taught to lie in these pervasive budgeting systems because if they tell the truth they often get punished and if they lie they get rewarded. Once taught to lie in this system people generally cannot help but extend that behavior to all sorts of other relationships in the organization.
For what it's worth, I watched this happen. I am not convinced that people respond so directly to compensation that changing the pay system would solve the problem, but I have no doubt that Jensen correctly identifies a corrupting influence from a "top-down" imposed budgeting system. I have this intuition that the gaming is more complex than merely economic. Once you set the rules of the game for success-oriented people, success-oriented people want to win. Or they want to get an A and not a C. Period.
* * *
This is about norms and integrity. My guess is the number of people who walk into these situations with the preconceived notion they are knowingly going to scheme is fairly small. That is, the set of true evil actors is relatively small. The set of banal evil, of cooptation, or neutralization, as Bill Black put, seems to me is not only bigger, but more interesting and important. And I've written about the dangers of the instrumental reasoning process by which we can delude or deceive ourselves into justifying the abuse, all of which can be exacerbated by a lawyer's professional gloss (if not imprimatur) on the justification.
I don't think the solutions are algorithmic. I am suspicious of instrumental reason (or instrumental reason masquerading as pure practical reason). I am aware of the mushiness of relying on intuition. So it's a mystery to me still how we resolve the intersection of legal rationalization with a moral and ethical sense.
*(The practice of issuing "guidance," as it is called, has substantially curtailed since then, I think. I saw some data just a few days ago that securities class action filings are down - that would be consistent with less earnings guidance - the core of a archetypal suit consists of company guidance and then a subsequent event that proves the guidance incorrect.)
Welcome Nancy Rapoport!
I can put this formally and succinctly: Nancy is the former dean of the University of Houston Law Center. In July 2007, she will become the Gordon & Silver, Ltd. Professor of Law at the William S. Boyd School of Law, University of Nevada Las Vegas. But the following segment of her official biography over at the Houston Law Center web page demonstrates just how perfectly she fits here with us:
Her specialties are bankruptcy ethics, ethics in governance, and the depiction of lawyers in popular culture. She has taught Contracts, Sales (Article 2), Bankruptcy, Chapter 11 Reorganization, Legal Writing, Contract Drafting, and Professional Responsibility. Among her published works is ENRON: CORPORATE FIASCOS AND THEIR IMPLICATIONS (Foundation Press 2004) (co-edited with Professor Bala G. Dharan of Rice University). She has also appeared in the Academy Award®-nominated movie, Enron: The Smartest Guys in the Room (Magnolia Pictures 2005) (as herself). Although the movie garnered her a listing in www.imdb.com, she still hasn't been able to join SAG.
If you have ever read anything Nancy has written, whether over at MoneyLaw in the blog format, or in the University of Toledo Law "dean" issues, or elsewhere, you know that she combines wisdom, insight, and a completely engaging writing style. Plus, we think she may be the leading scholar working today on the lessons to be taken - positive and negative - from Judge Judy.
January 4, 2007
ABA Offers CLE Webcast 1/18 on McNulty Memo
The ABA's CLE program linked here is "Securities Enforcement After the McNulty Memo." It will be held on Thurs., Jan. 18 and is one hour of ethics credit. The format is audio webcast or live teleconference. One of the speakers is from the SEC division of enforcement. [Alan Childress]
Morriss and Henderson on USN&WR Rankings and Post-Graduation "Success"
Posted by Alan Childress
Andrew Morriss (Illinois and Case Western, Law [below right]) and William Henderson (Indiana- Bloomington, Law [left]) have posted on SSRN their empirical and thoughtful study, "Measuring Outcomes: Post-Graduation Measures of Success in the U.S. News & World Report Law School Rankings." Previously we had posted and linked here on the rankings phenomenon and the difficulty of measuring competence and ethics. This article focuses on the post-graduation impact on the legal profession and placement after the rankings, and the magazine's methodology in measuring "success" of young lawyers. Here is their abstract:
The U.S. News & World Report annual rankings play a key role in ordering the market for legal education. This Article explores the impact and evolution of placement and post-graduation data, which is an important input variable that comprises 20 percent of the total rankings methodology. In general, we observe clear evidence that law schools are seeking to maximize each placement and post-graduation input variable. During the 1997 to 2006 time period, law schools in all four tiers posted large average gains in employment rates upon graduation and nine months, which appear to result from a combination of competition and gaming strategies. Law schools in tiers 2, 3, and 4 have also increased 1L academic attrition, which may be an attempt to increase the U.S. News bar passage score.
We also use multivariate regression analysis to model the employed at graduation and employed at nine months input variables. We find that the following factors are associated with higher employed at graduation rates: (1) higher 25th percentile LSAT scores, (2) more on-campus interviews, (3) higher percentage of part-time students, (4) location outside a Top 10 corporate law market, and (5) status as a historically black law schools. All of these factors except LSAT and OCI activity vanish when examining the employed at 9 months data. Surprisingly, the U.S. News Lawyer/Judge reputation score is associated with higher employment at nine months. Further research on the Lawyer/Judge survey instrument is needed.
After presenting our empirical results, we critique the specific measures of post-graduation success used in the U.S. News rankings and explain how each can be improved. We conclude that the best solution to law schools' complaints about the impact of U.S. News rankings is greater data availability and transparency, particularly on post-graduation outcomes and other factors affecting students' eventual employment prospects.
January 4, 2007 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (0) | TrackBack
January 3, 2007
Lipshaw on Why the Law of Entrepreneurship Barely Matters (with apologies to the guy at Tony Lacey's party)
The first thing I need to do is apologize to the guy at Tony Lacey's L.A. party in Annie Hall for lifting his line: "Right now it's only a notion, but I think I can get money to make it into a concept ... and later turn it into an idea."
Like many of us, every once in a while I am kick-started into activity by an article that is thoughtful and interesting yet counter to my intuition (based on some experience) how the world works. That was my reaction to the article by Gordon Smith and Masako Ueda entitled Law & Entrepreneurship: Why Courts Matter. Gordon has previously posted on it over at Conglomerate, and I had some meandering blog thoughts about the thesis, namely, that I wasn't sure that law as such really mattered to entrepreneurs (as opposed to their lawyers, when they could afford to have lawyers). Certainly there is some law of entrepreneurship, but like most Anglo-American law, it is case law (about which Gordon has written) dealing with divvying up a smaller pie when things don't go swimmingly.
Since then, like the unnamed character, I took the blog notion and have tried to develop it into a concept, and perhaps some day, it will even be an idea. Here's the abstract of Why the Law of Entrepreneurship Barely Matters: Rules, Cognition, and the Antinomies of Transactional Practice, posted on SSRN, which, as it stands now, is a heavily annotated introduction to what will ultimately be a longer piece:
Despite valiant (if nascent) efforts to show that law, or at least courts and doctrine, matters in the broader study of entrepreneurship, I am skeptical that it really does. The reason goes to the fundamental orientation to rules and their application of law and lawyers, on one hand, and entrepreneurs, on the other. As much as law students like rules, and social scientists like theories capable of prediction and algorithms and models, there are inherent philosophical (and perhaps psychological) problems with the interaction of the lawyer and the entrepreneur. In the same way that the relationship of law to moral intuition is perennially debated and no less frequently unresolved as between empiricists and rationalists, foundationalists and anti-foundationalists, the social context of rule-following for legal ordering is at odds with the entrepreneur's orientation to rules.
In this Essay (which serves as an introduction to a longer work), I want to explore several themes. First, as the philosophers have shown, there is no rule for the application of a rule, and what we perceive as a given result is a matter of social congruence rather than a result inherent in the rule itself. The social and psychological orientation of those who create law, and those who create innovation, are at odds. Second, the predominant approaches to the science of law fail to account for the inherent paradox (or antinomy) of judgment. Third, the very nature of a legal or regulatory solution, by and large, is cognitive, and fails to address the non-cognitive aspects of entrepreneurship. Finally, there is a fundamental distinction between the definition of one's presently ascertainable rights in property, and private ordering to deal with future contingency. In the former, the law comes as close as it ever does to being constitutive; in the latter, what we say now is merely ammunition for instrumental use later.
It's apropos, as I am at the AALS meeting, to say that, just like another character at the Tony Lacey party, I'm just hoping all the good meetings aren't taken.
January 2, 2007
Gantz on Vietnam's Legal Profession and Global Trade
Posted by Alan Childress
David Gantz (Univ. of Ariz., Law), pictured right, has posted on SSRN his new article: "Doi Moi, the VBTA and WTO Accession: The Role of Lawyers in Vietnam's No Longer Cautious Embrace of Globalization." Its abstract is:
During the past thirty years, Vietnam has evolved from a closed, Communist/socialist state with little respect for the rule of law -- or lawyers -- to a still-socialist state but one which is increasingly driven by market forces, global competition, and development of a well-functioning and predictable legal system. The article traces this process from the end of the Vietnam War, through the initial economic opening under “Doi Moi,” to negotiation of the bilateral trade agreement with the United States and, finally, to the WTO accession process. In each instance, emphasis is placed on the growing role that the law and lawyers have played in a remarkable embrace of globalization.
January 2, 2007 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (0) | TrackBack
Supreme Court Historical Society in the News
Posted by Alan Childress
There's well deserved praise and attention in this NY Times story and this WSJ blog entry on my GW colleague Maeva Marcus [left], about her work for the Supreme Court Historical Society and its publication of the final collections in its documentary-history series, due out in February. (We posted on the society, membership, and gift ideas here.)
The Times story also notes Dr. Marcus's role in leading the GW-based Institute for Constitutional Studies: "Among its activities, the institute brings young scholars to Washington for seminars on constitutional history. In other words, it may give a new generation the equipment and desire to uncover some of the mysteries that, even after 30 years, still remain." The ICS is ably helmed by Dr. Marcus and its deputy director Dr. Philip Katz.
CLE 1/10 on McNulty Memo and Corporate Privilege
Link here to a two-hour audio CLE program from West LegalEdCenter. It is to be webcast live January 10, 2007, from 2:00 to 4:00 EST. The program is called "The McNulty Memo and Waiver of
Attorney-Client Privilege in Criminal and Civil Investigations." [Alan Childress]
The charges filed by the North Carolina Bar against the prosecutor in the Duke lacrosse case are unusual but not unprecedented. The Maryland Court of Appeals reprimanded the States Attorney of Montgomery County for violating Rule 3.6 a few years ago (here). North Carolina has adopted the ABA Model Rule verbatim, with an additional provision that permits the lawyer to reply to charges of misconduct publicly made against the lawyer (North Carolina Rule 3.6(e)). Although I have not yet seen the charges, either withholding or misrepresenting evidence might be a basis to charge a Rule 3.8 or 8.4 allegation, for which there is more precedent.
It is quite unusual to see the Bar initiate charges while the criminal case is still pending rather than to defer action until that process has run its course. With respect to the improper pretrial publicity allegations, it will be interesting to see if the DA invokes "fair reply" as a defense to his media approach as a result of publicity generated from the defense side.
My own experience with prosecuting prosecutors suggests that, as a general proposition, courts and bars are quite reluctant to sanction alleged misconduct by these guardians of justice. It will be worth following this bar case as it may educate the public about bar discipline in general and prosecutor's ethical obligations in particular. It is also worth noting that the key Gentile precedent (501 U.S. 1030) was a 5-4 cobbling of opinions by Chief Justice Rehnquist and Justice Kennedy, with Justice O'Connor's concurring vote creating the majority. Trial publicity and the "lawyer as commentator" industry has come a long way since Gentile and perhaps this case will examine the lawyer's ethical obligations in these high profile, intense publicity cases.
P.S. The lawyer reprimanded in Maryland survived the embarrassment and was elected as Attorney General of the state last November. Maybe all publicity is good publicity. [Mike Frisch]
On Ethics, Economics, Advocacy, and Charlevoix Ice Cream
Posted by Jeff Lipshaw
There's an interesting set of comments to a blog post over at Conglomerate (full disclosure: I was responsible for one moderately inane contribution). Gordon Smith posted a snippet from an article by Benedict Sheehy, (University of Newcastle - Australia), entitled "Corporations and Social Costs: The Wal-Mart Case Study." Professor Sheehy argues Wal-Mart is responsible for social waste by causing its suppliers to put too much in the packages, thereby underpricing the goods,and causing lots of stuff (in this case, pickles) to be thrown away.
I have to admit I was scratching my head over this one even before neo-classical economists and empirical scholars far more qualified than I jumped in to point out the holes in the thesis (most of which are testable, like: does Wal-Mart really have the market power to control the size and pricing of pickle packages?) My own experience with oversizing was in our little lake resort town of Charlevoix, Michigan (above and right),* which, during the summer does a thriving trade in fudge (a Northern Michigan specialty) and ice cream cones. I realized at some point that the store owners had figured out that you could double your business by increasing the size of a cone and charging more for it. So, effectively, single scoop cones went by the wayside, and you had to spend four bucks on this huge glob of ice cream. Now the locals (and the quasi-locals like me) know how to deal with this (and we leave the Bridge Street shops to the "fudgies" and "coneheads," as summer tourists are known). You troop a half-mile down the main drag to the Dairy Queen, or stop in Oleson's market and buy a half-gallon of Edy's and take it home.
What stopped me in my [Edy's fudge] tracks was this from Professor Sheehy:
While Wal-Mart is not the creator of consumerism, its dominance creates a large responsibility to inform consumers about the real costs. By under-pricing, Wal-Mart is misinforming the consumer encouraging over-consumption, and to do so in the planet's current state is nothing less than perverse. Because of its market dominance, a strong argument can be made for its bearing considerable corporate responsibility to inform consumers about costs by pricing correctly.
Perhaps this is the nature of the legal academic beast, but David Hume's observation about the conflation of the "is" and "ought" seemed apropos (or, as Professor Childress would say, aproposner): "[T]he author proceeds for some time in the ordinary ways of reasoning, and establishes the being of a God, or makes observations concerning human affairs; when of a sudden I am surpriz'd to find, that instead of the usual copulations of propositions, is, and is not, I meet with no proposition that is not connected with an ought, or an ought not." I have often suggested that the economic approach to law and policy (and everything else) fails to make clear its implicit consequentialist morality, but despite my occasional jibing of law-and-economics on this point, there is also a fundamental epistemology of freedom that goes with market economics, and on that point I too take a neo-classical position.
Wal-Mart puts it on the shelf and compels NOBODY to buy it. Murdick's Ice Cream scoops it and compels NOBODY to buy it. As the commenters over at Conglomerate point out, the argument that Wal-Mart has market power in the grocery business is attenuated; if so, I suppose Murdick's and Kilwin's (below), the two ice cream shops on Bridge Street, have the power to force chocoholics to fork over four bucks for the oversized ice cream cones. (Wal-Mart is big and Murdick's is small, but mere size has no relationship to market power - ask KMart or Sears.) It seems to me that consumers have some responsibility to decide what makes sense and what does not. But I acknowledge that is my "ought" and I don't conflate it with an "is."
One final note on advocacy tactics (or the dangers of the discovered half-truth - see my article somewhat related to this subject). Mr. Sheehy appeared in one of the later comments to defend his work by noting that it was "sufficiently rigorous to be published by Northwestern." Most would, I think, decry publication in any student-edited journal as an indication of scholarly rigor, but as Gordon noted in a later comment, "the Northwestern Journal of International Law & Business is quite a different thing from the Northwestern University Law Review, which is what your reference would imply to an American legal academic." Ouch.
* In the spirit of unbridled capitalism, I should note this lovely house is available for weekly rentals.
January 1, 2007
The Judge Judy-fication of Legal Ethics
Posted by Jeff Lipshaw
We are delighted to have this guest piece from Nancy Rapoport (right):
The North Carolina Bar Association has announced that it has filed ethics charges against Michael Nifong, the DA who has been in charge of the Duke University lacrosse case. Based on what I’ve read in the news, those charges refer to various statements that Nifong made. According to the New York Times, not only did he make “misleading and inflammatory statements” about the accused players, but he also knowingly made a misleading assertion that posited that the players might have used condoms, which might explain the lack of DNA evidence. Nifong has recently dropped the rape charges against the players.
How fuzzy is the line about what prosecutors can and can’t say to the media? North Carolina’s ethics rules include prohibitions against making statements that could “materially prejudice an adjudicative proceeding.” (Rule 3.6(a).) Rule 3.6(b) sets out a laundry list of “thou shalt nots,” including statements relating to
(1) the character, credibility, or reputation of a party, suspect in a criminal investigation or witness, or the identity of a witness, or the expected testimony of a party or witness; . . .
(4) any opinion as to the guilt or innocence of a defendant or suspect in a criminal case or proceeding that could result in incarceration; or
(5) information the lawyer knows or reasonably should know is likely to be inadmissible as evidence in a trial and would if disclosed create a substantial risk of prejudicing an impartial trial.
Attorneys are, of course, allowed to discuss basic facts about cases. (Rule 3.6(c).)
That’s just the general rule. Prosecutors, of course, have their own heightened responsibilities, set forth in Rule 3.8. (This rule isn’t very difficult to find. It’s called “Special Responsibilities of a Prosecutor.)
The prosecutor in a criminal case shall:
(a) refrain from prosecuting a charge that the prosecutor knows is not supported by probable cause; . . .
(d) make timely disclosure to the defense of all evidence or information known to the prosecutor that tends to negate the guilt of the accused or mitigates the offense . . . ;
(e) exercise reasonable care to prevent investigators, law enforcement personnel, employees or other persons assisting or associated with the prosecutor in a criminal case from making an extrajudicial statement that the prosecutor would be prohibited from making under Rule 3.6; . . .
(g) except for statements that are necessary to inform the public of the nature and extent of the prosecutor's action and that serve a legitimate law enforcement purpose, refrain from making extrajudicial comments that have a substantial likelihood of heightening public condemnation of the accused.
Comment 6 to this Rule adds that “[a]lthough the announcement of an indictment, for example, will necessarily have severe consequences for the accused, a prosecutor can, and should, avoid comments which have no legitimate law enforcement purpose and have a substantial likelihood of increasing public opprobrium of the accused.” So, for example, referring to the Duke players as “under investigation” would be OK, but referring to them as “a bunch of hooligans” would be a clear no-no. (My colleague at Houston, Meredith Duncan, is working on an article talking about the rights of those who have been accused of rape.)
Why might a prosecutor make such statements, when the rules are certainly clear at the extremes, if not always clear in the middle? I don’t pretend to know Nifong’s reasons for making the statements. But I have a general hypothesis that lawyers have subconsciously allowed their understanding of ethics rules to slip because popular portrayals of lawyers rarely bear any relationship at all to real ethics rules.
I love Denny Crane in Boston Legal. When I was a law student, I enjoyed watching L.A. Law, too, even though the only accurate part of life at McKenzie, Brackman, Cheney and Kuzak was that it would show associates working late at night. I love My Cousin Vinny, The Devil’s Advocate, The Verdict, and even Legally Blonde. But I know that much of what goes on in those shows and movies flies in the face of our ethics rules. (Try making Adam’s Rib without running afoul of conflicts of interest in the first five minutes.) What does the public see? It sees Judge Judy’s sarcasm and lack of respect for the people in her courtroom. It sees lawyers who shape their clients’ testimony (Anatomy of a Murder), counsel their clients to commit crimes (Double Jeopardy), tell juries that they believe their own clients are guilty (…And Justice for All), and lie every chance they get (Liar Liar). Non-lawyers who see these examples of “lawyering” aren’t likely to have a frame of reference to tell them what’s wrong with the behavior. Lawyers have that frame of reference, if they stop and think about the rules that bind them. There’s a risk, however, that the images that they see when they’re being entertained chip away at their brains’ link between real lawyer behavior and fictional behavior. I’m not making an excuse for Nifong’s statements—just a warning that lawyers would do well to remember that “Vinny got away with it” won’t play well in front of a disciplinary panel.
Nancy B. Rapoport is a professor of law and the former dean of the University of Houston Law Center. In July 2007, she will become the Gordon & Silver, Ltd. Professor of Law at the William S. Boyd School of Law, University of Nevada Las Vegas.
December 31, 2006
Lawyer as Polymath
If you skipped over the "Up Front" squib in the New York Times Book Review this morning, you missed the profile of one of this week's critics, London solicitor-advocate Anthony Julius. Julius is a beneficiary of the relaxation of the monopoly of English barristers on trial practice, so he not only prepares cases for trial, but appears in court as well. He represented Princess Diana in her lawsuit against the newspaper who published photos of her exercising in a gym, as well as Deborah Lipstadt in a libel suit involving claims arising out of her book on Holocaust denial.
Julius has a Ph.D. in English literature, and is the author of T.S. Eliot, Anti-Semitism, and Literary Form. His piece in today's Times is a review of a new art collection by Hilton Kramer, the Times's former chief art critic.