Tuesday, December 11, 2007
With the recent focus on the Conrad Black sentencing of 6.5 years, many failed to notice the co-defendants. Yet there were three and one was an attorney. Judge Amy St. Eve placed Conrad Black's former corporate counsel at Hollinger International on five years probation. The government wanted significantly more time, but the court recognized that the attorney had received no profit/gain and was the least culpable individual. (see Chicago Tribune here, Wall St Jrl here).
A July 17, 2007 DOJ Corporate Task Force News Release reporting on the prior five years states that "23 corporate counsel or attorneys" had been convicted during this time span - a number that Alice Fisher proudly spoke to at the Second Annual ABA Securities Fraud Conference. (see here) Perhaps this number seems low to some, but it actually should be considered very high. If a client fails to follow the advice of outside counsel it is easy for the lawyer to disclaim responsibility. But when the attorney is inside counsel, more responsibility may fall into his or her lap. The question now becomes: how far must corporate counsel protest when conduct within the corporation presents problems, especially problems that a prosecutor may decide to call criminal down the road.
Although corporate counsel here will not have to suffer prison time, the conviction in this white collar case carries severe consequences -especially to the ability to continue to practice law. This conviction, even with a sentence of probation, sends a clear message that corporate counsel should dust off the resume when there is any possibility that corporate management is not following the law. But one has to wonder if fleeing corporate counsel when matters get tough will be in the best interest of the corporation and its shareholders.