Leo Strine on Practicing Law in a Lawless Time

This perceived shift in enforcement priorities, highlighted by former Chief Justice of the Delaware Supreme Court Leo Strine, Jr., has ignited a profound ethical debate within the legal community, prompting a critical re-evaluation of the corporate lawyer’s role in upholding the rule of law. Strine, a distinguished figure now of counsel at Wachtell, Lipton, Rosen & Katz and a Fellow at the University of Pennsylvania Carey Law School, recently addressed these pressing concerns in his thought-provoking David S. Ruder Lecture at the Securities Regulation Institute in Coronado, California. Titled "Practicing Law in Lawless Time," the lecture served as a stark warning and a call to conscience for legal professionals navigating an increasingly complex and potentially ethically fraught landscape.

The Erosion of Enforcement and its Implications

Strine’s lecture posits that a climate where major corporations might perceive a reduced risk of criminal prosecution for severe offenses—including foreign bribery, environmental degradation, and breaches of consumer protection—creates a dangerous precedent. This perception, he argues, extends beyond specific administrations, representing a broader vulnerability in the system designed to ensure corporate accountability. Historically, robust enforcement mechanisms have served as crucial deterrents, fostering a culture of compliance within the corporate sector. Data from various government agencies, such as the Department of Justice and the Environmental Protection Agency, often reveal fluctuations in the number of corporate prosecutions and the size of penalties imposed, which can be influenced by administrative policies and priorities. While specific comparisons across administrations can be complex and are subject to varying interpretations, any perception of lax enforcement can embolden entities to push legal boundaries.

The types of crimes Strine references are not minor infractions; they strike at the heart of public trust and societal well-being. Foreign bribery undermines fair global competition and good governance, pollution endangers public health and the environment, and consumer protection violations erode trust in markets and harm individuals. When the threat of criminal charge for such offenses diminishes, the incentive structure for corporate decision-makers can subtly but significantly shift. This creates a challenging environment for corporate lawyers, who traditionally advise clients not just on what is legally permissible, but also on what is prudent and ethically sound, often guided by the implicit understanding of potential regulatory and criminal repercussions.

"Practicing Law in Lawless Time": A Deep Dive into Strine’s Concerns

Delivering the prestigious David S. Ruder Lecture, a series known for its incisive analysis of securities law and corporate governance, Strine did not mince words. He emphasized that the current threat extends beyond traditional areas like criminal, antitrust, or labor law. "It also extends to consumer protection laws, environmental laws, human rights law, and laws designed to ensure public integrity and responsible business conduct," Strine asserted. He warned that "All the laws designed to secure our ability to thrive safely as free citizens of an American republic may now be perversely misused." This broad scope highlights a systemic vulnerability, suggesting that the very fabric of legal order could be strained by a perceived lack of enforcement fidelity.

Strine articulated a series of troubling questions that clients might increasingly pose to their legal counsel, signaling a potential erosion of corporate ethical standards:

"Why should we worry about complying with the law as written when those charged with enforcing it have said they won’t?" This question directly challenges the foundational premise of legal compliance.
"If we bring in [insert family member of an elected official] as a co-investor, can we tilt the regulatory process in our direction?" This points to concerns about potential influence peddling and the subversion of merit-based regulatory decisions.
"Should we remind the proxy advisory firms that someone associated with our proposed transaction is close to [the administration of an elected official] and that its displeasure with them would grow if they recommended against our deal?" This illustrates the potential for leveraging political connections to manipulate market participants.
"Wouldn’t financing the transaction in part with a stable coin from a company affiliated with an elected official also be helpful in creating the right regulatory context for approval?" This raises red flags about opaque financial arrangements tied to political figures.
"Why is an antitrust agency asking us about our commitment to not discriminate against Black people, women, and others who have suffered de jure and de facto legal discrimination, and if we drop that commitment will it secure approval of our deal?" This highlights the potential for sacrificing social equity commitments in exchange for regulatory approval, reflecting a concerning shift in priorities.
"The [pick your favorite environmental statutes] require that we do the following things in siting, designing, constructing, and operating this new facility, but compliance has costs and why shouldn’t we just proceed without doing so because everyone knows that these laws are not being enforced?" This directly challenges environmental protection laws, prioritizing cost savings over legal obligations and public welfare.

These hypothetical client inquiries paint a vivid picture of a corporate world grappling with the implications of a perceived weakening of legal and ethical boundaries. They suggest a potential slide towards transactional ethics, where legal compliance becomes a strategic calculation rather than an inherent obligation.

The Lawyer’s Ethical Quagmire

The challenges don’t stop with corporate clients; they extend directly to the lawyers themselves. Strine identified several "troubling questions" confronting legal professionals:

"We would have taken on this pro bono matter any other time, but if we do it right now, will government power target us for taking on a cause disfavored by [pick your elected official]?" This raises concerns about political weaponization of government power against lawyers performing their public service duties.
"Should we allow our partners to sign on to amicus briefs in their personal capacity given the similar potential for blowback?" This speaks to the chilling effect on freedom of expression and advocacy within the legal profession.
"Our client is asking us to do something uncomfortable and not consistent with our prior view on the law, but aren’t all of our competitors in the same situation, and if we don’t do it, will we lose business to them?" This highlights the intense competitive pressures that can compromise ethical integrity.
"To what extent can we blind ourselves to concerning conduct by our client — such as what appears to be purposeful inducements to affiliates of key elected officials — designed to secure favorable governmental treatment, but for non-merit reasons, so long as we do not directly involve ourselves in it?" This delves into the perils of willful blindness and complicity.
"If there is public disclosure of the fact that these affiliates were involved and on what basis, are we comfortable crafting an SEC filing that leaves out the controversial ‘why’ they were involved because that ‘why’ is arguably ‘immaterial’?" This points to the ethical tightrope walk of disclosure, where technical materiality can be used to obscure problematic underlying motives.

These dilemmas underscore the profound responsibility of corporate lawyers, who are often the first line of defense against corporate malfeasance. The pressure to maintain client relationships, compete for business, and navigate a politically charged environment can test even the strongest ethical compass.

Two Competing Conceptions of the Lawyer’s Role

To address these challenges, Strine traced two competing conceptions of the lawyer’s role in society. He strongly advocated for the "traditional lawyer-citizen model," which he described as "comparatively high-minded." This model posits that a lawyer’s privileged position within the profession carries a "corresponding duty to honor the system of law itself, and not simply to use cunning and legal acumen to advance any interest of a client." This view emphasizes the lawyer’s responsibility to the broader societal framework of justice and legality, viewing their role as more than just a hired gun.

In contrast, Strine outlined the "zealous advocate model," which he characterized as seeing lawyers as "just a specific version of any other kind of professional for hire." While acknowledging that this model prohibits aiding a client in crime or fraud, it might tolerate assisting clients in "illegal action that does not fit in these more serious categories." This distinction is critical, as it highlights the grey areas where lawyers might feel justified in helping clients skirt, rather than uphold, the spirit of the law, provided the conduct doesn’t meet the threshold of explicit criminal activity or fraud. Strine unequivocally sided with the traditional view, arguing that the special privileges granted to lawyers are contingent upon their acceptance of "unique responsibilities to the rule of law."

The Existential Stakes of Corporate Lawlessness

Strine underscored the profound societal implications of corporate lawlessness, particularly for corporate lawyers. "The stakes for society and the future of humanity if corporations with vast impact act in a lawless manner are in fact existential," he warned. This powerful statement elevates the discussion beyond mere legal compliance to the very survival of democratic norms and a functional society. Corporations, by their sheer scale and influence, have the capacity to shape economies, environments, and social structures. Their adherence to, or defiance of, legal and ethical standards therefore carries immense weight.

For this reason, Strine urged corporate lawyers and top corporate leaders to "stand their ground on a basic non-partisan proposition — we are a nation under law and the law should apply to everyone in an equal, non-discriminatory manner." This call to action emphasizes the universal principle of the rule of law, transcending political divides and reinforcing the idea that no entity, regardless of its power or connections, should be above legal accountability.

Forensic Indicators for Navigating Ethical Quicksand

To assist lawyers and their clients in recognizing when they might be sliding into "legal, ethical and moral quicksand," Strine offered several practical "yellow flags" or forensic indicators:

The Bipartisan Consensus Test: Strine advises lawyers to ask: "Would the conduct have been considered illegal or improper under any administration of any party during the past two generations? That is, under a bipartisan consensus view of the law, would the conduct have been considered illegal or improper?" If the answer is yes, and the conduct is only being considered now due to a perception of lax enforcement, it’s a major red flag. This test encourages a long-term, principles-based view rather than a short-term, opportunistic one.
The Concealment Test: "Does the proposed conduct involve the concealment of information, precisely because if that information would be disclosed, it would be considered controversial or potentially material to a regulator, a court, a stakeholder group with a legitimate interest in the matter, or the public?" This points to the classic indicator of wrongdoing: actions that cannot withstand public scrutiny.
The Mirror Test/Consistency Test: "Is the conduct of a kind that you or even the client itself has in the past successfully argued was illegal or improper when engaged in by an adversary?" And, "Do you and your law firm have a long-standing track record of believing that the proposed conduct was contrary to law and accepted commercial norms?" If so, a "good-faith and reasonable basis for the change in your view of the law" is required. This test challenges hypocrisy and encourages consistency in legal interpretation.
The Golden Rule/Universality Test: Drawing on philosophical traditions from Jesus to Kant, Strine suggests asking: "If the conduct your client is proposing to engage in were being done by the other side of a contested transaction, or was the product of counseling by a competitor law firm, what would you think of it?" If it would be deemed "objectionable and wrongful," especially if it disadvantaged your client or flouted the public interest, the implications should be carefully considered.
The Quizzical Behavior Test (Non-Merit Benefits): This indicator involves scrutinizing "the inclusion of co-investors, the provision of economic or other benefits to certain people, or the hiring of particular advisors, for reasons that have nothing to do with your client’s need for their capital, their business talent, or their merits-based expertise." If the "obvious why" is that "something of personal benefit has been given to affiliates of those in power to ease the procurement of government action that should only be taken in compliance with law and for the benefit of the public," then ethical alarms should sound. This targets subtle forms of corruption and influence peddling.
The Gut Feeling/Shower Test: Finally, Strine offered a powerful, visceral indicator: "you are well advised to listen when your guts are made queasy by proposed action or you come out of a meeting feeling like you want to take a shower." This emotional response, he explained, often signifies that "your body is reminding you that your brain knows that something is happening that you do not feel proud to be a part of and for sound reasons." This emphasizes the importance of intuition and personal integrity as a final safeguard.

These practical guidelines provide a framework for lawyers to critically assess situations and offer advice that is not only legally sound but also ethically robust, helping clients avoid actions they might later regret and channeling their behavior towards "lawful, high-integrity means for achieving their legitimate objectives."

Optimism and the Enduring Strength of the Profession

Despite the gravity of his warnings, Strine concluded his lecture on a note of optimism, expressing confidence in the legal profession’s capacity to rise to the challenge. He acknowledged human imperfection but stressed that "corporate legal advisors are human and prone to lapses does not mean that lapses are the rule." On the contrary, he highlighted the often-unseen daily work of corporate and securities lawyers who "counsel clients on a daily basis to comply with the law, to avoid edgy law-skirting tactics, and listen to the better angels of their nature."

He pointed to the countless "unfair conflict transactions that don’t happen, the initial, materially incomplete or misleading disclosure drafts that get corrected to include the material facts in proper context, and the product, workplace, or environmental safety shortcuts that are not taken." These unseen interventions, he argued, prevent harm and uphold societal expectations, rarely making headlines but constantly shaping corporate conduct for the better. This perspective underscores the proactive, preventative role lawyers play in maintaining ethical corporate cultures.

Strine reiterated that "corporate legal advisors are acting as important safeguards for the rule of law" during this "unprecedented, and hopefully fleeting moment." He firmly stated that the "uniquely difficult and unsavory pressures resulting from official departures from the principled adherence to the rule of law do not mean that the corporate and securities bar supports those departures nor that it is lightly bending to those pressures."

His concluding remarks were a powerful affirmation of American values and the role of the legal profession: "We are not Russia. We are way better than that. We are way stronger than that. We are the United States of America. A nation that competes on quality. A nation whose best attribute is a creedal commitment to the principled rule of law. A commitment that recognizes and celebrates the equality of each person before the law and where no person, regardless of office, is above the law."

He reminded his audience that "Corporations have been made citizens of this nation under law on the explicit condition that they only do lawful business by lawful means. The law remains the law. No momentary officeholders can take that away from us. Because the law remains the law, so, therefore, does the duty of corporations to obey it."

Strine’s lecture is a vital call for the corporate bar to embrace its role as "citizen-lawyers," leveraging their unique position to ensure that American corporations honor their societal charters and contribute to the welfare of society through ethical, law-abiding means. By collectively doing the right thing, especially when faced with unprecedented pressures, the legal profession can perform a genuine public service, safeguarding the nation’s fundamental premise and its commitment to the rule of law.