Practicing Law in Lawless Time

Corporate lawyers are currently navigating an increasingly complex and ethically fraught landscape, particularly concerning the enforcement of critical legislation. Under the previous Trump administration, there was a perceived shift in the Department of Justice’s approach, leading to a climate where major corporate clients might anticipate reduced criminal charges for serious offenses such as foreign bribery, pollution, and consumer protection violations. This perspective, articulated by former Chief Justice of the Delaware Supreme Court Leo Strine, Jr., suggests a potential weakening of enforcement that presents profound challenges to the legal profession’s traditional role and responsibilities.

Strine, a distinguished legal figure who served as the Chief Justice of the Delaware Supreme Court from 2014 to 2019, delivered a seminal address last month titled "Practicing Law in Lawless Time." The lecture was presented at the David S. Ruder Lecture at the Securities Regulation Institute in Coronado, California, a prestigious forum for discussions on critical issues in securities law. His insights, drawn from extensive experience in corporate governance and jurisprudence, resonate deeply within the legal community, prompting introspection on the duties of corporate counsel in an era of perceived regulatory leniency.

The Erosion of Enforcement and its Implications

Strine’s central thesis posits that the current threat extends beyond specific legal domains like criminal law, antitrust, or labor law. It encompasses a broader spectrum, including consumer protection laws, environmental regulations, human rights law, and statutes designed to ensure public integrity and responsible business conduct. 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 "perverse misuse" is not necessarily the active dismantling of laws, but rather the creation of an environment where the spirit, and sometimes even the letter, of the law is disregarded due to a perceived lack of enforcement commitment from those in power.

This perceived shift can lead to a dangerous moral hazard, as clients may begin to question the necessity of strict legal compliance. Strine outlined several troubling questions that corporate lawyers might increasingly face from their clients:

• "Why should we worry about complying with the law as written when those charged with enforcing it have said they won’t?" This question highlights the direct link between enforcement credibility and corporate compliance. If the deterrent effect of legal penalties is diminished, the incentive structure for adherence to legal and ethical norms is fundamentally altered.
• "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 the insidious potential for cronyism and undue influence, where personal connections might supersede merit-based regulatory decisions. Such practices undermine the integrity of governmental processes and foster a system of patronage over fairness.
• "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 suggests a coercive tactic, leveraging political connections to manipulate independent advisory bodies, thereby corrupting the corporate governance ecosystem.
• "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 concerns about opaque financial dealings and the potential for public officials to benefit personally or politically from regulatory approvals, blurring the lines between public service and private gain.
• "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 query reveals a distressing possibility of sacrificing social equity and anti-discrimination principles for regulatory expediency, potentially rolling back decades of progress in civil rights and corporate responsibility.
• "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 addresses environmental protections, indicating a willingness to disregard regulations designed to safeguard public health and the environment when enforcement is perceived as weak, leading to increased pollution and ecological damage.

The Lawyer’s Own Ethical Crossroads

Beyond client-driven dilemmas, Strine also explored the internal ethical challenges confronting corporate lawyers themselves. The fear of governmental retaliation for taking on disfavored causes, the pressure to conform to questionable client demands to avoid losing business, and the temptation to turn a blind eye to unethical conduct pose significant tests to professional integrity.

• "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 question highlights the chilling effect that political weaponization of regulatory power can have on pro bono legal work and advocacy for marginalized groups or unpopular causes, thereby limiting access to justice.
• "Should we allow our partners to sign on to amicus briefs in their personal capacity given the similar potential for blowback?" This concern points to the suppression of legal professionals’ individual rights to free speech and advocacy when their positions might be seen as critical of those in power.
• "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 encapsulates the "race to the bottom" phenomenon, where competitive pressures can force firms to compromise ethical standards to retain clients, leading to a systemic erosion of professional norms.
• "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 question delves into the complexities of complicity and willful ignorance, challenging lawyers to consider their indirect roles in facilitating potentially corrupt practices.
• "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 probes the limits of disclosure obligations, particularly in the context of securities regulation, where omitting crucial context can mislead investors and undermine market integrity.

Two Competing Conceptions of the Lawyer’s Role

Strine meticulously outlined two divergent philosophies concerning the role of lawyers in society: the "lawyer-citizen model" and the "zealous advocate model." He argued forcefully for the former, emphasizing its foundational importance for the rule of law.

The traditional lawyer-citizen model views the legal profession as one endowed with "special privileges," which come with a "corresponding duty to honor the system of law itself." This model transcends mere technical compliance, urging lawyers to counsel clients toward full respect for not only the letter but also the "obvious spirit" of the law. It is a "high-minded" approach that recognizes lawyers as guardians of the legal system, not just hired guns. This perspective aligns with historical ideals of legal professionalism, where integrity and public service are paramount.

In contrast, the zealous advocate model portrays lawyers as simply another type of "professional for hire." While acknowledging that a lawyer cannot directly assist a client in committing a crime or fraud, this model might deem it acceptable, or at least not a breach of professional conduct rules, for a lawyer to help a client engage in "illegal action that does not fit in these more serious categories." This interpretation risks reducing legal practice to a tactical game, where the goal is to exploit loopholes and push boundaries rather than uphold justice.

Strine unequivocally champions the lawyer-citizen model, particularly for corporate lawyers. He stressed that "Lawyers have special privileges that rest on our acceptance of unique responsibilities to the rule of law." The stakes, he argued, are "existential" for society and humanity if corporations, with their "vast impact," operate in a lawless manner. Therefore, it is incumbent upon 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 underscores the critical role of legal professionals in maintaining societal order and fairness.

Navigating the "Quicksand": Forensic Indicators for Lawyers

To help lawyers and their clients identify when they might be sliding into "legal, ethical and moral quicksand," Strine provided a set of "forensic indicators" or "yellow flags" that demand heightened professional caution. These practical guidelines offer a framework for ethical decision-making in ambiguous or challenging situations.

1. The Bipartisan Consensus Test: Strine urged 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 signals a significant warning. This test encourages a long-term, non-partisan view of legal norms, guarding against temporary political shifts influencing fundamental ethical standards.

2. 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?" Secrecy often serves as a telltale sign of impropriety. Legitimate actions rarely require elaborate concealment, whereas actions designed to skirt rules often depend on obscurity.

3. The Mirror Test / Adversary 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?" This challenges lawyers to apply a consistent standard. If a firm has previously condemned a certain action when performed by an opponent, a sudden reversal of opinion for a client suggests a pragmatic rather than principled shift in legal interpretation, necessitating a "good-faith and reasonable basis for the change in your view of the law."

4. The Universalizability Principle: Drawing on philosophical traditions from Jesus and Hillel to Kant and Rawls, Strine posed a variation: "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?" This encourages lawyers to consider whether they are willing to apply a principle to themselves and not just to others, especially when the principle offers a personal or client advantage. If such conduct would be deemed "objectionable and wrongful" when an adversary does it, the implications for the client’s proposed action should be carefully considered.

5. Quizzical Behavior: This flag highlights situations where "the inclusion of co-investors, the provision of economic or other benefits to certain people, or the hiring of particular advisors," occurs for reasons unrelated to merit, capital, or talent. Instead, the obvious "why" is to "obtain an advantage in obtaining government approval or support for a legally impermissible reason." When personal benefits are 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," it signals a clear breach of ethical conduct.

6. The "Gut Feeling" Test: Finally, Strine emphasized the importance of intuition. While corporate and securities lawyers typically resolve doubts in favor of their clients’ good faith, he advised: "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 visceral reaction, he explained, often means "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 test, while subjective, serves as a crucial final check, helping lawyers "retain your moral compass and give your clients the best chance to preserve theirs."

Pragmatic and High-Minded Reasons for Upholding the Law

Strine’s lecture was not merely a warning; it was a call to action grounded in both pragmatic and high-minded reasoning. He argued that honoring the letter and spirit of the law, irrespective of enforcement fidelity, ultimately serves the best interests of business lawyers and their corporate clients.

From a pragmatic standpoint, adherence to ethical and legal standards safeguards a corporation’s long-term reputation, mitigates future legal and financial liabilities, and fosters a stable, predictable business environment. Corporations that operate ethically tend to build greater trust with consumers, investors, and the public, leading to sustainable growth and resilience. The "silent good" that lawyers do daily—correcting misleading disclosures, preventing unfair transactions, and ensuring product safety—often goes unnoticed precisely because it averts harm and avoids negative headlines.

On a high-minded level, the integrity of the legal profession is inextricably linked to the health of a democratic society. Lawyers are uniquely positioned to shape corporate cultures that embed respect for stakeholders, communities, workers, and the laws of society. By counseling clients to pursue "profitable strategies by law-abiding, ethical means," they contribute to a system where corporations compete based on innovation and quality, rather than through illicit means or political favors.

A Call for Professional Resolve and a Vision of American Exceptionalism

Despite the "unprecedented, and hopefully fleeting moment" of ethical pressure, Strine concluded his lecture on a note of optimism, expressing confidence in the legal profession’s ability to rise to the challenge. He acknowledged human imperfection but asserted that ethical lapses are "the rare exception we should not allow to become more common, by the atrophy that will come from a failure to exercise our moral muscle in this moment."

He highlighted the crucial role of corporate legal advisors, both in-house and external, as "important safeguards for the rule of law." The difficult pressures stemming from "official departures from the principled adherence to the rule of law" do not imply the bar’s support for such departures or that it is "lightly bending to those pressures."

Strine implored the profession to acknowledge these pressures openly and "resolve to live up to our best traditions together." By collectively doing the right thing, lawyers can perform a genuine public service, ensuring that corporate clients operate within societal rules and that the pursuit of profit genuinely increases societal welfare. He drew a stark contrast between this ideal and practices seen in other nations: "Real economic growth occurs through innovation that creates better products and services, not through socially harmful externalities or concessions granted from elected officials and regulators for improper reasons, such as often happens in nations like Russia."

Concluding with a powerful affirmation of American values, Strine declared, "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 the audience that corporations are granted "citizenship of this nation under law on the explicit condition that they only do lawful business by lawful means." The law, he asserted, "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."

In this dangerous moment, corporate lawyers are "uniquely positioned" to ensure American corporations honor their societal charters and to help the nation’s "best traditions and fundamental premise survive." Strine’s lecture serves as a clarion call to the corporate bar to embrace the mantle of the "citizen-lawyer," honoring their oaths to the rule of law, their duty to future generations, and the dictates of their consciences, thereby performing a vital service for the nation when it needs their best.