by Michael Baroni

It is difficult to be a lawyer—particularly these days. Generally, the public does not appreciate us—unless and until they need us! Then, we have the difficulties, in my aspect of the practice of law, of the in-house general counsel. With rampant corporate abuses by M.B.A.s, who enjoy enormous salaries, and now with some of those corporations going under and taking government loans, who does the public and/or legal system blame? To no surprise, the easiest target is the in-house counsel. Although he or she makes a good salary, we cannot put up the defense that the CEO can. And, juries tend to dislike lawyers. That said, our present posthumously-awarded Franklin G. West Award Recipient, Don Gray, was an in-house counsel; and he was a great man who surmounted many challenges. Just ask his friends. A perusal study of other in-house lawyers indicates that they have not done so well; and if you email me I may send you my own short listing. But that is not the point of this column. Rather, I have learned that there are several proactive approaches that can avert harm coming the way of the in-house counsel. Please allow me to share some of what I have learned with you. . . .

Hindsight Vision. Ethical dilemmas mostly don’t hit a corporation General Counsel (hereinafter “GC”) between the eyes. Under hindsight’s 20/20 magnifying glass, however, fuzzy ethical issues can appear as a glaring red flag. Thus, any time you, as in-house counsel, are asked to quickly “sign off” on something, or to handle a matter where you don’t understand the “behind the scenes” perspective, stop and pull back. Dig for more information. Think of how a judge or jury will view any hasty action you take. Remember, the de facto presumption will be that you knew of your client’s evil intent, yet you willingly went along and used your specialized legal skills to further the crime (propelled by your desires of keeping your job, etc.). We lawyers are often per se unpopular people, even with other lawyers! 

Paper Trail. Keep things in writing which will protect your perspective and integrity at the time you made key decisions. If your CFO demands that you authorize contracts for moving money in and out of shell corporations, for example, send a memo expressing your concerns over the legality of such a scheme and ask for clarification on the scheme’s intent. If you know your company’s product is deadly yet the company is engaging in a massive cover-up, send memos to senior executives and the board demanding the company’s adherence to all relevant laws (document retention, Consumer Product Safety Act, etc.). 

Keep copies of all such documents in a very safe place. If you know a major ethics/legal storm is brewing, the best move you can make is to hire an outside lawyer and copy your lawyer on everything. You have a right to copies of your attorney work product—particularly if there’s a legitimate basis for fearing that you’ll need to defend yourself against false accusations. You need to set up your defensive position long before your company decides to kick you to the curb and make you the scapegoat. 

Signing Your Life Away. Don’t be pressured into signing things you don’t understand. If bosses demand that you sign something to effectuate your “legal approval,” then you must include a disclaimer. Also keep a file to show exactly what your approval was based upon (it can be an invaluable help later to show that you were given misleading information on a topic, yet at the time, you acted reasonably).

Ethical Transparency. If your company doesn’t have an ethics or compliance committee, you must strongly recommend that it set one up (with public companies, it’s mandatory to do so, but this goes for privates and non-profits as well). Simply having such a committee can greatly protect a company from liability, provided the committee reasonably handles all legitimate issues and follows each one through to a good faith resolution. If your company refuses to institute such an oversight body, you immediately know you’re mixed in with a dangerous corporate culture that prefers to do things in secret. You’re treading through a mine-field.

Changing Corporate Culture. I’ve seen some companies make a dramatic improvement in their culture by firing the worst employees, and having the GC engage in wide-scale efforts to change the culture—legal training, advisory memos, standing up for what’s right in meetings, proactively investigating ethics issues and following up on illegalities. But if it’s clear your efforts are having no effect, resign. By the way, it’s easier to procure a new job while you have a job. So start looking the moment you have even a little concern.

Leaking Information. The only time it may be advisable for you to leak information is if you’re being threatened with prosecution and need to prove your innocence. At such times, you’ll likely end up breaking the attorney-client privilege (provided your company did in fact commit evil deeds against your advice and is now seeking to pin you with their illegality).

Finally, if you’re even considering being a whistle blower, obtain expert counsel who specializes in whistle blower law and retaliation claims, preferably one who has a history of dealing with lawyers and the ethical dilemmas we face.

GC’s and other in-house counsel have a far more dangerous job than many of us realize, but learning the proper steps to guard yourself can ultimately save your career—and your freedom.

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Michael Baroni has 16 years of experience as an in-house counsel, including four General Counsel positions. He is an OCBA Board member, former Chair of the Product Liability section, and has published over 100 articles. He can be contacted at Michaelbaroni@hotmail.com. The views expressed herein do not necessarily reflect those of the Orange County Bar Association, the Orange County Lawyer, or its staff. Opposing viewpoints are always welcome.