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In-house attorneys must not participate in illegal activities for their company, even if their business superiors direct them to, and even if the illegal acts do not benefit the attorney personally in any way, participants in a SuperConference ethics panel agreed.
The panel, moderated by Jenner & Block Partner Richard F. Ziegler, dealt with "An In-House Perspective on Professional Responsibility." It took an in-depth look at two very recent cases in which in-house lawyers were indicted and convicted in federal court of fraud, simply because of their work preparing contractual documents for their company at the direction of their superiors.
In each case – those of Mark Kipnis of Hollinger International and of Robert Graham of General Re Corp. – the drafting of the contracts was viewed by prosecutors and a jury as part of a scheme to mislead, even though neither attorney profited personally. In the Hollinger case, prosecutors said noncompete contracts were used to conceal improper payments to company officials, and in the General Re case, a reinsurance contract was said to be a sham to help another company, AIG, boost its loss reserves.
"This result is not really surprising," said panelist Christian S. Na, Vice President and General Counsel of Danaher Corporation's Product ID Division. "The attorney's job is precisely to prevent the company from engaging in self-dealing and conflict of interest."
Panelist Jason L. Brown, Director of Legal/Senior Counsel of PepsiAmericas, said both attorneys who were convicted no doubt "felt that they were zealously representing their client. But they didn't necessarily ask if what they were doing was right."
Panelist John R. Allison, Assistant General Counsel of the 3M Corporation, said it is "very important for a GC to create an environment conducive to compliance, and to do so, it's best to foster a reporting-up policy, in which any employee who has a question about the company's ethics will have a place to go."
Mr. Na concluded by saying that the best way to describe the in-house counsel's role is as "the moral compass of the company."