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Company directors and executives aren’t the only ones feeling the heat of the corporate disclosure law enacted this year. The Sarbanes-Oxley Act, it turns out, has something in store for lawyers, too. A little-scrutinized provision of the new law directs lawyers, both inside and outside counsel, to report possible wrongdoing to the chief executive officer or chief financial officer of the company. And that goes for any lawyer, from the partner managing the relationship to a first-year associate pitching in on a 10-K. “When those regulations kick in, this will be one of the most dramatic changes in legal ethics to occur during the careers of lawyers in practice today,” said Boris Feldman, a Wilson Sonsini Goodrich & Rosati partner. Attorneys still have a few months to sweat it out as they wait for the Securities and Exchange Commission to issue guidelines on how the agency expects lawyers to comply with the new law. Like most of the Sarbanes-Oxley Act, the real effects of the provision calling for attorney disclosure won’t be known for some time. But with more than three months before the late January deadline for the SEC, there’s plenty of time to plan for what the commission may have in store. Richard Peers, a partner at Heller Ehrman White & McAuliffe, said the law forces the SEC to go beyond its usual purview of regulating companies and into overseeing lawyers. “It will mean that firms will need to think about and put into place procedures in a way that doesn’t wreak havoc with the relationship with the client,” Peers said. How the relationship partner will interact with clients appears to be most vulnerable to the impending new guidelines. Tracy Edmonson, a Latham & Watkins partner, said new rules are going to create tension between lawyers and their clients. “Clearly everybody wants to do the ethical things but you’re also servicing a client,” Edmonson said. The new guidelines will be distracting, Edmonson said. She contends they’re unnecessary because attorneys must already comply with the American Bar Association’s rules of professional conduct. Not everyone is bemoaning the impending arrival of new guidelines for lawyers. Stanford Law School ethics professor Deborah Rhode eagerly applauds the provision contained in Sarbanes-Oxley. “The path of easiest resistance is often to see no evil and hear no evil,” Rhode said. This “changes the priorities of in-house counsel and outside counsel, which historically have been far too preoccupied with professional and client self-interest.”

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