Thank you for sharing!

Your article was successfully shared with the contacts you provided.
It’s a perilous time to be an in-house lawyer. Corporate counsel’s response to a government inquiry or enforcement action, particularly at the outset, can make a crucial difference to their company and to their career. Indeed, allegations about in-house counsel figure prominently in some of the most visible corporate scandals, including those at Tyco International Ltd. and ImClone Systems Inc., and, of course, the prosecution of Arthur Andersen. While each crisis presents different issues, there are basic steps that all general counsel should consider when the government calls. OUTSIDE HELP At the first inkling of an impending federal investigation or regulatory or enforcement action, general counsel should bring in experienced, independent outside lawyers to advise the company and to serve as a buffer between the corporation (including its in-house counsel) and the government. Often in the early stages, corporate counsel’s relationship with federal investigators starts off badly. Government investigators typically view in-house counsel as corporate officers who effectively are the company, rather than as counsel who protect their client’s legal interests. Outside counsel — particularly those with past experience dealing with the government — can ideally get the relationship with the government investigators off on the right foot. Also, they may be able to arrange for time for the company to conduct an internal investigation into the suspicious activity. Equally important, when senior management or directors are alleged to be involved in suspected misconduct, outside counsel can provide a buffer within the company. This is especially important in situations where individuals suspected of wrongdoing may have worked alongside or above the GC. DON’T DELETE In-house lawyers should also ensure that an effective document and information retention policy is in place, that this policy is extensively communicated throughout the organization, and that it is scrupulously observed. Many companies began beefing up their policies for retaining documents, e-mails and other electronic information in light of the Andersen prosecution. But if a business faces a government inquiry, it is imperative that it go beyond the typical measures. Simply sending out a general notice by e-mail will not suffice. It is essential that all employees who have access to information — virtually everyone in today’s networked business structures, not just managers — get the message. Even the slightest rumor of noncompliance, whether intentional or inadvertent, needs to be investigated immediately. A third important step is for in-house and outside counsel to advise, promptly, senior executives and the board of directors (or at least the relevant board subcommittee) about the existence of the government investigation. Next, a full-scale internal inquiry should be launched to determine the facts surrounding the suspected impropriety. A complete understanding of what has occurred is essential to assessing the risk to the company, formulating its legal strategy, and managing the likely negative publicity that may arise solely as the result of a government investigation. ONE VOICE The general counsel and outside counsel should also enlist the company’s corporate communications and media relations personnel as part of their core crisis management team, as well as consider retaining a respected outside public relations firm. The business must speak publicly with one voice, and in a manner that is approved by counsel. At all times in this harrowing process, in-house lawyers must be mindful of their overriding obligation to their client — the company — rather than to any senior executives, managers or directors. By adhering to that basic principle and employing the initial-response procedures, corporate counsel should be able to serve their clients with integrity and effectiveness, while at the same time staying out of the government’s (and senior management’s) crosshairs. Lawrence Byrne is a partner at White & Case in New York, where his practice concentrates on white-collar criminal defense, regulatory matters and civil litigation. He is a former Assistant U.S. Attorney in the Southern District of New York and a former deputy chief of the Justice Department’s organized crime and racketeering section.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.