The greatest challenge for general counsel and other inside lawyers is to reconcile the dual — and at times contradictory — roles of being both a partner to the business leaders and a guardian of the corporation’s integrity and reputation. Successfully resolving this tension is essential if a company is to attain the two fundamental goals of contemporary capitalism: high performance with high integrity.
In recent years many general counsel have failed as guardians. In this decade’s first great wave of scandals, beginning with Enron Corp. and centering on fraudulent financial practices, the question was, “Where were the lawyers?” In-house counsel were either excluded from key decisions, or they failed to ask aggressive questions about whether problematic actions were legal or appropriate. But, compared to CFOs, they generally escaped formal sanctions.
