Business is booming for the white-collar criminal defense bar.

The government crackdown on corporate fraud continues, though some defenders debate whether the trend is past its peak. Numerous high-profile prosecutions have come and gone, yet plenty of investigations remain in the pipeline, defenders report.

Nevertheless, corporate officials — both the legitimately worried as well as the unnecessarily paranoid — see themselves as possible criminal targets and are lawyering up, defenders say.

In a given investigation, there now are two or three times the number of defense lawyers involved, said William B. Mateja, a former Department of Justice senior counsel. He served as point man on the department’s Corporate Fraud Task Force, which spearheaded the crackdown.

It is commonplace for a company’s board of directors, the board’s audit committee, involved employees and the company itself to retain separate counsel, said Mateja, now a member of Fish & Richardson’s white-collar defense group in Dallas and Washington.

What’s spurring this significant ramp-up in corporate defense work? A major shift in the federal government’s approach to corporate crime, Mateja said.

It all stems from the government’s practice of considering indictments not just against individuals but also against companies, he said. Companies can avoid or defer prosecution by handing over to the government any findings from their internal investigations or implicating wrongdoers. That Justice Department policy was in effect earlier but was underscored in 2003 in the so-called Thompson memo, issued by then-Deputy Attorney General Larry D. Thompson.

A BOON, BUT MISGIVINGS

In theory, creating conflicts between a company and its allegedly criminal officials helps the government get to the facts of a case faster. In practice, it has been a boon for defenders.

“It’s absolutely a criminal defense lawyers’ employment initiative,” said Stephanie A. Martz, director of the White Collar Crime Project at the National Association of Criminal Defense Lawyers. “Definitely, this is a boom time right now.”

Even so, many white-collar defenders decry the Justice Department’s cooperation program.

“The fact that business is good doesn’t mean that it’s either pleasant or healthy for the system,” said Joseph F. Savage Jr., a former prosecutor and member of the white-collar defense team at Goodwin Procter in Boston.

“When I first started [defense work], the government would go after people, not typically the company,” he said. “Now it’s a given the company is in the mix.”

The Thompson memo says that indicting corporations for wrongdoing “enables the government to address and be a force for positive change of corporate culture, alter corporate behavior, and prevent, discover, and punish white collar crime.”

The memo adds that in gauging the extent of a corporation’s cooperation, the prosecutor may consider the company’s willingness “to identify the culprits within the corporation, including senior executives; to make witnesses available; to disclose the complete results of its internal investigation; and to waive attorney-client and work product protection.”

The idea behind the policy was to “incentivize” cooperation, said Mateja, who co-wrote the memo.

It is creating other incentives, too, such as spurring companies to save money at the expense of their employees, said Gerald H. Goldstein of Goldstein, Goldstein and Hilley, a San Antonio white-collar defense boutique. It now is common for a company to offer to pay legal fees of an employee under government investigation only if the employee agrees to waive his or her Fifth Amendment right against self-incrimination, he said.

‘A NATURAL TENSION’

Prosecutors use cooperation pressure as a “very powerful tool,” said Mary Jo White, chairwoman of New York-based Debevoise & Plimpton’s 200-plus-lawyer litigation practice.

“It is easy, legally, to charge a company with a crime,” said White, the former U.S. Attorney for the Southern District of New York. “If an employee committed a crime, a company can legally be charged. So there is a natural tension in every representation between counsel for the targeted employees and the company.”

But coercing a company to cooperate by waiving a privilege under threat of indictment is “being asked for too routinely and too often,” White said. “Prosecutors shouldn’t be saying, ‘Waive the privilege or else be indicted.’”

There are ways companies can cooperate without violating the privilege or hurting clients, said Mateja, who serves as co-chairman of the white-collar committee at NACDL.

As for his new role as a defender, he said, “Most of the time companies feel good to have someone who ran the corporate fraud show and who understands what it’s going to take to avail themselves of the benefit of cooperation.”

Mateja is one of several senior government officials who recently turned in their badges and switched to the defense table.

“There is very high demand for both the skills and the credibility they bring to the private sector,” said White, noting that 10 partners in her group are former federal prosecutors.

Here is a sampling of some senior government officials who have made that move in recent months:

Christopher A. Wray, former head of the Justice Department’s Criminal Division, now chairs the white-collar crime group at Atlanta’s King & Spalding. Including Wray, King & Spalding’s group has added three new partners, all prosecutors.

McKenna Long & Aldridge beefed up its corporate defense group by hiring Joshua Hochberg, former fraud section chief in the DOJ’s Criminal Division, and Jason Klitenic, former deputy general counsel at the Department of Homeland Security.

Spencer C. Barasch left a 17-year career with the Securities and Exchange Commission and his most recent post as senior enforcement official in the Southwest to lead the corporate compliance and defense team at Houston-based Andrews Kurth from its Dallas office.

Stephen M. Cutler, the SEC’s former enforcement division director, left the agency to co-chair the securities department of Wilmer Cutler Pickering Hale and Dorr.

Michael S. Schachter, a former Assistant U.S. Attorney for the Southern District of New York, who prosecuted Martha Stewart and her stockbroker among other high-profile matters, joined the white-collar defense practice at Willkie Farr & Gallagher in New York.

“The marketability is as strong as it has ever been” for experienced government officials in the private sector, said Barasch. “There is a need for people like us to keep companies and financial firms pointed in the right direction.”

Some defenders seem wistful about the “old days” when white-collar work was purely adversarial and more straightforward, said Stephen J. Bronis, co-chair of the white-collar crime committee of the American Bar Association’s Section of Criminal Justice.

Now the government is in effect getting defense attorneys to do its work, said Bronis, who heads the white-collar practice in the Miami office of Washington litigation boutique Zuckerman Spaeder. “Sometimes when I wake up, I wonder if I haven’t been deputized an Assistant U.S. Attorney.”