The R in CSR  

10 January 2008:

Since my new year’s resolution is to give post-crunch/crystal ball pieces a rest, I thought I’d turn to an issue that could be moving up law firms’ agenda in 2008: the ethics of advising morally-questionable clients.

Recently there has been some discussion — in a thoughtful Legal Business article — of the role of lawyers representing vulture funds in aggressive litigation to recover debt from poor ‘third-world’ nations.

Personally, I am not convinced by the argument that advising such funds on debt recovery is a bad thing per se. If you accept the idea that indebted nations borrow commercially then there has to be a procedure to repay that debt or they won’t be able to borrow anymore. That’s not to deny that there have not been individual cases where these funds have pursued cases with dubious tactics, however.

But it also seems appropriate to question the decisions that law firms make in terms of which clients to act for at a time when large firms are increasingly rolling out corporate social responsibility (CSR) programmes.

Indeed, it’s not at all apparent that law firms have really thought out where CSR initiatives will lead, so far viewing them more as a marketing tool than as an ethical benchmark that they could be judged against.

Several years back, Legal Week did some work on the issue of advising controversial foreign regimes and it was clear that commercial firms were desperate to stick to the line that, as long as it was not illegal, they should advise. It is a line of argument that had a certain cold-hearted logic to it, though it seemed out of date with the wider debate about CSR in the City a decade ago.

There have been scrapes since then. Several City firms were targeted for advising interests linked to Burma and there was a memorable occasion when the managing partner of Huntington Life Sciences’ law firm begged Legal Week not to disclose the firm’s identity.

But this convenient catch-all defence now seems ever more inadequate for firms that have created their own CSR programmes, which are surely now presenting themselves as good corporate citizens concerned with more than just profit. Are law firms really ready to follow through on their fine words?

You still get the mildly farcical situation of law firms banging on about saving the environment - which, as service businesses, they have little impact on - while preferring to avoid discussion of business ethics, on which they have a good deal more influence.

The reality is that they are still like many businesses: they make decisions, at least until recently, on the basis that they will never have to justify them to outside scrutiny. Yet the likelihood is that they will, in an age of unprecedented transparency for the profession, come under more pressure to justify their clients. And if they can’t, maybe they shouldn’t take them on in the first place.

Source: Alex Novarese, Legal Week

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