Normally, after a big piece of business news, journalists get a succession of press releases punting a legal angle. Super-injunctions, bribery, Budget Day, workplace bullying; you name it, the PRs are on it. So it was notable last week that we got zero releases from any major law firm on the implications of the Panama leaks.
Law firms’ silence on the issue can be attributed to a series of reasons. First, everyone’s scurrying around checking their firewalls. Second, HR is devising all sorts of policies about personal use of computers. Third, they’re not altogether sure a document won’t come out that might point to a referral connection with Mossack Fonseca, even at several removes. And finally, the Ayn Randers in every partnership are peddling the faux-worldly line that the Panama leaks aren’t really news since everyone knew about it. (To which we might reply: if you knew about it, you certainly didn’t work for the FCA.) That line is the cousin of ‘it’s legal and it’s private.’ Except that’s not true either: tax is social, political and therefore reputational.
I simply pose the question: in the rush to become more client-focused are lawyers forgetting how to behave as citizens? As one chief executive of a global firm remarked to me last week, “Are we at the stage where we’re compelled to whistle-blow on our clients when we think they’re undertaking an activity that is strictly legal but morally hazardous? Not yet, but you have to take that a bit more seriously.”
Let’s not call it morality for the moment. That’s too weighty a term for most people in commercial life – particularly since the Western world has moved away from a guilt culture and definitively into a shame culture. So instead, let’s call it reputation. And after all the urgent discussions on cyber security investment, law firms should be focusing on reputation most of all.
London’s pre-eminence as a financial centre is based on the rule of law but that status may be eroded, particularly since the FCA has demanded that banks and other financial institutions hand over any evidence of dealings with Mossack Fonseca by the end of this week. And as The Lawyer revealed on Friday, the SRA is flexing its muscles too.
Since the financial crisis lawyers have got off pretty lightly as a whole. There’s been huge opprobrium towards the bankers, everything from screaming headlines to select committee appearances. But everything they did, every product they devised, was signed off by lawyers. The refrain trotted out by some commercial lawyers that the client takes the moral decision and they just advise on the law is looking increasingly threadbare, and the profession is poorer for it.
