Lawyer independence: from ideal to viable legal standard.

• Author: Michels, Kevin H.

ABSTRACT

When, if ever, does a lawyer have an obligation to exercise independent judgment? While the question drives at the deepest commitments of the profession, it has been left largely unexplored in our leading treatises on legal ethics and lawyering. Lawyers, scholars, and judges have waxed eloquent on the ideal of independence, and have despaired of its prospects of renewal in a competitive, market-driven profession. The courts, however, have offered limited guidance on the question of lawyer independence. Indeed, the impression that one might gain from a review of the case law and treatises is that lawyer independence--whatever its virtues--is more a lost ideal than a legal requirement.

In fact, however, Rule 2.1 of the Model Rules of Professional Conduct (adopted by nearly every state) requires that lawyers "exercise independent professional judgment" in "representing a client." This demand raises a host of questions about the lawyer's role. What is lawyer independence? If lawyers are "agents" who seek to carry out client objectives, how can lawyer independence be squared with the notion of the client as decisionmaker and principal? Is lawyer independence enforceable, or does the paucity of cases construing the requirement suggest that it can never be more than an aspiration? Can we frame a standard that is sufficiently precise for lawyers to understand when they may not defer to client directives?

This Article seeks to answer those questions. In so doing, it seeks to develop a viable legal standard of lawyer independence grounded in Model Rule 2.1. The Article considers the purpose of lawyer independence, when it applies and when it does not, and what it requires of counsel. It contends that the law of lawyer independence, once understood, will require attorneys to revisit core assumptions about their role and will substantially reduce the incidence of wrongdoing in corporate transactions. The Article invites states to breathe life into a rule that has lain dormant on their books for too long.

CONTENTS I. INTRODUCTION II. AGENCY: THE ATMOSPHERE OF ASSUMPTIONS III. DEPARTING FROM AGENCY: WHY AND WHEN A. Introduction B. Why Lawyer Independence? C. When Must the Lawyer Be Independent? 1. Eliminating Advocacy 2. Nonadvocacy Assistance D. Agency and Independence Reconciled IV. WHAT DOES INDEPENDENCE REQUIRE? A. Introduction B. Advice 1. Independence 2. Professional Judgment 3. Candor C. Transactions V. AN INVITATION TO THE STATES A. Introduction B. The Opportunity for Reform C. Attorney Discipline D. Attorney Liability E. Relation to Other Standards VI. CONCLUSION I. INTRODUCTION

When, if ever, does a lawyer have an obligation to exercise independent judgment? While the question drives at the deepest commitments of the profession, it has been left largely unexplored in our leading treatises on legal ethics and lawyering. (1) Lawyers, judges, and scholars have waxed eloquent on the ideal of independence and have despaired of its prospects of renewal in a competitive, market-driven profession. (2) The courts, however, have offered limited guidance on the question of lawyer independence. (3) Indeed, the impression that one might gain from a review of the case law and treatises is that lawyer independence--whatever its virtues--is more a lost ideal than a legal requirement.

In fact, however, Rule 2.1 of the Model Rules of Professional Conduct ("Model Rules"), adopted in nearly in every state, (4) requires a lawyer to exercise "independent professional judgment" and provide "candid advice" in "representing a client" (5)--demands that I will refer to collectively as "lawyer independence." (6) The Rule raises a host of questions about the lawyer's role. What is lawyer independence? Could a demand for lawyer independence, once fully understood and implemented in practice, change our understanding of the attorney's role? Is lawyer independence enforceable or does the paucity of cases construing the requirement suggest that it can never be more than an aspiration? (7) If lawyers are "agents" who seek to carry out client objectives, how can we square a demand of lawyer independence with the notion of the client as decisionmaker and principal?

The stakes are high. Consider the lawyer's obligations in the following scenarios:

* The client consults the lawyer about consummating a transaction, but provides little business background on the nature and purpose of the transaction and discourages the attorney from learning more, while insisting that the attorney "document" the deal.

* The attorney suspects that the client's proposed transaction is fraudulent or criminal, but without more information has no way of knowing whether, in fact, it is. The client directs the attorney to consummate the transaction without inquiring into its propriety.

* The client wants to engage in an action and asks the lawyer whether it is lawful. The lawyer sets out to find a way to characterize the behavior as lawful in order to help the client proceed as he wishes, perhaps with minor changes in the proposed behavior to make it at least "arguably" satisfactory.

* The client wishes to undertake a transaction that violates the law. He asks the lawyer to find a way to structure the transaction to satisfy the literal dictates of the law at the expense of what the lawyer concludes are the law's real objectives.

While it may not be immediately apparent, each of these scenarios raises questions of lawyer independence. Each asks, ultimately, whether the attorney is best understood as an agent of the client, or whether her role transcends agency. The first of these examples implicates questions about the deliberative role of the attorney. Can she accept a circumscribed, limited role if the client insists, or does some obligation or larger interest demand a deeper involvement, despite the client's contrary directive? The second example is complicated by the fact that the lawyer does not know that the proposed transaction constitutes a crime or fraud. Does independence require the attorney to inquire more deeply into the facts to determine whether the transaction poses problems? In the third example, can the lawyer allow the client's objectives to shade her assessment of what the law requires? In the fourth example, must the attorney press her concerns on the client, or is the client's interest in facilitating the transaction and its "literal" compliance reason enough for the lawyer to push forward with the deal?

As the examples above make clear, questions of lawyer independence arise regularly in legal practice, especially in the counseling and transactional settings. They pose delicate questions regarding the balance of power in the attorney-client relationship. These questions have simmered just below the surface of the scandals that have erupted over the last few decades. The refrain "Where were the lawyers?" has echoed through every major business scandal from the savings-and-loan debacle of the 1980s through the corporate scandals in the 2000s. (8) In many of these cases, the lawyers did not ask questions about transactions that appeared suspicious. (9) The Model Rules appear to encourage willful blindness by prohibiting a lawyer from furthering a transaction only when she knows that the transaction is wrongful. (10) The knowledge standard seeks only to prohibit attorney complicity in a client's crime or fraud--an obligation as obvious as it is insufficient to counter client wrongdoing. The critical, unanswered question is whether attorneys have an obligation to acquire knowledge before acting, a question that until now has not been examined through the lens of lawyer independence.

Questions about lawyer independence lie at the center of the recent controversy over the role of Justice Department attorneys in advising the Bush Administration on whether certain interrogation methods violated international prohibitions on torture. (11) The questions may appear superficially distinct from the counseling and transactional questions described above, but they trace their origins to the same source--lawyer independence. If, as some have argued, the advice contained in the Justice Department memoranda was biased, (12) may lawyers proceed under a "partisan" view of legal counseling, in which their legal interpretations and advice are influenced by the client's objectives? ff not, how can lawyers serve their clients--who, after all, retain and compensate them to fulfill client objectives? As the earlier examples suggest, these issues arise not only or even principally in the government setting. Our purpose here is not to assess the role of lawyers in the Office of Legal Counsel scandals, but to look to the foundational questions posed by lawyer independence in the lawyer-client relationship.

In short, this Article seeks to develop a viable theory and legal standard of lawyer independence grounded in Rule 2.1. While this Rule has been in effect in the overwhelming majority of states for nearly a quarter of a century, (13) its impact on the courts and bar has been negligible. While a number of reasons explain the courts' neglect of this Rule, (14) one critical barrier to its application is the absence of a viable account of lawyer independence--its underlying rationale; when it applies; what it requires of counsel; how it relates to the traditional role of lawyers as agents of clients; and how courts, disciplinary authorities, practitioners, and civil claimants might apply the Rule. This Article seeks to provide such an account.

Part II sets the stage for the inquiry into independence by sketching the nature of the attorney-client relationship as it is currently conceived--with a minimal commitment to lawyer independence. It argues that the current conception of lawyering is grounded on a principal-agent model that emphasizes client control. Part III begins by considering the tension between the agency conception of lawyering and the call for...