Steroids and legal ethics codes: are lawyers rational actors?

• Author: Zacharias, Fred C.

A TRIBUTE TO FRED ZACHARIAS ([dagger])

During the editing of this Article, on the afternoon of November 11, 2009, Professor Fred Zacharias died at the age of 56.

Professor Zacharias devoted his entire adult life to professional responsibility issues, both as an attorney and as a scholar. During the past two decades, he wrote over sixty leading law review articles in this field. Professor Zacharias 's influence on the development and exploration of legal ethics issues was immense and multifaceted.

Wholly beyond his academic contributions to the field, as an individual, Professor Zacharias was a person of consummate integrity. That quality defined him. Fred not only valued the search for truth and the improvement of justice, but unerringly sought these ends. Moreover, he did so not only when these goals were convenient and popular, but even when they were not.

Fred was his own man. He did not follow trends. He did not vote with the crowd. He thought deeply and came to his own conclusions. And was not afraid to voice them.

What follows is the last law review article Professor Zacharias wrote. In September, Fred came to the conclusion that his battle with cancer would likely be over by year's end, and that he would accordingly be unable to complete the editing process of this piece, and asked us if we were willing to complete his final work. It is a testament to, and typical of Professor Zacharias that even in the final days of his life, he wanted to complete his academic work and fulfill what he felt were his obligations to the law review students who had accepted his piece.

There are few individuals who share the commitment and integrity of Professor Zacharias. He will be sorely missed.

INTRODUCTION

Over time, legal ethics codes have become increasingly specific and enforceable. (1) Yet at root, they remain a mixture of hortatory and concrete mandates, some never enforced, most rarely enforced, and none universally enforced. (2) Law and economics scholars--and other observers who internalize a "bad man" theory of human behavior (3)-assume that ethics provisions that do not result in discipline have little, or perhaps even counterproductive, effects; (4) hortatory or generalized codes allegedly do not create incentives producing appropriate lawyer conduct. (5)

Despite these perspectives, the American Bar Association (ABA) and state code drafters continue to rely upon mixed rulemaking. One explanation might be self-interest; by maintaining the illusion of self-regulation through provisions that sound high-minded, the bar sometimes avoids external regulation that might have bite. (6) Another is the inability of code drafters to achieve consensus on the substance of rules, resulting in compromised provisions that allow lawyers to acknowledge ideals but to engage in a range of conduct. (7)

This Article suggests a third explanation. Although underenforced ethics provisions have costs, (8) they can also serve a valuable function. They address and guide the conduct of a segment of the bar that does not act entirely upon financial and reputational incentives in ordering its affairs. Some lawyers, for a variety of reasons, simply are willing to follow the rules even if doing so may be economically disadvantageous.

The law and economics response would likely take one of two forms. First, true economists would suggest that any reason for obeying a rule, including psychic benefits, can be characterized as "economic" and therefore fit into the economic analyses of legal ethics rules. (9) Second, some observers assuming a "bad man" vision might simply deny that people (including lawyers) ever act, or should act, on non-financial or non-quantifiably economic incentives. (10)

This Article calls these perspectives into question by drawing from the recent history of steroid use in baseball a series of character traits that prompted baseball players to use or avoid performing-enhancing drugs. (11) One can be fairly confident that a range of attitudes toward rules forbidding steroid use has existed, causing some players to employ steroids, others to dabble, and yet others to religiously avoid them. (12) This Article suggests that the bar consists of lawyers with the same range of approaches to legal ethics rules. If that is correct, hortatory rules cannot fairly be criticized for failing to sanction "bad man" lawyers, because those lawyers may not be the targets of the rules. (13) Ethics code drafting, however, can be faulted for failing to adequately identify the categories of lawyers that particular rules are designed to influence.

Three caveats should be noted at the outset. First, this Article focuses on ethics regulation that addresses conduct in which lawyers must accommodate their own interests or client demands against potentially contrary interests of clients, courts, specified third parties, or society as a whole. The codes include provisions that serve a host of secondary functions, including facilitating communications among lawyers and the courts, (14) setting defeasible default rules that lawyers and clients can contract around, (15) reducing agency costs, (16) and enhancing efficiency in the legal system. (17) Market forces (including the desire for reciprocal cooperation) and judicial enforcement of these rules increase lawyers' willingness to adhere to them. Such rules are not this Article's primary concern; it addresses those provisions that law and economics critics intuitively might consider ineffective--generalized, hortatory, or underenforced standards that typically relate to morality or professionalism concerns.

Second, this Article does not address the moral questions of whether and when lawyers might be justified in violating professional rules. (18) This Article considers the separate, more practical question of whether professional rulemakers can reasonably expect hortatory or unenforced regulation to influence the bar. (19)

Finally, this Article does not claim to describe the actual intentions of ABA or state code drafters or to justify particular professional rules. (20) It simply addresses the general criticism that underenforced rules are universally ineffective. When code drafters feasibly can, or should, employ such rules is a question that this Article leaves for another day.

1. THE LESSONS OF THE STEROID ERA

   Classic law and economics analysis considers the incentives produced by regulation of unwanted behavior. If a law or rule outlaws particular conduct, but there is a benefit to be achieved by engaging in the conduct, the rule's effectiveness will depend on the likelihood of being caught, the sanctions, and the actor's risk-averseness. (21) The rational actor will continue to engage in the conduct despite the prohibition if the rule is not enforced or weakly enforced, the benefits of violating the rule (on average) exceed the likely sanctions, and there are no other costs associated with violations. (22)

   The key to this risk-rewards analysis is the notion that "no other costs" associated with violating the law or rule exist. Law and economics freely acknowledges the existence of real non-financial costs, assuming that these must be factored into any balance. (23) The costs may include culturally produced byproducts of regulated conduct, including reputational effects and personal psychological impacts of violating a law or being caught. When the other costs are sufficiently high, a rational actor may forebear from violating a law or rule even if he is likely to get away with the violation or the tangible benefits associated with the violation far exceed the probable sanction.

   Consider the history of performance-enhancing drugs in baseball. At least for drugs that could not be procured without a lawful prescription, steroid use was always impermissible. (24) At some point, baseball instituted a formal policy forbidding steroid use, but did not enforce it. (25) Then, limited drug testing was instituted, somewhat increasing the risk of apprehension, but not significantly. (26) Eventually, penalties increased and became mandatory, and more stringent testing procedures were implemented. (27)

   At each stage, in theory, rational-actor baseball players had to make a choice: employ steroids and risk sanction or forgo the performance-enhancing benefits. As the penalties grew, the imposition of sanctions became regularized, and as the likelihood of apprehension through testing increased, the incentives to demur increased as well. Throughout the period, however, some rational players determined that the benefits of taking steroids warranted the risks.

   For ease of analysis, one can categorize the players into five groups. (28) The categories are summarized for reference purposes in Table 1, but are described more fully below.

   First, there are the players who took performance-enhancing drugs. These are the "rational actor cheaters" or "bad men," such as Jose Canseco, (29) Jason Giambi, (30) and probably Barry Bonds. (31) They simply measured the rewards of taking steroids--including improved performance and the resulting contractual and marketing benefits--against the likely costs, choosing to pursue the benefits. Some may have even taken pleasure, psychologically, in adopting a "win-at-all cost" approach, believing that this one-track mindset made them attractive in the mold of aggressive winners such as Vince Lombardi, (32) Leo Durocher, (33) and Pete Rose. (34)

   Ken Caminiti, the first player to publicly admit using steroids, is a good example. Up to his death, Caminiti defended his decision to rely on performance-enhancing drugs. "If a young player were to ask me what to do," Caminiti said, "I'm not going to tell him it's bad.

   Look at all the money in the game: You have a chance to set your family up, to get your daughter into a better school." (35) Caminiti continued with a view to the competition: "[I] can't say, 'Don't do it,' not when the guy next to you is as big as a house and he's...