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An introduction to the ethical leadership for in-house lawyers project

Early in June, the Centre for Ethics and Law, UCL Laws, published the first stage of our Ethical Leadership for In-House Lawyers Project. In this project, we are collaborating with in-house lawyers to understand the ethical challenges they face and help them build their capacity to deal with such challenges. The first stage, the Mapping the Moral Compass Report, is now available in executive and long form formats.

This report provides a unique profile of real differences within the in-house community. We examine the in-house role through individual and team orientations; professional orientation; ethical infrastructure; ethical pressure; and relationships with the employer. We then relate these to externally validated indicators of ethical inclination (moral attentiveness and moral disengagement). We do so with 400 in-house lawyers from business, public service and the third sectors. It is a report that has begun to spark discussion in the US and in Asia, as well as here in the UK. Most importantly, in-house lawyers themselves tell us it is a report that is both rich and thought provoking. This is not something practising lawyers typically say of academic work; so, what kinds of things does it tell us?

Most in-house lawyers have a strong commercial, client service ethos

The first is that in-house lawyers have varied ways of thinking about their role. Most (but not all) identify strongly with a commercial, get the job done for the client, orientation. 65% of our respondents agreed that achieving what their organisation wants has to be their main priority. Law is after all a service profession and the legal services zeitgeist is to “get commercial”.

They also tended to identify, only slightly less strongly, with an independence orientation and an ethical orientation. The latter sees a role for lawyers in identifying and leading on the right thing to do when the law is uncertain. However, there is also support, albeit slightly weaker again, for a neutral advisor orientation: the idea that the lawyer merely advises and the client decides. This is an understandable attitude that comes with the risk that lawyers succumb to the “I was only following orders” problem. A final orientation split our respondents much more starkly. We call it the exploitation of uncertainty orientation.

A minority, albeit a substantial minority, agreed that part of their role was to exploit uncertainty for the organisation they worked for (including, for some, actively exploiting loopholes). Interestingly, this most controversial of the orientations was associated with the least ethically inclined of our in-house respondents. Loopholers may be prone to (other) ethical lapses.

A narrow construction of commerciality can be problematic

Our research suggests that in-house lawyers and their employers should take a measured approach to the idea of “getting commercial”. That measured approach would ask what is sought from a lawyer when asking them to “be commercial”. Some elements of commerciality are unproblematic and desirable: understanding the business; communicating relevantly, in ways colleagues can understand; finding practical solutions to problems; and managing costs effectively. For other elements, there may be problems: being commercial can be code for cutting corners or a euphemism for sharp practice.

If the needs of the business are in tension with the law or with ethicality, then a commercial orientation, narrowly construed, has the potential to put a lawyer in an uncomfortable position or worse.

Our research supported these kinds of concerns up to a point. 30% of our sample agreed that an emphasis on commercial awareness sometimes inhibits the in-house lawyer in performing their role. Interestingly, 12% agreed that, where commercial desirability and legal professional judgement are in tension, commercial desirability is more important. Although a strong majority of respondents indicated a willingness to say “No” to employers, that is, to act on occasion as legal policemen and were willing to back that up with further action, 9% of our respondents indicated that saying “No” to the organisation was to be avoided, even when there is no legally acceptable alternative to suggest.

Rather than reject the idea of a commercial orientation, it is perhaps more important to emphasise the positive influences of other orientations on ethicality alongside commerciality. In particular, ethical and independence orientations were stronger among our most ethically inclined group (we called them the Champions) and had the strongest positive impacts of our individual orientations on ethical inclination. We also found that the group of lawyers most unlikely to be ethically inclined, we called them the Comfortably Numb, were more likely to rank a commercial orientation most highly.

Team culture can positively impact ethical inclinations

Very importantly, individual orientations were not the only factors associated with greater ethical inclination; far from it. Team orientations also had an influence: teams that spoke about ethical concerns and the impact of their work on society were more likely to be associated with inclination to behave ethically. Our least ethically inclined group had teams generally more concerned with financial performance.

Similarly, professional orientation is important. In-house lawyers thought about their ethical obligations in three sets. One ‘set’ is based on one principle: the best interest of the client. Most respondents suggested this was the most influential obligation in their day-to-day practices. A second most influential set of obligations looks to integrity and effectiveness. The third set of obligations, less commonly invoked but still often influential, we call the independence and legality interests. Some respondents put more emphasis on the second and third sets of obligations than others. In this sense they were more professionally rounded in their thinking. Being an ethical professional, for them, was about more than simply putting the interest of the client first (although this was still very important).

This more rounded approach is the one most consistent with a lawyer’s professional principles. Interestingly, we also found associations between a more rounded view of professional principles and ethical inclination. Those who took a more rounded, professional view of their obligations were more ethically inclined.

The more inclined an in-house lawyer is to see their professional obligations as encompassing their client’s interest, and their own integrity and effectiveness, and the public interest in the administration of justice, the more likely they are to act ethically (in the broadest sense) and in accordance with their own code (that is, ethically in the professional sense).

The absence of training and support to deal with ethical pressure

Professional ethics, as distinct from compliance, is a somewhat neglected element of professional practice. We tested how often our respondents were given guidance, trained on or simply discussed professional ethics.

The numbers of respondents reporting that professional ethical issues were not dealt with even annually by way of training, guidance or discussion was surprising. We contrast this with the 10% of our respondents who were asked to advise on ethically or legally debatable actions frequently or very frequently, and the 40% asked to advise on such actions at least sometimes. Similarly, 80% agreed that the legal department was sometimes criticised for inhibiting or slowing decisions and 57% agreed that colleagues were sometimes reluctant to raise issues with the business. Close to 50% agreed that actions were sometimes taken against their advice on legally important matters.

In simple terms, given that our respondents often reported ethical pressure, the training and support to deal with it was often irregular or lacking completely. This is, we think, a pressing issue of management.

This difference between pressure and its management can be seen in a particularly interesting set of findings on the relationships between the employer and the lawyer and approaches to ethics. In particular, our most ethically inclined group also operated in the environment with the most ethical pressure. This is a reminder that tension between the employer and the lawyer can be dealt with positively. Those in-house lawyers who seemed to respond positively to ethical pressure were supported by a more ethical, independent outlook, more ethical and societally oriented teams, and a somewhat stronger ethical infrastructure.

Takeaways for businesses and leaders of in-house teams

This work is part of a broader study. We are preparing the results from town hall meetings and in-depth interviews, which we will be publishing in the coming months. The plan is to produce, in collaboration with practitioners, a discussion paper that sets out ideas about how best to structure the in-house role and manage in-house legal functions for ethical practice. For now, we make the following observations:

  • The varied understandings of the in-house role suggest that in-house teams should engage in an honest and open evaluation of their own approaches and consider where they sit on the spectrum of approaches we have outlined.
  • The evaluation should engage the employer and their in-house teams.
  • The balance between a commercial (or, outside business, a client- focused) orientation and independence and ethical orientations should be a particular focus of this review, with consideration given to how independence and ethicality is part of the role description, reporting and day-to-day management of in-house lawyers.
  • The balancing and use of professional principles in day-to-day practice, especially those that promote integrity, independence and ethicality, should be considered and supported.
  • The approach to managing for ethicality though ethical infrastructure, such as training, guidance and appraisal should be considered as a matter of urgency.

The report is authored by Richard Moorhead, Centre for Ethics and Law, UCL Laws;
Cristina Godinho, Centre for Behaviour Change, UCL; Steven Vaughan, CEPLER, Birmingham Law School; Paul Gilbert, LBC Wise Counsel; and Stephen Mayson, Centre for Ethics and Law, UCL Laws.

UCL Richard Moorhead

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