Legal Opinion: What's wrong with a couple of tyrants on a law firm's client list?
Law firms have to be profitable, but they are not obliged to act for anyone who comes through the door. Not giving enough thought to ethics can be catastrophic, says Matthew Rhodes
Wednesday 20 February 2008
There has been a recent flurry of foreign dictators, oligarchs and despotic governments using the English courts to have a pop at anyone with whom they have a grievance. This has led to much comment on the rights and wrongs of "forum shopping", but it also raises the issue of whether law firms should be accepting such instructions in the first place.
The law firm Penningtons clearly has no problem with this. It has recently been acting on behalf of Teodoro Obiang, president of Equatorial New Guinea, in his attempts to recover damages from Simon Mann and other alleged leaders of an attempted coup against him.
Obiang runs a brutal and corrupt regime and is reported to have eaten the body parts of his executed rivals. He's also reported to have threatened personally to rape Mann before flaying him alive. So it is per-haps unsurprising that when www.rollonfriday.com polled its readers last week, 86 per cent of the thousands of lawyers who responded roundly criticised Penningtons for acting.
Jon Heuvel, the managing partner of the firm's London office, would not comment on its motive for acting other than to say that it raised an interesting point of law and that everyone deserved representation. But solicitors don't have a cab rank rule. They are under no obligation to accept instructions and the overwhelming consensus of the profession is clearly that Penningtons shouldn't have done so.
Of course law firms are commercial concerns and have to be profitable. But most lawyers are altruistic, have a strong social conscience and take their role as officers of the court and members of a profession very seriously. Lawyers were quietly undertaking huge amounts of pro bono work long before it became fashionable for them to produce glossy reports on their corporate social responsibility. They're more likely to be sponsoring an ambulance than chasing it. And, as RollOnFriday's poll showed, most wouldn't even consider helping a dictator pursue a civil action, however much oil he was sitting on.
There's a wider point to this. Firms are very good at following procedures for things they are required to take seriously, such as conflicts and money laundering. But they are rather less good at considering whether they should be acting in the first place.
A ring round some of the largest firms in the City revealed that none of them had an ethics committee charged with reviewing potentially sensitive matters. The best that can be hoped for, apparently, is that a firm's conflicts group would refer anything that looked untoward to its head of risk.
The Obiang case is an extreme example, but firms are asked to advise on all sorts of matters which are rather less clear cut. Should a firm work on the financing of a dam which will result in the destruction of millions of acres of rainforest? What about if that dam will provide sufficiently cheap energy to lift thousands out of poverty? At the moment these sorts of considerations are often left to the personal opinion of one partner.
In the past, firms may have got away with a careless approach, but the press is now taking a keener interest. Penningtons wouldn't comment on how its traditional client base of wealthy individuals and family companies had reacted to the news of its involvement with an alleged cannibal but one can hazard a guess. Large corporate clients who have had ethics committees in place for years will increasingly expect law firms who are pitching for their business to do likewise. Young lawyers who've joined the profession with a desire to do some good are likely to shy away from firms with a couple of tyrants on their client lists.
Law firms are not obliged to act for anyone who comes through their door and the consequences of not giving enough thought to this can be catastrophic. Partners increasingly maintain that they are becoming more corporate in their management structure: setting up defined, sensible procedures for determining their client base would be a good start.
Matthew Rhodes is a founder of www.rollonfriday.com
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