By Charles M. Yablon. Full Text.
This Article examines the legal and ethical problems of corporate lawyers who advise businesses that operate just beyond the edge of legality. These include manufacturers and sellers of cannabis products (a felony under federal law, even if ostensibly permitted by state statutes) as well as a substantial number of startup companies, like Uber and Airbnb, whose “disruptive” business models involve deliberately violating local laws and ordinances, many of which carry criminal penalties. Under the current Model Rules of Professional Conduct, a lawyer “shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.”This poses serious problems for lawyers who do not wish to violate the ethics rules and may also worry about the potential consequences of such violations, such as loss of malpractice insurance coverage and attorney-client confidentiality. More broadly, it raises the complex question of what kinds of advice and assistance ethically conscientious corporate lawyers should give to startups and other businesses whose activities veer into the not-quite-legal. Is the absolute prohibition of the Model Rules on advising and assisting criminal conduct the correct standard, or should lawyers be permitted, under some circumstances, to provide legal services to businesses who deliberately violate existing laws in an effort to change those laws, develop new industries and provide popular new goods and services? The Article first provides a short history of corporate lawyering, explaining how the lawyers’ role has increasingly shifted toward that of an “accomplice,” expected to advise on questions of enforcement and detection as well as legality. It follows with three case studies: cannabis businesses, Uber, and Airbnb, which each present different ethical and legal issues. It concludes with a general discussion of the philosophical and legal issues raised by these new forms of corporate law-breaking and a proposal of new ethical guidelines for lawyers confronting such issues.