In Shakespeare's day lawyers were considered to be the protectors of truth -gatekeepers if you will, charged with the burden of ensuring that ethical standards and justice were maintained in society. This is why when Dick the butcher declares in Henry VI, "The first thing we do, let's kill all the lawyers!", he is actually bestowing the highest compliment on the legal profession. He is essentially saying that lawyers are the last plank of resistance standing between him and the sinister plans of rebel Jack Cade to become King.
Centre stage
Remarkably, as the global financial crisis worsens and, as the details of the sometimes unethical behaviour of money lenders, investment banks and credit rating agencies becomes clearer, the cries of "where were all the lawyers?" have been few. The deafening silence raises the question: Should lawyers take some of the responsibility for the credit crisis and the rapid unravelling of the worldwide financial system? Ironically enough, just four months before the credit crunch began, United States Securities and Exchange Commission Chairman Christopher Cox explicitly stated that in-house counsel and the SEC are "partners" who have a shared "mission to protect investors" and provided this advice to corporate counsel as to how they should go about their business: "In every transaction you handle, every governance problem you tackle, and every shareholder communication you write, keep in mind that America's investors are depending on you," he said.
Lawyers are not lawmakers
Law Institute of Victoria CEO Michael Brett Young disagrees. He points out that lawyers do not make the law, they only apply it. This renders them powerless to perform the function of gatekeeper. "The primary goal when acting for a client is to obtain the best result for that client provided it is within the law. Lawyers are not lawmakers. Government is responsible for making laws, which essentially makes them the gatekeepers," he says. He goes to state further that although the law society makes submissions to government on what it thinks the law should be, it is the elected representatives who are responsible for enacting laws that are in society's best interest. Does this mean the US government is the main institution which should be held responsible for the global financial crisis?
The answer might lie somewhere in the middle. The fact that Americans with poor credit histories were encouraged to take out mortgages they obviously could not afford to repay is a shameful example of predatory lending which has been universally condemned. Nevertheless, as shameful as this practice may be, the fallout from this alone could not have gone beyond US borders. Once the mortgages were sold on to investment banks, bundled into tranches and rated AAA prior to selling them on to unsuspecting investors around the world, a global financial crisis was triggered. This practice accordingly attracts shared culpability from which lawyers can not be excluded. Indeed, it was the Clinton administration that ushered out the Glass-Steagall Act, which for decades has separated commercial and investment banking, and signed the Commodity Futures Moderation Act - which exempted all derivatives, including the now notorious credit-default swaps, from federal regulation. Nevertheless, the lack of obligation to disclose the contents of derivative investment products, doesn't change the fact that banks, who are notorious for retaining the largest of legal teams of any commercial institutions were fully aware of what they were selling, as were the rating agencies who were clearly compromised. But where was the last plank of resistance? Should the lawyers involved have been morally or ethically obligated to blow the whistle? That would have been the case in Shakespeare's time. ALB