Personal service

Lawyers intimidated: US lawyers may stop giving corporate clients their best advice if, by doing so, they risk being personally charged with a crime. Prosecutors should be tough on company misdeeds, financial or otherwise. But last week’s re-indictment of an ex-GlaxoSmithKline attorney for an apparent judgment call, supported by outside advisers, looks like bullying. Even companies deserve representation without intimidation.

Former in-house counsel Lauren Stevens could face decades in prison for not giving the US Food and Drug Administration all the information it thought it should have received in a probe of Glaxo’s drug-marketing practices. Stevens says she followed the advice of an outside law firm. But federal prosecutors say she wrongfully withheld documents, then lied about it. Prosecutors flubbed their first effort to charge Stevens criminally, misstating the law to a grand jury. Last week, they persuaded another to indict her.

 

It’s a crime to cover up alleged wrongdoing like touting drugs for uses not approved by the FDA. But good-faith legal judgments, even when mistaken, fall short of criminal behaviour. If Stevens got it wrong, her consultations with counsel still suggest that she did not mean to mislead regulators — an essential element of an obstruction charge. As the public clamours for financial fraudsters to go to jail, the heat is on prosecutors. Perhaps, as a result, they increasingly seem to be targeting company lawyers.

In recent cases against Computer Associates International and Rite Aid , the companies’ general counsels were punished criminally for their responses to federal investigations. And, the outside counsel for defunct futures trader Refco is facing seven years inside for essentially advising his client on what documents to disclose to investors. The sentences in those cases may be justified. But criminalising judgments about documents seems like overkill. When prosecutors are caught withholding crucial evidence — the corruption case against the late former Alaska Senator Ted Stevens comes to mind — they don’t face criminal charges. When private lawyers make the wrong call, a reasonable response may be penalties for violating ethics rules or committing malpractice. The Supreme Court once said the government’s interest was “not that it shall win a case, but that justice shall be done.” Threatening company lawyers with jail seems more likely to scare them off the job than serve that interest.