In-House Counsel

Daņino?s no holds barred interview with Corporate Counsel recounts how Wolfowitz did an end run around the general counsel to avoid advice he didn?t like.  After Wolfowitz disagreed with Daņino?s initial advice he took the matter to the bank?s three-member ethics committee.  After that, Wolfowitz sought contract review from outside counsel.  Through forum shopping and selective disclosures he ultimately achieved the result he wanted: a fat compensation package for Shaha Riza, the World Bank?s Middle East specialist and his girlfriend.
 

It reminds me of what Enron?s Ken lay did after Sherron Watkins confronted him about her fear of an accounting scandal at Enron.  Lay agreed to have outside counsel at Vinson & Elkins look into the matter, and he did.  But to help engineer the desired result he instructed counsel not to challenge Arthur Anderson?s conclusions.  It was another ?I know better than you? decision that ended badly.
 

LESSON #1:  Selective disclosures compromise the independent judgment of counsel and lead to Swiss cheese legal opinions that offer little protection when the sauce hits the fan.
 

LESSON #2:  Doggedly pursuing an end result with an ?ends justify the means? attitude can blind smart people to important information and typically drives costs much higher than expected.
 

Full post as published by Legal Literacy on May 21, 2007 (boomark / email).