A New Perspective for Law firm Administrators by

A New Perspective for Law firm Administrators by Michael Josephson Institute of Ethics

How important are ethics in the legal profession? In your firm? To your personal success?

3

4

Ethics is not just a factor to consider – it’s a ground rule 6

You can’t avoid ethical responsibilities by ignoring them 7

Liar, Liar 8

Bagger Vance

• Ethics is not about the way things are. • It’s about the way they ought to be. 10

• Ethics requires us to give up the idea that an act is proper simply because it is permissible or that an act is ethical so long as it is legal. • An ethical person often chooses to do more than the law requires and less than the law allows. • There is a big difference between what you have a right to do and what is right to do. © 2010 Josephson Institute of Ethics 11

Ethics Is Bigger Than Compliance is about doing what you are required to do by laws or rules. Ethics is about doing what you should do because it is right. 12

What is Ethics? Big E ethics • core principles about moral right and wrong; what it is to be a good and worthy person/company Little E ethics • laws and rules (compliance ethics); gifts, conflicts of interest, etc. The Professional Code of Conduct

Mindsets and Perceptions What we se depends on what we are looking for and our perspective determined by where we are standing 14

Speaking of perspective and mind set – do see the arrow?

Do you see the arrow?

Do you see the arrow? Character & Ethics Not professional responsibility legal ethics but basic good person ethics

Aoccdrnig to rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, errors the olny There are some typographical in the passage below. Your tihng task is to read this asfrist fast as you lsat can iprmoetnt is taht the and but only if you understand what you are reading. ltteer be at the rghit pclae. The rset can be a ttoal mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. 18

What do you see?

CDS 2011 © Josephson Institute of Ethics 2011 20

How much larger is the last car than the first car?

Haircut 23

Perspective - Hitter or Pitcher 24

When lawyers only look at things through their legal lens all they will see are legal issues The best legal result is not necessarily the best possible result 25

Three stonecutters were asked what they were doing. • The first man replied: “I am making bricks from this stone. ” • The second said: “I am making the foundation for a building. ” • The third answered: “I’m building a cathedral. ” So what? What difference does it make how a person looks at his work? If you change your perspective you change the way you experience the world.

What mindset am I advocating for corporate counsel? I am solving my clients legal problems and assuring that its business transactions are legal I am helping my client deal with current legal issues and anticipate potential issues by creating an effective compliance program. I am doing all the above but I want to help my client preserve its assets and protect and strengthen its reputation and credibility by avoiding accusations of wrongdoing and helping to create an ethical culture

A New Mindset ▪ Exemplary representation of clients in today’s environment requires a mindset that thinks beyond legal compliance to embrace the extra-legal moral dimensions of corporate duty ▪ One way to do this is to redefine the scope of compliance to preclude evasion and avoidance strategies likely to be considered unethical by regulators or large segments of the public. 28 © 2007 Josephson Institute

The Concert

A Personal Journey I went to law school wanting to do good. I left wanting to do well.

I went to law school thinking law was about pursuing truth and justice. I left believing that no one really knows what truth and justice are and that my job was simply to win for the client that hired me.

I thought the ground rules were in advocacy: The law is what is boldly asserted and plausibly maintained. If you want to play hard ball, Nobody hires a lawyer to be fair. I’ll play hardball. They hire a lawyer to win.

If its legal, its ethical. If its permissible and it works, its not only proper, it’s your duty as a zealous advocate. An unenforced law can be ignored, legally, practically and morally. The best way to solve a problems is to do a risk/reward cost/benefit analysis.

Rational Decision-Making Versus Rationalizations The difference between a rational decision and a rationalization is based on when the reasoning process takes place. In a rational decision one reasons first in order to reach a conclusion. In a rationalization the reasoning process is used to justify a conclusion or decision.

MISSION DRIFT ▪ In sports, coaches and athletes must determine what is “part of the game” and what is cheating and bad sportsmanship. ▪ In law, lawyers and judges must also determine which conduct is consistent with the overall purpose of the legal system and which is not. 35 © 2007 Josephson Institute

The practice of law is not a sport. What lawyers do is not a game. Unlike sports, the impact of actions and decisions can be lasting and profound on the participants and society. 36 © 2010 Josephson Institute

The practice of law has many of the attributes of a hard fought contest, but there are occasions when it has to be more than a game, when a lawyer must ask himself whether he is putting his knowledge and special professional skills to the service or disservice of justice in human affairs. 37 —Professor Henry Jones © 2007 Josephson Institute

When confronted by an approaching bear I don’t have to out run the bear. . . I just have to out run you!

My life view changed dramatically when I was assigned to teach legal ethics the same year I became a father.

If you could interview the people who will date and marry children you love,

Six Pillars of Character Trustworthiness Respect Responsibility Fairness TRRFCC Caring Citizenship 41 © 2007

But what does this have to do with the ethical duty of lawyers? Which of these is not important to you in what you want and expect from the people you interact with – staff, court personnel, associates, partners, clients, opposing counsel? Which of these is not important to the people you interact with – staff, court personnel, associates, partners, clients, opposing counsel?

10 Truths for the Boss 43 © 2007 Josephson Institute

TRUTHS ABOUT BEING THE BOSS 1. Everyone rationalizes -- including you. 2. There’s lots of things you don’t know and lots of people who hope you don’t find out. (The most dangerous problems are the ones you don’t know about). 3. Complacency and overconfidence about ethics is a major vulnerability. (Everyone says it can’t happen here until it does). 44 © 2007 Josephson Institute

TRUTHS ABOUT BEING THE BOSS 4. The law of big numbers -- in any organization of size there are bound to be some crooks and psychopaths. (You’ve got to try to screen them out or weed them out. ) 5. What you allow, you encourage. 6. The higher the stakes– large financial incentives, relentless pressure, fear of losing job -- the greater the cheating. 45 © 2007 Josephson Institute

TRUTHS ABOUT BEING THE BOSS 7. Doing nothing is doing something; the consequences of inaction are as real and potent as any action. 8. We judge ourselves by our best intentions and most noble acts, but we’re judged by our last worst act. 9. If you “fight fire with fire, ” you’re likely to end up only with the ashes of your own integrity. 46 © 2007 Josephson Institute

TRUTHS ABOUT BEING THE BOSS 10. You can’t escape moral judgment through a legal

Intensified Emphasis on Compliance Programs ▪ Driven by legal liability concerns and designed to reduce risks of criminal and civil actions based on illegal conduct ▪ Revised codes of conduct with certification ▪ Online and classroom ▪ Auditing and oversight ▪ Surveys 48 © 2007 Josephson Institute

The Theory Behind Compliance Programs ▪ Prevent misconduct resulting from ignorance ▪ Deter misconduct by explicit expectations with clear threat of consequences ▪ Reduce or eliminate legal consequences by demonstrating effort 49 © 2007 Josephson Institute

Weaknesses of Compliance Programs ▪ Insufficient time ▪ Poor instruction ▪ Focuses on information and rules rather than judgment and values ▪ Legalistic approach encourages minimalism and gamesmanship ▪ No demonstrated effectiveness in altering attitudes or improving judgment 50 © 2007 Josephson Institute

The Emerging Model ▪ Move from a rules-based compliance mentality to a values-based ethical culture ▪ A more comprehensive ethics-based initiative designed to strengthen company as well as reduce risks 51 © 2007 Josephson Institute

Focus on Creating an Ethical Culture ▪ A work environment of where the intrinsic

Most bad conduct is committed by basically good. people who rationalize 53 © 2007

The Parable of the Master Carpenter 54 © 2007 Josephson Institute

If you want to know how to live your life, think about what you’d like people to say about you after you die – and live backwards.

No one ever said on their deathbed, “I wish I spent more time at

“Our souls are not hungry for fame, comfort, wealth or power. Our souls are hungry for meaning, for the sense that we have figured out how to live so that our lives matter, so that the world will be at least a little bit different from our having passed through it. ” - Harold Kushner