Legal Ethics

A Parable Dripping With Sarcasm

Early in my career, one of my clients was the owner of a chain of retail bakeries. One day I attended at one of the stores with the President of the corporation, whose name was Stewart. When we were ready to leave the store, Stewart remembered that he was out of bread, selected a loaf, and paid the employee behind the counter for it.

When we left the store, I asked Stewart why, as the President of the corporation, he did not feel entitled to take a loaf of bread without paying for it.  Stewart explained that if had simply taken the loaf of bread, he would have sent a message to the employee at the counter that it was acceptable to steal from the company.

Stewart was trustworthy and he was not going to sell out for the price of a loaf of bread.

Of course, we all know that Stewart is an outlier, and that cheating is rampant in the business world. The victim of much of that cheating is the Canada Revenue Agency.

Taxes are frequently evaded, but sometimes there are unanticipated consequences, such as lawsuits by shareholders upset that another owner stole more than they did, or share sale transactions complicated or even derailed by due diligence which uncovers dishonesty that the purchaser would prefer not to become liable for.

Of course, law firms are above all of that.  After all, we lawyers took an oath to uphold the law.

That is why there has never been a law firm where Partners instruct Associates or Paralegals to do legal work for the Partner or their family or corporation without opening a file, recording their time, or issuing a bill.

Law firm partners are too intelligent to risk Canada Revenue Agency being unimpressed or other Partners being resentful.  And of course, lawyers are too smart to antagonize Associates who are compensated based on their ‘billed and collected’ numbers by telling them to work on those files. And certainly law firms would never risk their Associates and staff learning that the firm’s ethics are situational.

Stewart would be so impressed.

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