The Fallout from Enron

Media Frenzy and Misguided Notions of Public Relations Are No Reason to Abandon Our Commitment to Our Clients

The media attention and ensuing debate over Enron’s collapse have gener-ated several troubling responses. The author submits that there has been a hasty and unsupported judgment by the general public and prominent peo-ple in law and academia that lawyers violated ethical obligations and broke the law with their representation of Enron. Many of the proposed reforms in the wake of the Enron collapse are troubling because they would vitiate the confidentiality clients expect from lawyers. Both the replacement of state rules and regulations regarding lawyer’s ethics and the proliferation of multiple sources of rules of professional conduct to scale back client con-fidentiality are derided as bad ideas. Furthermore, suggestions by the Chairman of the Securities and Exchange Commission that lawyers should reform the manner in which they advocate for corporate clients and reorder the way a lawyer deals with such clients are unwarranted and the product of imprecise thinking.The author takes particular issue with the suggestions of Professors Kon-iak and Cramton, presented orally at this symposium, that ethical and le-gal violations of lawyers abounded in the representation of Enron. The author first argues that Professors Koniak and Cramton have falsely overstated that lawyers have been “found” legally responsible for nu-merous financial scandals over the past half-century. He then argues that the professors’ entire premise is based on the unsupported conclu-sion that where there is financial fraud, the company’s lawyers played some part. The author counters that the performance of individual law firms representing Enron has not revealed to this point any unethical or illegal behavior. Finally, the Enron investigation has uncovered no evidence of an epidemic of misconduct among lawyers, as others have suggested.

The full text of this Symposium is available to download as a PDF.