Ethical pressures on in-house lawyers

In-house lawyers are regulated differently in each jurisdiction. Some are not regarded as truly independent – hence the European Commission’s refusal to recognise that communications to and from in-house lawyers should benefit from legal professional privilege. Under the English system, there is no regulatory distinction between private practice and in-house solicitors: both are expected to achieve the same standards of independent, ethical conduct and to maintain their competence through continuing education.

Historically, neither the Law Society nor the SRA has focused much on in-house lawyers. Nor, for that matter, on commercial solicitors – a constituency that overlaps considerably with in-house solicitors. But times are a-changing, not least because the Law Society and SRA have noticed that the numbers of in-house English lawyers have increased greatly in the last few years. They now number well over 40,000.

As the regulatory body for over 200,000 solicitors in England and Wales, the SRA has recently produced a report on the challenges facing in-house lawyers. (See https://www.sra.org.uk/sra/research-publications/in-house-solicitors-thematic-review/) Among the headlines:

1. Independence …some in-house solicitors may not have the support and internal controls to maintain their independence. This may be particularly risky where the commercial interests of the organisation are not in alignment with regulatory obligations. For example, 5% of respondents had been pressured into suppressing information that conflicted with their regulatory obligations.
2. Ethics A minority had experienced significant ethical and political pressures. This included 10% who said their regulatory obligations had been compromised trying to meet organisational priorities.
3. Competence One in 10 respondents felt they did not have enough time to maintain their continuing competence. We also saw that senior leaders did not always reflect on learning needs and regulatory obligations appropriately. Interestingly, most junior solicitors self-managed their training and 25% had not received training on professionalism, ethics, or judgment within the past 12 months.

Perhaps the previous lack of regulatory focus on in-house lawyers has led to some legal departments neglecting their responsibilities in the above areas. In past decades, IP Draughts recalls seeing some in-house, English legal departments that presented themselves almost as law firms within the company for which they worked. He hasn’t seen this recently. Perhaps it is thought too stand-offish, and not compatible with being a good team member.

He hopes that the increased focus on in-house lawyers will lead to them being given more support to maintain their independence, ethical conduct and continuing technical competence. In practice, this implies budget, appropriate time off, written processes to ensure compliance, and support from the company’s Board and senior management. GCs and the Law Society have a role to play in encouraging best practice and supporting junior in-house lawyers.