Legal Ethics: Maintaining Integrity as In-House Counsel

Companies that bake integrity and ethics into their corporate culture tend to experience higher employee satisfaction, productivity, and a sense of belonging in the workforce. While maintaining ethics is a team sport, leadership plays a huge role in establishing company values and leading by example with integrity. In support of that vision, legal can help foster a culture of integrity by encouraging ethical behavior across the business.

To accomplish this, start by following your own professional code of conduct. It can sometimes be difficult to know which rules apply to in-house counsel since the rulebook on legal ethics was written with law firm attorneys in mind. But the rules apply to all practicing lawyers, your team included. 

If one of your goals is to integrate ethics into your legal department and business practice, you’ve come to the right place.

Here are some key points you need to know to maintain integrity in your organization as in-house counsel.

What are legal ethics and integrity?

Before we start, let’s get on the same page about what “ethics” and “integrity” mean.

Ethics speaks to the set of standards that help us determine right from wrong in a given situation. These are usually more widely accepted principles and morals about what constitutes good and bad behavior in a setting.

Integrity, on the other hand, tends to be a more personal observation of those standards. It’s how consistently you act in alignment with your ethics in public and in private, especially in situations that may encourage you to go against them.

For example, ethics dictate that fraud is wrong. Integrity is what compels you to prevent fraud in your company and speak up when someone is doing something wrong. Having integrity means speaking the truth, doing what’s right, and acting in accordance with your ethics.

Why are legal ethics and integrity important?

Acting ethically and with integrity is important to maintaining standards of professionalism within the legal industry. Legal ethics creates boundaries for appropriate legal behavior (outlined in the ABA’s Model Rules of Professional Conduct) and allows lawyers to self-regulate.

While there are consequences for unethical behavior among in-house lawyers (e.g. fines, disbarment), it’s especially important for you to operate with a sense of personal integrity — one that is hopefully encouraged by the wider business. Otherwise, you’ll be following the rules just for the sake of it, not because you believe in them, and that can lead to resentment.

A strong ethical compass is invaluable to in-house lawyers. It guides you in the right direction, allowing you to think about the broader implications of an issue and how to address it with integrity.

For example, many in-house lawyers and outside counsel were involved in covering up the truth of the Theranos scandal. In concealing and misrepresenting the truth, these legal professionals behaved unethically, ultimately helping the company to commit fraud. Bad Blood, the book by Journalist John Carreyrou, exposes their unethical behavior and the dangers of no integrity.

Whose job is it to think about integrity?

While integrity is everyone’s responsibility, leaders play a significant role in maintaining integrity in a business. If leaders behave with integrity and demonstrate a strong sense of right and wrong, it’s more likely that others will feel encouraged to behave similarly. Leadership, in particular, has a responsibility to model ethical behavior and set the tone for the rest of the organization.

By extension, if the company is found in violation of legal ethics or compliance rules, the duty of making it right often falls to legal. Proactive legal teams tend to stay ahead of ethical issues and help to create a culture of integrity in the company.

What strategies can in-house counsel use to create a culture of integrity?

In-house legal leaders play a key role in baking ethical practices into a business’ culture. Since they work on behalf of their client, the business — we’ll touch on that more later — legal’s duty is to ensure the business follows ethical guidelines with integrity.

Here are some strategies for leading the charge in encouraging integrity across the organization.

Share your principles of ethics and integrity with the business.

One strategy is to communicate your ethical principles with the rest of the business so everyone knows where the organization stands. To make it part of your culture, share your company’s codes of ethics and suggestions for acting with integrity. Here are some ways you could do that:

Clearly outline the codes of conduct.

A company’s policies are the bedrock of effective operations. They outline the dos and don’ts of an organization’s workforce and provide the guardrails for employee behaviors. Documenting and sharing your codes of conduct and other policies set the foundation for maintaining integrity throughout the rest of the business.

Share the north star.

Every business needs a mission, one that goes beyond making money. That mission is your north star — the light that guides you toward making decisions in alignment with your values and ethics. Circulate your north star far and wide within the business so everyone knows the foundational values that ought to drive their decisions.

Include core principles in your employee orientation.

Use employee orientation as an opportunity to familiarize new employees with your company’s mission, values, and ethical code. This way, everyone who works for the company understands this to be central to the company’s identity and works to uphold it.

Create a non-punitive environment.

Another strategy is creating a non-punitive environment. One of the biggest inhibitors to employees coming forward is the fear that they’ll be punished for whatever they report. Here are some ways legal can help to create a non-punitive culture.

Incentivize ethics.

It’s hard enough for employees to come forward when they have ethical issues to report, so pave the way by rewarding people who do. As your workforce starts to understand that coming forward is celebrated and rewarded, you positively reinforce and encourage ethical behavior.

Encourage open communication.

Be open and honest in your communication with the rest of the organization if there’s something going on. Vulnerability and accountability are important for encouraging open communication within the business, as it creates a safe environment for speaking the truth.

Follow through on reports.

If you’re going to open up the lines of communication to create a safe environment for honesty, it’s a best practice to share the outcomes and consequences of unethical behavior. This confirms for your team that integrity is important to the business and encourages a similar posture within them.

Appoint peers as ethics officers.

It’s easier to tell a friend what’s going on than to run to legal or HR. The latter feels so official and heavy, but talking to a peer is something they probably would have done anyway. Consider appointing ethics officers across different functions in the business to make reporting more accessible to people on different teams.

What are ethical obligations for in-house legal teams?

The ABA’s rules for legal ethics and professional conduct provide guidelines for legal behavior and consequences for non-compliance. Here are a few common ethical rules to pay attention to.

Organizations as clients

Rule 1.13 makes it clear that in-house counsel’s responsibility is to the business. The business is your client. Your efforts as legal counsel is to do everything in your power to protect the client, which could mean reporting to a higher authority in some situations.

It’s important to know that your in-house team’s duty is to the organization itself, not to individual employees or out of personal interest. Lawyers can also represent an organization’s directors, officers, or other stakeholders, provided there isn’t a conflict of interest.

Confidentiality of information

One of the more widely-known rules of the legal profession is attorney-client privilege. This privilege is protected by confidentiality and cannot be breached without disastrous consequences, according to Rule 1.7. 

The rule outlines the specific conditions that allow lawyers to reveal client information (to prevent injury or death, to stop a crime, to comply with court order, etc.) That said, it’s important for employees in a business to know that talking to an in-house legal teammate doesn’t and shouldn’t imply that that attorney-client privilege exists. 

Dealing with unrepresented persons

Rule 4.3 outlines appropriate conduct for a lawyer when dealing with non-clients. The rule states that if you’re engaging with a person who is neither their client or represented by another lawyer, it’s your responsibility to let the person know in no uncertain terms that you are not their lawyer. Lawyers shouldn’t give advice to people who aren’t their clients.

This means it’s wise for in-house counsel to avoid providing legal advice or sharing advice with employees of the organization as much as possible. Whether it’s “small” advice like getting out of a parking ticket, or conflict-of-interest level advice about when to sell a company’s stock, save it for your actual clients.

Responsibilities regarding nonlawyer assistance

According to Rule 5.3, legal professionals who receive assistance from non-lawyers are responsible for the outputs of the non-lawyer’s work. As a result, this work needs to meet the standards of legal professional and ethical obligations of the organizations.

This applies to any non-lawyer entity, including AI. As AI becomes more widely integrated into many business products and services, it’s important for lawyers adopting the tool to know that you are responsible for the output of the software, as it’ll be treated as if you researched or wrote it yourself. This means that as companies increasingly adopt AI tools, legal has an ethical responsibility to verify the outputs of the software before sharing them.

(Avoiding) Misconduct

Rule 8.4 drives home the point that violating these rules counts as professional misconduct. Adhering to these rules is part of maintaining the integrity of your profession. Lawyers can also engage in misconduct if they commit a criminal act, are dishonest, make it seem like they can wield inappropriate influence, or engage in prejudice or discrimination.

This makes it clear that unethical behavior violates the ABA’s rules. Whether or not you practice in-house or in a firm, these rules apply to you, and you can face tremendous consequences when you don’t comply.

By following these rules and encouraging the rest of the organization to prioritize ethical conduct, legal is paving the way for an integrity-driven company and making it part of the culture.

Takeaways

Integrity is a crucial characteristic for successful businesses and in-house legal teams. Even though the job of maintaining integrity within an organization doesn’t fall solely to legal, your team has a huge role to play in incorporating it into the culture. Along with the leadership of the company, legal is critical to defining the principles of business conduct and setting up the internal infrastructure that empowers ethical behavior in the organization.

Don’t encourage a workforce that just follows the rules because they have to. In some situations, this can breed resentment and cause people to do the exact opposite of what the goal is. Instead, make it a natural part of the company culture — as much as monthly lunch and learns, volunteer programs, and yearly retreats are.

Legal can do a lot of this work by documenting the company’s stance through policies and procedures, integrating it into other activities like employee orientation, and sharing the company’s vision so everyone follows the same north star. Equally important is legal’s ability to create a non-punitive environment that makes employees feel comfortable coming forward about an ethical issue. This makes integrity a self-fulfilling characteristic of your entire team.