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Critics can assail the morality of in-house lawyers on several grounds. Here are some that occur to me but are not at all necessarily agreed to by me.

Capitalism has taken its share of blows for being inherently immoral. Corporate counsel help their companies make profits and handsomely reward the executives who manage the enterprise. Companies compete against each other, which means that many of them close shop, lay off workers, and destroy the savings of lifetimes.

The goods and services associated with all manner of companies outrages critics, who lambaste the production of landmines, soap operas, tight jeans, colas, botox, or whatever else they hold to be morally wrong. To environmentalists, a good portion of our national output wastes resources and violates nature. To animal rights advocates, cruelty is rampant. To pacifists, the military-industrial complex is soaked in blood. And so on.

Many posts on this blog have mentioned actions by a law department’s lawyers that risk loss of the attorney-client privilege (See my posts of April 15, 2007: lawyers who are officers and sign contracts; Jan. 21, 2008: use of IT support; Dec. 2, 2007 and Oct. 21, 2005: compliance activities of the law department; Nov. 14, 2005: legal bill-audits; Sept. 14, 2005: data sent to accounts payable; Sept. 21, 2005: risks as a result of knowledge management efforts; Oct. 31, 2005: concerns for corporate attorneys; May 30, 2005: in-house counsel not reporting to the general counsel; and Feb. 7, 2006: erosion of distinction between lawyer and business person.).

Much also has been said about the absence of the privilege in several European countries (See my posts of Oct. 24, 2007: in-house lawyers not members of national bars; Nov. 18, 2007: discusses countries of the EU; Nov. 17, 2006 and three references cited; July 25, 2005 about European views; Nov. 18, 2006: diminished respect when no privilege attaches; April 9, 2006: a multi-country survey; and Oct. 24, 2007 with some reasons why countries deny the privilege.).

I have also cited an excellent paper on the topic (See my post of Oct. 24, 2005.).

The fact that groups consistently outperform individuals is well documented. This outcome rests on the statistical principle of the Law of Large Numbers. According to an enlightening article in Cal. Mgt. Rev., Vol. 50, Fall 2007 at 153, “This principle further states that a large group of laymen can even beat a small number of experts.” The article explains this counter-intuitive result as follows:

“Let the margins of error be x and y for an expert and a layman respectively. Naturally x<y. If n laymen work together, and they have independent sources of knowledge, then The Law of Large Numbers states that the margin of error of the group is yl√n = 4xl√16 = x. Hence, a group of 64 layman can beat the expert by a factor of two.” QED

Somehow, a three-lawyer law department is not at risk of being supplanted by 192 non-lawyers. If they tried, we would invoke the Law of Large Legal Spend Numbers.

At rare intervals, hopefully, an in-house lawyer must be professionally courageous. Courage is necessary when a lawyer takes a position that is unpopular to a powerful client: “Your deal violates the antitrust laws.” Courage is important when a lawyer speaks up with a message that others do not want to hear: “We have been sued and it’s a harassment claim against you” (See my post of Jan. 19, 2008 on managers who bully.). Courage needs to come to the fore when pressures of many kinds to step over the legal line lean heavily on a lawyer: “Just backdate one option?”

Sometimes integrity and courage are intertwined. To stand behind your convictions is to show integrity, but also courage. To admit a mistake takes courage (See my post of Dec. 17, 2006 on Type I and II errors; and May 1, 2006 on no individual errors outside of processes.). To try something new, especially in the face of doubters, tests a lawyer’s mettle (See my post of Jan. 3, 20008 on productivity and innovation.).

Courage can’t be tested well in interviews (See my post of Jan. 1, 2006 on past behavioral interviewing.) but it is called for at times in the hurly-burly of serving as an in-house counsel

On Dec. 20, 2007, Hercules Offshore, a marine drilling company, issued a press release which let the delighted and fascinated world of business know that it had “adopted BoardVantage to manage its board communications.”

According to James Noe, Hercules Offshore’s General Counsel, “With BoardVantage, we are able to produce highly navigable, electronic board books in a fraction of the time it previously took to create paper-based board books. We are also able to maintain a historical repository of documents, which we can access whenever needed.” More marketing-language praise follows. Joe Ruck, president and CEO, BoardVantage, chimes in with his own, personal excitement and pleasure.

I wouldn’t have thought that licensing law department software would justify a corporate news release, but there you have it. Chalk up one more way a law department can publicize its vendors (See my post of Dec. 10, 2007 about DuPont and an ad.).

At The Lawyer’s Seventh Annual Summit For In-House Lawyers a month ago, the European general counsel of Tyco International made a provocative remark. As reported, he “urged in-house legal teams to hold the hands of management on critical legal issues and not bother with mundane day-to-day legal work, which can be handled by secondees and paralegals.”

This paraphrase by a journalist, which admittedly could sorely misrepresent the actual statement, sets my teeth on edge for three reasons. The first is that “hand-holding” comes across as patronizing toward child-like, fearful executives (See my post of Dec. 10, 2007 about patronizing attitudes.).

Second, from little legal-issue acorns do mighty oaks of legal issues grow, so if lawyers in-house don’t attend to the steady flow of business issues that have legal implications, they and their company will be repeatedly bushwhacked.

An ad by the law firm Dickstein Shapiro states that its client, DuPont, “created a system to review every class action settlement notice it receives to identify opportunities that could generate genuine business value.” I believe this means that the law department decides whether to seek payment of DuPont’s share of a settlement (See my post of Feb. 8, 2006 with its oblique reference to this system.). Bear in mind that specialized service providers will take on this task (See my post of July 14, 2006 about class-action recovery firms.).

The ad, in Corp. Counsel, Vol. 14, Dec. 2007 at 23, brags: “Through this system and with help from Dickstein Shapiro, DuPont is transforming its legal department from a cost center into a profit center.”

Indeed.

From information compiled by the Council of Bars and Law Societies of Europe and shown in a map in InsideCounsel, Nov. 2007 at 38, eight EU countries grant the privilege (Ireland, UK, Denmark, Netherlands, Germany, Portugal, Spain and Romania). The other 16 member states do not privilege in-house counsel communications. As I have noted before, the absence of the privilege significantly demotes the effectiveness and power of law departments (See my posts of Nov. 17, 2006 and three references cited, one of which says that 13 EU countries recognize the privilege and 12 do not; and Oct. 24, 2007 with some reasons why countries deny the privilege.).

The article makes a further point: “saying that only external attorneys have protections makes it more expensive to comply [with the law].” Unfortunately, a recent ruling by the European Court of First Instance in Akzo Nobel (Sept. 17, 2007) dashed hopes that the traditionalist stance would be reversed. Further discussion of the Akzo Nobel decision is in Met. Corp. Counsel, Vol. 15, Nov. 2007 at 18.

Ron Friedman, host of Prism Legal, minces no words in his November 5 post. He considers whether law firms should operate in-house significant e-discovery capabilities and concludes that they should not. “Personally, I would avoid the risk of mistakes and challenge of keeping up with ever-changing technology.” That reasoning applies to law departments that undertake e-discovery operations on their own. Additionally, it is hard to find and keep competent staff.

Ron then digs into a deeper consideration: “[S]hould law firms be in businesses other than law practice?” He thinks not. The same question could be asked of law departments who handle document collection, review and production.

The movie, “Michael Clayton,” intertwines a morality story around the absolute immorality of a general counsel. Far beyond merely defending a multi-year “$3 billion class action,” the general counsel (played tensely, minutely and wonderfully by Tilda Swinton), takes the law into her own hands, horrifically.

No movies portray far-sighted, benevolent corporations aided by their equally admirable in-house lawyers. The sad fact is, all I can recall are “A Civil Action” and “Thank You For Smoking” and Tom Grisham novels turned into movies where high-powered corporate lawyers or litigators – all of them in law firms – resolutely plot, protect, and perpetrate wrong. Nowhere have I seen a general counsel portrayed.

It’s depressing, for a long-time consultant to law departments, to sit through a very well-done movie that completely excoriates the scruples of in-house lawyers.