Enron pressurises lawyers

IN-HOUSE COUNSEL: US scandal will force changes in working practices and attitudes

Many in-house lawyers have written memos like Andersen lawyer Nancy Temple's - used as prime evidence in the prosecution of the accounting firm - and the Enron scandal is forcing them to redefine their roles in companies, a conference of top in-house counsel heard this week.

Ms Temple sent an e-mail which some have interpreted as an order to destroy documents.

An Andersen executive has testified that the memo was simply a reminder of the company's policy on data retention.

White-collar specialist Tom Hagemann - a partner with Houston firm Gardere Wynne Sewell and a former Los Angeles assistant district attorney - asked the Global Corporate Counsel Association conference in Versailles: 'How many of us have not written a memo like that? I suggest very few.'

He said that although the facts of Enron were extraordinary, since the scandal lawyers in the US have lost the privileged position that they held with the federal authorities.

He said: 'Lawyers are now just businessmen acting for clients.

More and more, zealous representation is being viewed as obstruction.'

Mr Hagemann warned in-house lawyers to prepare their companies for investigation, and to ask 'why' as much as 'how' of fellow executives.

Eric Blumrosen, another partner with Gardere Wynne, told the conference that regulatory changes introduced following the scandal were putting increased pressure on in-house lawyers, and warned that probes by the Securities and Exchange Commission in the US had doubled in the first four months of this year as against last year.

He exhorted in-house lawyers to carry out 'corporate integrity audits' covering audit committees, codes of conduct, document retention policies, disclosure policies and corporate governance.

Joseph Speelman, associate general counsel of Lyondell Chemicals, said the difficulties would spread to European in-house lawyers, because 'what happens in the States happens everywhere'.

He said: 'We can't do the job we've done in the past.

We need a quantum leap in what we do and the way we do it.'

He encouraged in-house lawyers to emulate Abraham Lincoln - whose 'durable and sustainable achievements went unrecognised during his lifetime' - but not Bart Simpson, the cartoon character, who says: 'I didn't do it.

You didn't see me do it.

You can't prove a thing.'

See Editorial, page 16

Jeremy Fleming