There’s an interesting report from the International Bar Association (Click here, HT Ben Rigby) which results from an initiative of the IBA, OECD and the United Nations Office on Drugs and Crime (UNODC) on combating corruption. The central point is this:
We have empirically observed how clients are increasingly raising the standards for the retention and monitoring of law firms that represent and advise them in order to control the anti-corruption risks that external legal counsel may pose to the client’s business.
A number of international instruments point to the potential role of lawyer’s as intermediaries of corruption. Lawyers are not generally classified as high risk by their clients but are seen to pose particular risks where relationships with public authorities and the judiciary give rise to concern. There appears to be particular risk associated with the CIS, Africa, Latin America and Baltic & Eastern Europe –suggesting that client concerns may extent to Global firms with relationships or offices in those regions. Indeed, Berwin Leighton Paisner is held up as a case study of the kinds of steps a law firm can take to address their risk in the report.
Within the report is a quite large international survey suggesting that large proportions of lawyers are subject to risk:
- More than a fifth of respondents said they have or may have been approached to act as an agent or middleman in a transaction that could reasonably be suspected to involve international corruption. Nearly a third of respondents said a legal professional they know has been involved in international corruption offences.
- Nearly 30 per cent of respondents said they had lost business to corrupt law firms or individuals who have engaged in international bribery and corruption.
- Nearly 40 per cent of respondents had never heard of the major international instruments that make up the international anti-corruption regulatory framework, such as the OECD Anti-Bribery Convention and the UN Convention against Corruption.
Interestingly, nearly 40% of UK lawyers surveyed in that study (Click here) said they thought corruption was an issue in the legal profession in their own jurisdiction.
Clients, “perceived risk in external legal counsel due to counsel’s lack of adequate procedures to retain or exercise control over third parties, such as domestic and foreign correspondent law firms, corporate investigators, planning and real estate experts and other parties.” Energy/natural resources’, ‘pharmaceuticals and healthcare’ and ‘technology and communications’ are seen as particularly risky areas.
The report goes on, “[T]he fact that a significant proportion of respondents feels it is necessary to prompt their external legal counsel to improve their anti-corruption policies is further evidence of the lawyers’ failure to fully comprehend the pressing business needs of their clients.”