BOOK NOTE THE RULE OF LAW, NOT OF LAWYERS: ETHICS AND THE LEGAL PROFESSION EAT WHAT YOU KILL: THE FALL OF A WALL STREET LAWYER. By Milton C. Regan Jr.1 Ann Arbor: The University of Michigan Press. 2004. Pp. xii, 402. $29.95 (cloth). In his thoughtful new book, Professor Milton Regan presents a case study of John Gellene, the first lawyer to be prosecuted and convicted for violating Rule 2014 of the Federal Rules of Bankruptcy Procedure, which regulates an attorney’s application for appointment as counsel in a bankruptcy proceeding.2 Given the audacity of Gellene’s crime, the book might well have been titled You Made Your Bed, Now Lie in It. That it was not says much about the analytical framework through which Professor Regan examines his subject. Using a contextual ap- proach to ethics, the book attempts not only to explain why Gellene broke the law and how he may have rationalized his crimes, but to draw lessons from his story for transforming the ethics rules that gov- ern the legal profession. While Professor Regan effectively illuminates the challenging moral ambiguities of large firm practice and crafts a compelling narrative, his efforts to connect Gellene’s particular con- duct to systemic problems within the profession never quite gel with the nature of Gellene’s crimes.3 However interesting Gellene’s story, and however instructive his fall for lawyers young and old, it is simply the wrong case for testing the utility of contextual ethics as a tool for reforming the profession. Although Professor Regan’s narrative covers considerably more territory, the facts surrounding Gellene’s crimes are fairly straightfor- ward. After helping Bucyrus, a Wisconsin-based manufacturing com- ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 1 Professor of Law, Georgetown University Law Center. 2 See FED. R. BANKR. P. 2014. Among other requirements, the application must include a sworn affidavit setting forth “all of the [attorney’s] connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee.” Id. 2014(a) (emphasis added). The reference to “connections” is crucial, as Professor Regan explains, because “state ethics rules grant lawyers some discretion to determine when a connection rises to the level of a conflict that must be disclosed. By contrast, Rule 2014 provides the lawyer with no such discretion. She must disclose all connections, regardless of whether she thinks that they represent conflicts of interests” (p. 144). 3 Cf. Mark D. Yochum, When Conflicts Become Crimes: Professionals Representing Parties in Bankruptcy, 10 J. BANKR. L. & PRAC. 235, 250 (2001) (“The story of John Gellene . . . presents such an egregious tale of the violation of Bankruptcy Rule 2014 that perhaps the severity of his sentence does not provide sufficient moral caution to the rest of us.”). 2422 2005] BOOK NOTE 2423 pany, prepare to file for bankruptcy, Gellene asked the bankruptcy court to appoint him as counsel for the bankruptcy proceedings. In his application, Gellene failed to disclose that a principal at South Street Funds — a senior secured creditor of Bucyrus — was also a client of his firm, Milbank, Tweed, Hadley & McCoy (Milbank).4 After com- pleting the bankruptcy settlement, and in support of a petition for compensation for Milbank’s work, Gellene also testified that his earlier sworn declaration was complete and accurate.5 As Professor Regan states, “[t]o put it bluntly, [Gellene] . . . lied to the court” (p. 155). The United States trustee eventually discovered the lie and charged Gellene with bankruptcy fraud. In his defense, Gellene “admitted that he had used bad judgment” but “asserted that he had no fraudulent intent.”6 Concluding otherwise, a jury convicted Gellene on “two counts of knowingly and fraudulently making a false material declaration . . . , and one count of using a document while under oath, knowing that it contained a false material declaration.”7 Gellene was sentenced to fif- teen months in federal prison and fined $15,000.8 Throughout his account of Gellene’s fall, Professor Regan works hard to paint a compelling portrait of the man behind the lies. While Professor Regan suggests that Gellene’s story is best viewed “as a cau- tionary tale” (p. 351), he does not treat it as a simplistic fable about a degenerate lawyer or his reckless law firm. Even as he recounts Gel- lene’s stubborn refusal to admit the truth until the walls had caved in,9 Professor Regan asks the reader to identify, like John Bradford centu- ries ago,10 with the criminal passing before her eyes. In his hands, Gellene emerges as a highly qualified but reckless attorney with workaholic tendencies and a self-lacerating psychology.11 Indeed, as Professor Regan tells it, Gellene becomes at times almost secondary — ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 4 See United States v. Gellene, 182 F.3d 578, 582–83 (7th Cir. 1999). 5 See id. at 584. 6 Id. at 581. 7 Id. 8 Id. The Seventh Circuit affirmed. Id. at 598. 9 After concealing that a creditor had filed a lawsuit, and after the Wall Street Journal had reported that lawsuit, and after another Milbank partner had discovered his efforts to falsify documents related to the lawsuit, Gellene finally admitted what he had done (pp. 211–13). 10 Bradford was a sixteenth-century English martyr, perhaps best known for saying, upon see- ing a criminal condemned to die, “But for the grace of God there goes John Bradford.” Aubrey Townsend, Biographical Notice of John Bradford to 2 THE WRITINGS OF JOHN BRADFORD, M.A., at xi, xliii (Aubrey Townsend ed., 1853) (internal quotation marks omitted). 11 Gellene was a graduate of Georgetown University and Harvard Law School, and he clerked for Justice Morris Pashman on the New Jersey Supreme Court (p. 52). In addition, “Gellene ac- knowledged that recognition for his intellect was a crucial element of his sense of self-worth,” even as he felt undeserving of the recognition he received (p. 51). More ominously, however, Gel- lene began his career with Milbank by practicing for nine years without a license, a “discrepancy” that was discovered after he made partner and for which he was disciplined by the firm (pp. 60– 61). See also Gellene, 182 F.3d at 585. 2424 HARVARD LAW REVIEW [Vol. 118:2422 a bit player struggling to maintain his ethical compass amidst a storm of personal and professional pressures. The title of the book itself suggests the broad contextual lens through which Professor Regan views his subject. It refers to the rela- tively recent but now dominant operational paradigm at work in to- day’s large law firms: The ability to produce revenues . . . depends primarily on entrepreneurial effort. The firm itself is far less able than before to furnish a permanent base of clients that provide a steady stream of work. The lawyer therefore must seek out his or her own clients. The common way to describe this system in the large firm is that you “eat what you kill.” (p. 7)12 Gone are the days when “nobody starve[d],”13 when almost every young associate could expect his firm to take care of him (pp. 20–26). It is this sea change in the profession and its effects on Gellene’s psy- che that form the analytical core of Professor Regan’s account. In his view, if we are to “construct a story” that renders Gellene’s fall both explicable and instructive, we must appreciate the “factors [that] pro- vided motivation for Gellene’s behavior” and those that “helped him rationalize it” (p. 294). Fundamentally, Professor Regan hopes to answer a basic question: “Why did [Gellene] risk all he had . . . by failing to make a simple dis- closure?” (p. 4). His answer rests on “three features that are common to practice in modern large law firms” (p. 7). “First, a shift to merit- based compensation and away from job security means that partners as well as associates are competitors in a tournament within the firm” (p. 7). For Gellene, success in this “tournament” depended on attach- ing himself to a prominent partner, Larry Lederman, whose consider- able book of business was rivaled only by his reputation as a maverick (pp. 65–67). Thus, Professor Regan argues, Gellene may have omitted South Street Funds from the affidavit to demonstrate to Lederman that he was not “too cautious to play an important role in future major corporate matters” (p. 324). Second, “market forces and greater specialization by lawyers make the particular field in which a lawyer practices an increasingly impor- tant source of guidance” (pp. 7–8). Professor Regan argues that bank- ruptcy practice in general, and specifically as practiced by Wall Street firms, provided the norms by which Gellene justified his concealment ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 12 As one commentator explains, “[t]he profession increasingly has become subject to the de- mands and competition of the business world. As a result, the debate as to whether the practice of law is still a profession or more closely resembles a business (and whether this is appropriate) has become increasingly focused.” Marc Pilcher, Note, “You’re Killing Independent George”: When Professionalism & Business Worlds Collide, 12 GEO. J. LEGAL ETHICS 829, 829 (1999). 13 The author quotes PAUL HOFFMAN, LIONS IN THE STREET 2 (1973). Internal quotations marks have been omitted. 2005] BOOK NOTE 2425 (pp. 325–26). On this view, because “[l]awyers and judges in different jurisdictions . . . may operate on the basis of different mental models of bankruptcy conflicts laws” (p. 333), Gellene looked to the more aggres- sive practices of fellow Wall Street lawyers to supplement instructions he received from the Milwaukee bankruptcy court.14 In short, he may have justified his actions by reading shades of gray into Rule 2014 (p. 335). Third, “lawyers in large firms now work more and more with tem- porary teams of lawyers and other professionals on discrete projects for intensive periods of time” (p. 8). Professor Regan suggests that the intense bonding within groups such as Gellene’s project team can cre- ate “a distinctive moral universe that guides its members’ judgments about right and wrong in the context of the project” (p. 349). Gellene may therefore have reasoned that his lie was necessary to protect his client’s interests. With Bucyrus’s survival at stake — and faced with an opponent ready to scuttle the proposed settlement — Gellene’s ac- tions may have seemed reasonable, and even sensible (p. 348). As Pro- fessor Mary Ann Glendon has observed, “A lawyer who takes his du- ties to the court and the legal system seriously may well be at a disadvantage against a less scrupulous adversary.”15 Undoubtedly, Professor Regan should be applauded for “re- spon[ding] to the increasing call for work in legal ethics that takes ac- count of the particular contexts in which lawyers practice” (p. 4).16 But if his goal is to paint “a richer ethical portrait of elite law firm practice” (p. 10), the subject of his portrait must be worthy of such scrutiny. While there are elements of Gellene’s conduct that implicate traditional legal ethics — that is, the rule of lawyers17 — his crime was not simply an affront to his profession. Rather, he failed to respect the ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 14 Unfortunately for Gellene, the bankruptcy judge’s instructions directly foreclosed this op- tion: “New York is different from Milwaukee . . . . Professional things like conflicts [of interest] are taken very, very seriously. And for better or worse you’re stuck in Wisconsin.” Gellene, 182 F.3d at 583 n.4 (alterations in original) (quoting the bankruptcy court judge) (internal quotation marks omitted). 15 Mary Ann Glendon, Legal Ethics — Worlds in Collision, FIRST THINGS, Mar. 1994, at 21, 26. 16 The contextual approach to ethics has been advocated as a more meaningful teaching method than approaches based on a more straightforward study of ethics rules. See, e.g., David B. Wilkins, Everyday Practice is the Troubling Case: Confronting Context in Legal Ethics, in EVERYDAY PRACTICES AND TROUBLE CASES 68, 71–72 (Austin Sarat et al. eds., 1998) (noting that traditional legal ethics instruction “pays relatively scant attention to distinctions in the tasks lawyers perform . . . , the subject areas in which they practice . . . , the clients they represent . . . , [or] the setting in which they work”). 17 The “rule of lawyers” includes informal professional norms, the ABA’s Model Rules of Pro- fessional Conduct and Model Code of Professional Responsibility, and state ethics rules. For a fascinating discussion of how ethics rules come to be, see generally Andrew L. Kaufman, Who Should Make the Rules Governing Conduct of Lawyers in Federal Matters, 75 TUL. L. REV. 149 (2000). 2426 HARVARD LAW REVIEW [Vol. 118:2422 lines drawn by society itself — that is, the rule of law.18 Unlike the landscape of legal ethics, where professional norms and practical con- tingencies wrestle in the shadow of discretion,19 the rule of law invokes broad social norms and lays down strict boundaries. The danger of drawing lessons for the profession from the actions of a John Gellene lies in the propensity to erode this distinction and thereby eviscerate the law’s role as a societal constraint on lawyers’ behavior.20 That is not to say that Professor Regan’s contextual approach to legal ethics is inherently misguided. At the very least, sensitivity to context can play a vital role in the education of lawyers, and Professor Regan is clearly attuned to such considerations. His book rests in large part on the claim that “[a]ppreciating how lawyers identify, frame, and resolve ethical questions . . . requires sensitivity to both the types of organizations in which they work and the particular fields in which they practice” (p. 4). He concedes that “[p]ersonal character is of course relevant” (pp. 357–58), but his point is that “ethical law prac- tice does not depend simply on the moral probity of individual law- yers” (p. 357). As he asserts, “[w]e need to move beyond the claim that unethical behavior is attributable mainly to a decline in the personal morality of lawyers or in the integrity of law firms” (p. 6). The problem, however, is that Gellene was convicted for a gross violation of a clear law designed to preserve the integrity of the legal system itself,21 not merely for exercising poor professional judgment or misinterpreting an ethics rule. Speculating about the professional forces that might have influenced Gellene’s decisionmaking misses both the narrower point that Gellene’s decision to disclose should have been an easy one and the broader point that a lawyer’s obligation to the rule of law should not be susceptible to situational hairsplitting. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 18 In the strictest sense, the rule of law is insensitive to context, demanding obedience even when the law seems arbitrary. Cf. Antonin Scalia, The Rule of Law as a Law of Rules, 56 U. CHI. L. REV. 1175, 1179 (1989) (“There are times when even a bad rule is better than no rule at all.”). 19 Indeed, the ethics rules are well familiar with the shadows. See Kaufman, supra note 17, at 157 (noting that the legal profession’s control of the drafting process means “that a great deal of [ethics rules] can be put in near final form out of the public eye in a forum where many affected interests are not even formally represented”). 20 Professor Susan Koniak has articulated a similar concern with respect to attempts by securi- ties lawyers to weaken the the Sarbanes-Oxley Act’s “noisy withdrawal” requirement: The bar’s law has constructed a world in which lawyers believe it is their duty to contort all law to meet the client’s ends. And here is the crux of the matter. In such a world, law is no longer possible. Law, in such a world, does not affect behavior at all, it just recharacterizes it. If lawyers tear down all our law, where shall we stand? Susan P. Koniak, When the Hurlyburly’s Done: The Bar’s Struggle with the SEC, 103 COLUM. L. REV. 1236, 1280 (2003). 21 “The [Rule 2014 disclosure requirement] reflects Congress’ concern that any person who might possess or assert an interest or have a predisposition that would reduce the value of the es- tate or delay its administration ought not have a professional relationship with the estate.” United States v. Gellene, 182 F.3d 578, 588 (7th Cir. 1999). 2005] BOOK NOTE 2427 At some point, certain ethical “dilemmas” dissolve in the face of moral clarity.22 Ethically, they pose a problem no greater than the decision faced by a pickpocket staring at a fat wallet in an open purse. The temptation may be great, and circumstances may generate substantial pressure to rationalize the crime, but the purported dilemma is simply too primordial to raise the hard questions that require sophisticated ethical judgments. More concretely, lawyers faced with a clear disclosure requirement, like Gellene, are not asked to exercise the discretion that typical con- flict-of-interest decisions require under the ethics codes.23 They must simply submit to the rule of law. Where the proper decision is so clear, legal ethicists risk diluting this moral imperative by appealing too strongly to context. And in the process, they may undermine whatever value contextual ethics offers as a pedagogical tool. As one study of young lawyers has found, “[i]ronically, the extreme examples of malfea- sance that had been presented in their professional responsibility classes are occasionally used to minimize the moral ambiguities in the [lawyers’] current practice.”24 Even if contextual ethics has only the more modest goal of identify- ing aspects of the ethics rules in need of reform,25 Gellene’s story makes little sense as a starting point.26 Studying ethical dilemmas that involve little more than a lawyer disregarding his self-interest and obeying the law can manufacture shades of gray in areas where society and the legal system see only black and white. If professionalism means not that different rules apply, but that stricter rules and nobler ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 22 On this point, this Book Note diverges from the view of those who suggest that moral clar- ity is a stranger to the world of legal ethics, which ought to be understood in strictly utilitarian terms. See, e.g., Sean J. Griffith, Ethical Rules and Collective Action: An Economic Analysis of Legal Ethics, 63 U. PITT. L. REV. 347 (2002). Although it would be difficult to articulate a com- prehensive moral code acceptable to all people, or even to all lawyers, the morality at work in le- gal ethics is not comprehensive. As one commentator has suggested, legal ethics represent “the ideals, values, visions, norms, principles, rules, and virtues which a society uses to control the conduct of its lawyers.” Michael Sean Quinn, The Analects for Lawyers: Variations upon Confu- cian Wisdom, 34 TEX. TECH L. REV. 933, 933 (2003) (emphasis added). 23 Limiting the lawyer’s exercise of discretion, after all, is the point of Rule 2014. See supra note 2. In contrast, as Professor David Wilkins has noted, “both the Model Code and the Model Rules are filled with” ethical norms that “are ambiguous, incomplete, or in tension with other, plausibly applicable rules.” David B. Wilkins, Who Should Regulate Lawyers?, 105 HARV. L. REV. 799, 810 (1992). 24 Robert Granfield & Thomas Koenig, “It’s Hard To Be a Human Being and a Lawyer”: Young Attorneys and the Confrontation with Ethical Ambiguity in Legal Practice, 105 W. VA. L. REV. 495, 516 (2003). 25 In his epilogue, Professor Regan sketches a variety of reform proposals for bankruptcy prac- tice and ethics rules specifically and for law firms more generally (pp. 357–66). For example, he echoes calls to “adopt a code of ethics specifically for bankruptcy practitioners” (p. 363). 26 But cf. Yochum, supra note 3, at 236 (“Although in Mr. Gellene’s case we may properly blame the criminal, we shall see that, in part, he may have been victimized but only by the seduc- tion of the shoddy practices of the world from which he came.”). 2428 HARVARD LAW REVIEW [Vol. 118:2422 aspirations apply,27 it must begin by achieving the most basic clarity: breaking clear legal rules is inexcusable, whatever the context.28 Only then can attention be paid to those truly difficult areas where lawyers are expected to hold themselves to a higher standard than nonlawyers, where a CEO would give an unflinching green light to actions that must perforce give pause to the ethical lawyer.29 Whether or not Gellene was a born liar or a dupe, the lesson to be drawn from his story may be more straightforward than Professor Regan admits: when society draws a line in the sand, a lawyer crosses it at his peril — his profession will not, and should not, shield him. For all the complex psychological, organizational, and economic forces identified by Professor Regan, Gellene’s crime was no ethical shortcut, no mistake of judgment in the heat of battle. Gellene consciously chose to violate the law, consistently refused to correct that choice, and paid the price. In these circumstances, drawing hard lines and teach- ing harder lessons may well be the best way to draw caution to his tale.30 Perhaps Professor Regan is right not to label Gellene “an ethi- cal rogue” (p. 10), but if society cannot expect its lawyers to obey the rule of law, no amount of contextualizing will save the profession from charges of moral bankruptcy. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 27 See Jeffrey W. Stempel, Embracing Descent: The Bankruptcy of a Business Paradigm for Conceptualizing and Regulating the Legal Profession, 27 FLA. ST. U. L. REV. 25, 27 (1999) (“[S]ociety will see better conduct by lawyers . . . if attorneys continue to be regarded and regu- lated as part of a profession rather than . . . as actors in a market.”). 28 Søren Kierkegaard framed ethical decisionmaking in stark terms: “[T]he question is never one of understanding, comprehending; it is a matter of doing what one understands, and the thing which a man actually ought to do is always easy to understand.” 3 SØREN KIERKEGAARD’S JOURNALS AND PAPERS 274 (Howard V. Kong & Edna H. Kong eds. & trans., 1975). 29 See Robert K. Vischer, Heretics in the Temple of Law: The Promise and Peril of the Reli- gious Lawyering Movement, 19 J. L. & RELIGION 427, 462 (2004) (“As state-licensed gatekeepers to our society’s system of legal rights and privileges, lawyers are . . . subject to a degree of per- sonal-professional demarcation that would not apply, for example, to the services provided by butchers or novelists.”). 30 Professor Regan has elsewhere cautioned against approaches to legal ethics that focus exclu- sively on lawyers’ “individual morality, divorced from organizational changes in practice.” Milton C. Regan Jr., Taking Law Firms Seriously, 16 GEO. J. LEGAL ETHICS 155, 157 (2002). Professor Regan has even suggested that “law firm practice is but one instance of perhaps the central moral question of the 20th and 21st century: how do we assign moral responsibility to individuals in large bureaucratic organizations?” Id.
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