When and How Should Outside Counsel Withdraw from an FCPA Representation or Report Violations to Authorities?
Rebecca Hughes Parker
When an attorney discovers, or strongly suspects, that bribery is taking place, or will take place, at a company she represents, but the company refuses to act, what should the attorney do? The recent Wal-Mart revelation that the company allegedly thwarted the 2005 recommendation of outside counsel to conduct a thorough anti-corruption investigation is just one example of a potentially difficult situation for counsel. When should an attorney withdraw from an investigation to protect herself from being complicit in the bribery? When should she report the client to the government? The attorney client privilege provides significant protection for attorneys when they learn of a violation, but that protection is not iron clad, especially as authorities say that they will not hesitate to prosecute lawyers who are involved in a client’s corruption. Additionally, attorneys must weigh their reputations with other clients and with the government. This article provides context and practical guidance for counsel facing the thorny question of withdrawal. In particular, this article discusses: the legal and regulatory landscape, including ABA Model Rules and SEC rules that discuss withdrawal, reporting and the scope of the attorney client privilege; recent cases where attorneys withdrew from representation or were implicated in a client’s bad acts; considerations regarding how to document the representation to ease or prevent withdrawal later; factors that influence a decision to withdraw and whether to withdraw “noisily” or not; and when and why an attorney may want to report a violation to authorities.