Where were the lawyers when Lehman crashed?

Lawyers have a venerable tradition of putting clients first, but this should not lead to irresponsible behaviour
According to Lehman’s US bankruptcy examiner, an overindebted Lehman engaged in “balance sheet manipulation” to create the appearance that it was reducing its debt
According to Lehman’s US bankruptcy examiner, an overindebted Lehman engaged in “balance sheet manipulation” to create the appearance that it was reducing its debt
BRENDAN MCDERMID/REUTERS

In the autopsy on the financial crisis, corporate lawyers have managed to avoid forensic scrutiny. We often hear the cry “where were the auditors”, but it is rarer to hear the same question asked of lawyers.

This question needs to be asked separately in relation to different legal functions. We need to think about the role of in-house counsel.

Where were they when, according to Lord Turner, Barclays was “gaming” the regulator; what was their role in the Standard Chartered wire-stripping debacle; what of their role in the hacking saga?

We also need to ask these questions about corporate law firms and the services that they provided to financial institutions.

Lawyers have a venerable tradition of putting clients first. They also have strong economic incentives