“Why do we so rarely blame the supposedly holier-than-thou lawyers?” asks the New York Times about bankers and advisers’ conflicts
Andrew Ross Sorkin (of Too Big to Fail fame) on the failure by US attorneys to draw attention to advisers’ conflicts in American M&A deals:
“As I listened to dozens of the biggest-name legal consiglieri last week discuss a number of ripped-from-the-headline case studies about outrageous behavior by chief executives, directors and Wall Street investment banks caught up in self-dealing, blatant conflict of interests and other chicanery, a question occurred to me: Why do we so rarely blame the supposedly holier-than-thou lawyers?
Chief executives and bankers may make easy punching bags these days, but for every bad decision they make, there is often a lawyer who approves it — and most likely charges over $1,000 an hour for that brilliant advice.
Indeed, it increasingly seems that the lawyers aid and abet the bad behavior of the nation’s corporations, providing them with the cover of legal advice — sometimes knowingly, sometimes not.
“I never thought to ask whether the lead banker owned shares in the other company,” Victor I. Lewkow, a longtime lawyer and partner at Cleary Gottlieb Steen & Hamilton, acknowledged to a packed room matter-of-factly last Thursday, demonstrating the utter lack of checkpoints put in place during a typical merger negotiation by an often seven-figure legal team.”
It’s a subject that is getting a lot of attention in the US following the furore over Goldman Sachs’ role in the takeover of El Paso.
See also: Why I Am Leaving Goldman Sachs – Goldman Sachs executive director
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