 Enron
may have literally sizzled California by creating the phantom energy
crisis last summer, replete with gaming, temporary cartels and
megawatt laundering. How many of you lost valuable billing time to
blackouts; suffered anxiety and distraction for aged parents or young
children due to power shortages; or even missed a statute due to a
computer failure? Lawyers
probably in-curred vast unnecessary expenses by purchasing laptops,
intent on continuing to work during rolling blackouts. As Enron class
actions proliferate, what about California lawyers?
You can see the "copyrighted" First
Consolidated and Amended Complaint against the company at www.enronerisa.com/complaint.html.
The lawyers' section starts at page 168, paragraph 518. My favorite
phrase is "hall of mirrors in a house of cards." Gee, do you think
that violates the copyright? How do you copyright a public document?
Enron has engendered an onslaught of publicity
involving third party claims or non-client claims against lawyers and
accounting firms (the "Remaining Four"), not to mention energy
traders, investment bankers and stock analysts.
The media hype will cause everyone to experience
lingering fears of possible non-client liability, which is sure to
roil lawyers, due to the heated Enron-ish press focus. Remember those
remote letters you drafted for friends, regarding the viability of a
dot.com, or the safety record of the Cub Scouts' overnight camping
program? Ever wonder who relied upon those documents? We simply
can't worry about all those reams of paper that we wrote as kids,
but the future is something we can address.
Be reluctant with opinion letters. After all, you can never really be compensated for the
sleepless nights of future years. When drafting an opinion letter,
clearly mark each page for the reader's eyes only.
Then, if your client attempts to peddle the assurances to drum
up invest-ors, at a bare minimum, you have a possible argument against
unknown or unintended investors.
Mark each and every page in bold, to highlight the margins of
acceptable reliance.
Law firms reportedly paid out more than one
hundred million dollars for the S&L debacle of the '90s.
The Office of Thrift's allegations that but for the lawyers,
Keating could not have been successful, contained an element of truth.
One of the primary reasons that the American Bar Association sought to
amend the confidentiality requirement of Model Rule 1.6 was to permit
lawyers to disclose client wrongdoing. Enron is likely to present a
strikingly similar scenario and may implicate lawyers. Please, remind
lawyer bashers that it is the lawyers who will bring everything to the
light.
Enron's most profound impact upon the
profession will involve document retention policies, which everyone
knows means the destruction of drafts, e-mails and other potential
smoking guns. If you are involved with an entity retention policy, it
is highly advisable not to remind the company's employees of such a
policy after receipt of a subpoena. A reminder to employees on the eve
of a federal investigation, as evidenced in the Arthur Anderson
prosecution, could be characterized as suspicious and . . . well, . .
. possibly obstruction of justice. |
