Comments of Bob Herzstein at Appleseed Annual Gala 2013

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The great virtue of Appleseed in my view is that it provides lawyers an opportunity at all stages of their career to pursue that goal that was somewhere in their mind when they entered law school: to help build the rules and structures that enable people to collaborate for their common good. We leave law school and we work for clients or employers, and we pursue their interests doggedly and often profitably. But, except among the most cynical, the greatest gratification comes from using legal skills to make the world a better place. Appleseed’s big heart and its deep commitment give us a great place to expand our own hearts.

Inspired by the fresh vision and audacity of Appleseed, I would like to share an idea with you.

I suggest that we lawyers are delinquent in addressing an important set of faults in our legal system.
The problem is best illustrated by two questions:

• Where were the lawyers when a handful of congressmen were able to prevent our legislative branch from funding the operations of our government, and brought the government to the brink of default on its debt obligations?

• Turning to the private sector, where were the lawyers when financial institutions made millions of highly risky mortgage loans and, with the seal of approval from supposedly independent credit rating companies, sold them as high quality loans to pension funds and banks throughout the world?

Each of these questions describes a breakdown in a part of the legal order that is critical to the effective functioning of our society.

We lawyers are trained in the importance of process for effective and orderly decision-making. We learn that in the courtroom, whatever we seek for our client, we must do so within the rules of procedure. Those rules were designed to help achieve fair results. If we take liberties with them – say by misrepresenting facts or presenting perjured testimony – we might help a client, but we do severe damage to the vital public process, and of course jeopardize our own professional standing.

My suggestion is that this responsibility for the integrity of critical processes in the legal system does not stop with the courtroom, but extends to the legislature and the private sector.

Let’s consider the frustration of congressional action by a cabal of extremists: the Constitution gives the Houses of Congress the power to pass laws. It also gives each of them the authority to “determine the Rules of its Proceedings.” Does it follow that a House can adopt a rule with the specific intent of preventing the House from legislating on a matter critical to the country unless one person, the majority leader, says okay?

That is exactly what happened. On October 1, just two hours before the government was poised to shut down, the Republicans quietly changed a House rule that would have allowed any Member to bring the Senate Bill continuing government funding up for an immediate up-or-down vote. They changed it to say that that could be done only by the majority leader, Eric Cantor.

These circumstances, accompanied by bald assertions by many of the actors that their intention was to cause the government to shut down, strike me as equivalent to actions by a courtroom lawyer seeking to frustrate the effective functioning of the court. I suggest that the lawyers who participated in such actions, as legislators or as staff members, should be sanctioned for conduct that is inconsistent with the effective functioning of the lawmaking process.

And I wonder whether the same principle should not apply to lawyers who structure and facilitate transactions that undermine the rules of commerce. In all the exposes and lawsuits arising from the subprime mortgage scandal, we have not heard about the role of lawyers. Where were the lawyers? It is hard to believe that the issuing, packaging, and sale of millions of faulty mortgage loans was carried out without legal review at any stage. Were the general counsels of the companies involved kept out of the loop? Who wrote the offering documents when multi million dollar packages were sold to trusting pension funds and banks? Did the prospectus writers not consider checking the factual foundation for their representations?

Lawyers are taught that their duty is to serve their clients’ interests. This does not allow them to seek an acquittal by lying to the court; it should not allow them to seek special interest legislative behavior by undermining the ability of the congress to act; and it should not allow them to assist their private clients to achieve great riches in a way that destroys the confidence that is vital for commercial transactions.

I would like to see an exploration of ways in which the rules of professional ethics can be expanded to disallow this kind of law-destroying conduct by lawyers. Short of that, it does not seem unreasonable to teach, and expect, each lawyer to internalize the value of the legal structures and rules that he operates within. And it is not too much to expect that, acting on these values they will refuse to assist clients who seek personal or political gain by destroying the legal framework on which we all depend.

Let me close by thanking Appleseed – its phenomenal president, its remarkable Board and center directors, and its big heart.

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