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What is corporate law?
Corporate law is the overarching term for the rules governing the rights and conduct of businesses. In the UK, this is encompassed by the Companies Act 2006 which covers company formation, mergers and acquisitions, employment and insolvency. Companies will require the services of specialised corporate lawyers throughout their lifespan to ensure compliance with the various regulations. Failure to adhere to regulations could result in financial penalties that can be crippling or a court order to close doors.
Ethics and corporate law
As with all branches of the law, ethics plays a complex role in corporate legal practice. Lawyers are honour bound to act in accordance with government guidelines while championing client’s interests to the best of their ability.
Explore the main ethical dilemmas faced by corporate lawyers and examples of the challenges they could face when representing different parties within the business.
Morality
Everyone has a moral code, but corporate lawyers must put this aside when representing clients. Their job is to uphold the law rather than considering what is ‘right’ and ‘wrong’. A fair result in the eyes of the judge and jury is not always seen as the most moral course of action.
Morality often comes into play in employment law issues. Employees claiming discrimination could be facing unfair treatment, but they would have no case unless this breaches legal rights. Corporate lawyers have to be impartial when representing clients and put aside their feelings.
Confidentiality
As with all jobs where there is a duty of care, client confidentiality must be upheld in all but the most extreme situations. This becomes complicated for lawyers if companies are found to have illegal activity because they also have a duty to the rule of law. It also confuses processes where two parties communicate through their lawyers such as divorce.
In corporate law, confidentiality is most difficult to navigate during mergers and acquisitions. Enough information must be disclosed to satisfy the legal rights of both businesses while protecting the private interests of the individual companies. The public also has a right to some company information in an easily accessible format. Corporate lawyers also have to manage confidentially breaches within businesses such as whistleblowing where an employer reveals private information relating to the company they work for.
Loyalty
The fundamental ethical principle in the legal profession is loyalty: to the law and to clients. This can be hard to negotiate as it is and is further complicated when lawyers must represent multiple parties in one case.
Trying to put forward the best interests of both parties puts lawyers in danger of a conflict of interest which is a true test of impartiality. In these cases, corporate lawyers must be transparent and withdraw from representation if unable to effectively manage a client’s case.
