My mother used to tell me: “Do as I say, not as I do.”
Recently, I had an experience with a UK law firm that could have used a conversation with Mom.
The law firm provided legal advice. Moments later, the firm violated its own advice. I’m sure this happens all the time, but rarely is the offense so vivid.
The substantive advice arises out of the new UK Bribery Act, which UK law firms have been trumpeting as a threat to every corporation everywhere (naturally compelling all corporations to hire outside UK counsel). In the words of one law firm’s brochure: “[I]f a Dutch company has a UK branch and engages in bribery in an Asian or African country, the Dutch company will be criminally liable in the UK under the new law and can be prosecuted in the UK.”
Does that get your attention? It sure got mine . . .
The new UK Bribery Act makes it a criminal offense to offer a bribe — anything of value — to obtain a reward. An individual who violates the Act can be imprisoned for up to ten years and fined.
That’s a little spooky, but it’s not yet Halloween.
The Act also creates a strict liability crime when a company fails to prevent bribery. The only defense to that crime is if a company can show that it had “adequate procedures designed to prevent . . . such conduct.”
That’s Halloween, but it’s not yet the “Night of the Living Dead.”
Add a jurisdictional provision the likes of which I mentioned above, and you’re well beyond the “Night of the Living Dead,” perhaps even into “Poltergeist” territory. (Some calmer heads don’t agree that the law reaches as far as the brochure I quoted above suggests, particularly if the foreign (say, French) employee is paying a bribe on behalf of a separate foreign (say, French) subsidiary for which the employee works. I’ll let the UK courts sort through those jurisdictional issues.)
I recently heard a law firm presentation describing the UK Bribery Act along the lines I just laid out. A member of the audience asked the obvious question: “If bribery of anyone — including both government and non-government employees — can result in such severe punishments, what sort of client entertainment policy should my company have? Should we allow our sales people to treat clients to $1,000 dinners once a month? $500 dinners every other month? $50 dinners twice a year? What should our policy be?”
The law firm partner puffed up his chest and explained that the only safe policy is to prohibit all client entertainment: “The limit should be zero dollars. That will keep you safe.”
(It’ll keep you safe because you’ll be out of business, but that’s another matter.)
I could rant at this point about law firms giving utterly impractical advice, but I won’t.
Instead, I’ll just tell you that, within a couple of weeks after the firm gave this presentation, a different partner at the law firm invited several in-house lawyers to attend events at the London Olympics — compliments of the law firm, of course.
Zero dollars, my poltergeist.
Maybe Mom was right: Do as I say, not as I do.
Or, as the title of this column suggested: “The shoemaker’s children are last to be shod.”
Mark Herrmann is the Chief Counsel – Litigation and Global Chief Compliance Officer at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law (affiliate link) and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide. You can reach him by email at [email protected].