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L E GAL E THICS BY PHILIP SLAYTON Moral neutrality is no longer enough E The time is past for the traditional arms-length ideal of offering legal service without consideration of the impact, economic or otherwise. veryone's looking for someone to blame for the economic mess. It's satisfying to point the finger at American small-town mortgage lend- ers who gave money to people they must have known could never pay it back. And what about those investment bank- ers who packaged subprime mortgages into collateralized mortgage obliga- tions (CMOs) that were fatally flawed? And the bond-rating agencies that gave triple-A ratings to junk? And those whiz kids who invented credit default swaps (CDSs) that magnified immeasurably the risks of something going wrong? Gosh darn it (as Sarah Palin might say), these people have a lot to answer for. But wait a minute: What about the lawyers who were sitting at the table ev- ery step of the way? There were lawyers present when those subprime mortgages were handed out; when CMOs were structured; when bond-rating agencies did their work; and when CDSs were invented. Lawyers were particularly ac- tive at the upper end of the financial food chain. Clever and highly paid attorneys on Wall Street (and Bay Street) had a big hand in inventing the fancy pieces of pa- per that got the world into so much trou- ble. (Full disclosure: In the early 1980s, I was one of several lawyers representing a New York investment bank that put to- gether what I believe was the first mort- gage-backed security issued in Canada.) What were the ethical responsibili- ties of these lawyers? Should they have considered the broad economic conse- quences of their work? Should they have blown the whistle? Should they have said, "This is a bad idea, no good can come of it, and I don't want to be involved?" Of course they shouldn't have. That, at least, is the traditional response. Lawyers, it goes, are not policemen, or self-appointed regulators, or priests. It's not the job of a lawyer to judge the economic impact, or the morality, of a transaction he's paid to facilitate. We all know, for example, that despicable criminals are entitled to vigorous legal representation. It's perfectly fine to help tax avoiders, even though aggressive tax avoidance harms the public fisc, leads to unacceptable disparities of wealth, and impedes great national policies that benefit the citizenry. And, so it goes, it's entirely ethical to lend a lawyerly hand with financial schemes, even though you suspect those schemes may imperil the economy and ruin millions of lives. You can sum up the traditional view of legal professionalism this way: A lawyer is like a taxi driver. If a taxi driver picks up a passenger at the train station, and the passenger asks to go to the local whore- house, the job of the taxi driver is to take him there safely. It's not his responsibility to try and convince the passenger that a trip to the art museum would be more edifying, and turn down the fare if he is unsuccessful in his exhortations. 24 FEBRU AR Y 2009 www. C ANADIAN Law ye rmag.com ILLUSTRATION: PIERRE-PAUL PARISEAU