Taskforce on Business Ethics and the Legal Profession
Overview
Traditionally viewed as guardians of justice and the rule of law, law firms now face increasing scrutiny for their role in facilitating financial flows tied to kleptocracy, state capture and grand corruption. The Taskforce on Business Ethics and the Legal Profession was established to address this. Firms have a duty to place professional ethics at the centre of their decision-making when considering which clients to represent. Fulfilling this duty will reduce safe havens for the proceeds of corruption, thereby advancing the pursuit of justice. It will also enhance the international reputation of the City of London.
The Taskforce’s recommendations, outlined in the report below, are built on the historic public duties of the profession, which have lost emphasis in recent times, but which are of increased relevance today. Through profession-led change, lawyers must adapt to a rapidly changing world as well as upholding their long-standing responsibilities to society.
Trust, accountability and responsible leadership are no longer optional. They are essential for the profession’s survival and success. Individual and collective efforts by firms to implement these recommendations, if widely embraced, will not only improve the law firm’s reputation but enhance the reputation of the profession as a whole.
Context
The Russian invasion of Ukraine in early 2022 catalysed discussion in the media, parliament and within the legal profession itself on the choices made by law firms when taking on or retaining clients in circumstances other than for criminal defence. At the heart of this issue are questions about the values underpinning the legal profession, how those values relate to the rule of law and the public interest, and the reputational consequences for the City of London. These concerns are set within the wider context of international criticism, which views the City of London as being too accessible for funds of dubious provenance.
In 2023, a Taskforce on Business Ethics and the Legal Profession was established, hosted by the IBE, to embark on a review of the current rules, practices and approaches used by UK law firms to determine which clients to represent and which matters to take on – specifically in relation to kleptocracy, state capture and grand corruption. The report below presents the Taskforce’s findings and provides guidance to law firms based in England & Wales on an approach to taking on new work that ensures professional standards and accountability are at the forefront of client and matter acceptance.
The report challenges the profession to rethink its role—as not just a service provider but as a steward of public trust.
The problem
The dual identity of law firms—as commercial enterprises and as part of a public profession—creates inherent tension. While lawyers provide essential expertise that drives commerce, they also bear a responsibility to uphold justice and fairness in the interests of the public. This balance has been tested in recent years, with high-profile cases of law firms representing the beneficiaries of kleptocracy, state capture and grand corruption. While these clients may comply with legal frameworks, the ethical implications of enabling - and profiting from - unexplained wealth are impossible to ignore.
Estimates suggest that $660 billion to $1.26 trillion of illicit wealth flows into global financial systems annually, often facilitated by professionals working within legal frameworks but at the edge of ethical boundaries. Current Anti-Money Laundering (AML) legislation and regulations fail to address this effectively. This is addressed in the full Report. Observers also suggest that varying approaches to due diligence and the lack of transparency in the legal profession are partially responsible. Public and political confidence in the legal profession has eroded as lawyers have been characterised as enablers of kleptocracy, state capture and grand corruption, even when their actions comply with the letter of the law.
Most law firms wish to safeguard their reputations by being seen as acting in line with society’s expectations. The desire to preserve their reputations is what is already holding some law firms back from working with kleptocrats and the beneficiaries of the proceeds of corruption. While this is a step in the right direction, further steps must be taken to return the legal profession’s responsibility to the public interest to the heart of the client acceptance process.
Summary of recommendations
The Taskforce calls for a profession-wide commitment to responsible leadership which demonstrably reflects the profession’s duty to act in the public interest. Recommendations for the profession include:
- Adopting the ‘Legitimate Provenance of Wealth Test’, which requires credible explanations for clients’ wealth and addresses gaps in AML frameworks. This is not conceived as a legal test but as an exercise of judgment that will need to be defended with internal and external stakeholders.
- Implementing client acceptance procedures to reflect best practice – we provide a model 6-step gating process based on existing best practice for law firms to adapt or adopt, including questions such as:
- Is there a credible explanation for the source of the client’s wealth?
- Is there a risk that the proposed mandate may facilitate the activities of kleptocracy, state capture or grand corruption?
- Does that risk outweigh the public interest in access to representation?
- Could representing this client harm public confidence in the profession?
- Fostering transparency and accountability through publishing information and data by which the firm can be viewed both by reference to its stated values and to its peers.
- Contributing to the collective reputation of the profession whereby firms must consider how their actions impact the broader legal profession and public confidence.
- Progressing this through profession-led change in the first instance; however, the Taskforce believes that if no significant improvement has been demonstrated by the profession within two years of the Taskforce’s Report, then alternative approaches will need to be considered.
Additional recommendations in Section 7 of the full Report are addressed to regulators, professional bodies, civil society, parliamentarians and HM Government.
Additional info.
Terms of Reference for the Taskforce on Business Ethics and the Legal Profession
Steering Committee
The project has been overseen by a Steering Committee comprising:
- Robert Barrington, Professor of Anti-Corruption Practice, Centre for the Study of Corruption, University of Sussex
- Guy Beringer KC (Hon), former Senior Partner, Allen & Overy LLP
- Sam Eastwood, Partner, Mayer Brown LLP
- Rachael Saunders, former Deputy Director, Institute of Business Ethics
- Lucy Wolley Dod, former Partner, Norton Rose Fulbright LLP
Members
The members of the Taskforce are:
- Guy Beringer KC (Hon) – Chair
- Robert Barrington – Deputy Chair
- Michael Bennett, former Partner and GC, Linklaters LLP
- Sara Carnegie, Legal Director, International Bar Association
- Sarah de Gay, Lawyer, Non-Executive Director, Independent Committee Member and Honorary Professor
- Duncan Hames, Director of Policy and Programmes, Transparency International UK
- Susan Hawley, Executive Director, Spotlight on Corruption
- Stephen Mayson, Honorary Professor, Centre for Ethics and Law, University College London
- Julie Norris, Partner, Regulatory Team, Kingsley Napley LLP
- Patricia Robertson KC, Fountain Court Chambers
- Jeff Twentyman, Honorary Professor-in Practice, UCL Faculty of Law and former Chair of Sustainability and Responsible Business, Slaughter and May LLP
All Taskforce members are serving in a personal capacity and not as representatives of their institutions.
Consultation Process
The Taskforce was further supported by a consultation process which aided evidence gathering and provided additional insight from the expertise of relevant stakeholders, including:
- City law firms and practitioners
- Law firm General Counsels
- The Bar
- Banking and corporate General Counsels
- Academia
- Civil society
- Regulators
Role of the IBE
The Institute has played a role in convening and supporting the Taskforce on Business Ethics and the Legal Profession, which was established to respond to growing concerns about the ethical implications of client relationships with oligarchs and kleptocrats. The Institute was part of the steering committee that brought together a multi-stakeholder group of experts, including legal practitioners, civil society representatives, specialists in regulation, and academics.
Over an eighteen-month period, the Institute supported the Taskforce’s work in co-ordinating consultations, gathering evidence, ensuring the inclusion of diverse perspectives. Acting as a convener, the Institute supported the process for open dialogue on challenging questions surrounding ethical boundaries, professional standards, and the role of the legal profession in addressing kleptocracy and grand corruption.
Through this process, the Taskforce has developed its recommendations, which are included in the report. The report’s recommendations of promoting an ethical culture backed up by good governance and internal procedures are in line with IBE’s approach to business ethics, and IBE is committed to maintaining a dialogue with the legal profession on these important issues.
Support
The work is funded by the Joffe Trust and a contribution from Transparency International.