My fellow guest blogger, David Zaring, asks, "Should 'proactive' duties on be imposed on lawyers to investigate the financial statements of their clients?"  The short answer is, "no."  The longer answer is, "no -- and will we ever quit trying to saddle every person who comes into even the slightest contact with corporations with new responsibilities and/or fiduciary duties to protect us from these nefarious beasts?  What's next -- a duty that janitors root through corporate waste bins to ferret out securities fraud?"

I won't rehash the arguments, but there's some good stuff here and especially (it is his bete noir, after all) here.

As to David's other question -- how would such a duty affect lawyers' fees? -- I assume the question was rhetorical.   Of course such a duty would be a boon to lawyers.  The thing is, despite the phrasing of the question ("duties imposed on lawyers"), it's not the lawyers who would be saddled with a costly burden; it's the corporations.

Accounting, Fiduciary Duties | Bookmark

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