“Scout’s honor” may foster ethics
For lawyers better than regulation

Does regulating lawyer conduct lead to more unethical behavior instead of less?  Panelists at the 33rd National Conference on Professional Responsibility suggested it may, when they looked at ethical behavior in organizational settings.

Assumptions that motives like greed, ambition or deliberate dishonesty lead people to chose wrong over right mask the true causes of unethical behavior, and “let us off the hook,” said Milton C. Regan Jr., law professor at Georgetown University Law Center.  People attribute those characteristics to “bad apples” and know they are not like that themselves, he said.  “But most unethical behavior takes place without awareness that it has ethical implications,” and inducing ethical behavior requires a clear understanding of how real people behave. 

Both Regan and Ann E. Tenbrunsel, a professor in the Mendoza College of Business at the University of Notre Dame, cited “social incentives” to deceit as very powerful, and said very weak controls contribute to ethical fading. 

Regan cited an experiment with auditors who were told to “get it right” and advised they would be paid for their services based on “how right” their audits were.  Those who thought they were reporting to sellers of a company valued it 30 percent higher than those who valued the same company for a buyer.  Auditors acting for each side were able to rationalize their valuations by citing positive or negative factors as justification. 

Tenbrunsel advanced the premise that “scout’s honor” is more effective than oversight checks and warnings.  The first step in moral decision making is moral awareness, she said, and expectations of moral or ethical outcomes are founded on an assumption everyone is morally aware.

“If we don’t get to square one – awareness that this is an ethical decision – we won’t benefit from training in moral decision making,” she said.  When people don’t appreciate that they are making an ethical decision, they approach their choices “in a different way.”

Regulatory structures divert people from recognizing that they are making moral judgments and attempt to force ethical decisions through the threat of punishment, compliance programs, performance appraisals, surveillance, rewards and sanctions.  The problem is that “instead of deciding to do the right thing, people engage in a calculation,” she said.  If the costs of being caught in an infraction are not high, even with a high likelihood of detection they may take a risk and behave unethically.

Experiments in environmental pollution demonstrate that weak sanctions with a low risk of detection result in more frequent violations than no sanctions and no expectation of enforcement, she said.  Big fines and certain sanctions also produce cooperation, but the basis of behavior then becomes a business decision, not a moral one, and calculation controls.    Calculating people will find ways around regulation, so a “no sanctions” or “scout’s honor” approach works best, she said.

John M. Darley, a psychology professor at Princeton University, said that organizational practices can counter individual decision-making habits.  Strengthening the aspirational level of an organization, creating a “culture on the shop floor,” is likely to govern the behaviors of individuals.  He also urged analyzing incentives to make sure they actually reinforce ethical conduct. 

“It’s difficult to believe people will be held back by ethical considerations if others are bending the rules” and getting ahead, Darley said.  Organizations that reward shrewdness demonstrate that success is measured by “making a decision that screws someone else.”  And, he suggested, practice needs to parallel protestation. 

“There is a natural tendency to conform, to do things without evaluating them.  If you create a situation with aspirational rules, but those who bend or break the rules get rewards and respect, to not bend or break the rules makes someone feel like a fool.  The incentive is to bend or break.”

The panel was among three days of programs at the June conference sponsored by the ABA Center for Professional Responsibility.

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