Private Interest vs. Public Accountability: Who's Your Master?

The bottom-line message of the Enron debacle is that no professional can serve two masters at the same time. Beyond any possible wrongdoing by Arthur Andersen, the real problem is inherent in the very concept of the CPA-the certified public accountant.

By its very nature a public accountant serves two masters. He or she is employed and paid by a private corporation whose object is anything but objectivity. Its goal is to present the rosiest possible picture. Yet the CPA-remember the P part-is supposed to serve the public interest by presenting a true picture of the private corporation's financial situation so that the public can make prudent investment decisions.


This direct conflict between private self-interest and public accountability violates a core rule of human behavior, that "he who pays the piper calls the tune." No one should ever count on the objectivity of a public accountant who is being paid by a private corporation-and who wants the pay to continue.

No reform will work unless there is a sharp division between the public and private roles of accountants. This may literally require the abolition of the profession of certified public accountant-and the recognition that private accounting firms cannot be counted on to serve the public interest. That public role might have to be taken over by truly public accountants, paid for out of public funds.

What does this all have to say about the legal profession? The current mantra of legal reformists is that private lawyers must work in the "public interest." The recent fad toward "professionalism" tells lawyers that they should not devote themselves exclusively to the interests of a client but should rather balance the private interests of the client with the public interests of society at large.

As one prominent advocate of this view has put it: "The client's trust presupposes that the practitioner's self-interest is overbalanced by devotion to serving both the client's interest and the public good." Another has advised: "Lawyers should take those actions that, considering the relevant circumstances of the particular case, seem likely to promote justice." The traditional notion that lawyers are "officers of the court" adds to the confusion.

Lawyers simply cannot serve the private interests of their clients, the public interests of society, and the interest of the court all at the same time. Any lawyer who tries to perform this juggling act will quickly become a walking conflict of interest. A private lawyer should have only one client-the one who pays him or the one the court has appointed him to represent. When the interests of his client conflict with those of the general public or that of the court-as they almost always do-the private lawyer should not have to think about whether he is performing the proper balancing act. All that lawyer should be concerned with is whether he is serving the lawful interests of his clients, without violating any specific prohibitions of law or published legal ethics.

Lord Brougham got it right nearly 200 years ago when he said: "An advocate, by the sacred duty which he owes his client, knows, in the discharge of that office, but one person in the world, that client and none other. To save that client by all expedient means . . . is the highest and most unquestioned of his duties; and he must not regard the alarm, the suffering, the torment, the destruction which he may bring upon any other." Now that's professionalism!

The only time a private lawyer has the right to consider the public interest is when he decides on which clients to represent (even then, the bar encourages the representation of clients who are unpopular or unable to secure adequate counsel). If you become a private lawyer, serve the interests of your clients. Don't pretend to be serving the public interest and a private interest at the same time. That's what got Arthur Andersen in trouble.