How Much Legal Research Should Hunsaker Have Done?

As in-house counsel, I would routinely encounter “problems” that, if construed with the most negative inferences and splashed on the New York Times, would be embarrassing to the company (and me) at best and life-threatening to the company (and possibly personally career-limiting) at worst. This was not a rare and occasional moment, nor were they accompanied by blazing neon warning signs. Instead, I encountered them almost every day, and they were interspersed among a long list of mundane to-do items.

In-house counsel typically deal with this constant inflow of problems in one of two ways. One approach is to respond to every problem as if our actions will be evaluated on the front page of the NYT. In-house counsel who adopt this approach tend not to be very successful in their jobs; the burnout factor is high, and they don’t win a ton of friends within the company.

Instead, most in-house counsel triage issues—they calculate the probability and quantum of risk and invest time and resources accordingly. This is a logical response because the chance that any particular problem will explode is mathematically low, so it typically does not make sense to provide industrial-grade solutions for every problem. Plus, there are simply too many problems to treat each one as mission-critical.

With this perspective, let’s take a look at how Kevin Hunsaker dealt with the legal evaluation of pretexting. Once he had identified that pretexting was being used, he did an hour of online research. He also asked for—and got—strong assurances from the investigations vendor. This response is entirely consistent with a triage. He needed to figure out how big a problem pretexting was. Based on the two independent sources (his research and the vendor’s assurances), he concluded that pretexting was an acceptable risk.

We could second-guess this decision. The vendor’s assurances were worthless because of the vendor’s self-interest/conflict. As for his self-research, it’s hard to get a good broad overview of an issue in 60 minutes of online searching. Further, I have to imagine that even cursory research revealed that pretexting was controversial and potentially legally impermissible. If he was looking for the truth, then I would think his cursory research more than enough yellow/red flags. If he was looking to validate a pre-formed hypothesis (or to avoid rocking the boat), he might have found enough material in his research that pretexting wasn’t clearly illegal to support the hypothesis.

However, I think it’s unfair to second-guess his research approach. He did exactly what most in-house counsel would have done in this situation—he discounted the long odds that this issue would be front page news, and he did just enough research to determine that there was some support for concluding that pretexting was legal (the vendor’s representations, plus the mixed data from his own research). Excluding in-house counsel who have pre-existing knowledge about pretexting, I bet 90%+ of in-house counsel dealing with this issue would make about the same research choices as he did.

When Baskins (and others) pressed Hunsaker on his legal conclusions, Hunsaker double-checked his work by (1) speaking with a lawyer that has represented his investigations vendor, and (2) arranging for a conversation between that lawyer and Hunsaker’s business client (Gertilucci). This second round of research is more susceptible to second-guessing. Why isn’t Hunsaker turning to in-house HP privacy experts (of which there are several)? Why isn’t Hunsaker turning to HP’s normal outside counsel? Why isn’t Hunsaker doing more of his own research?

Instead, he turns to a lawyer who, though knowledgeable about pretexting law, is not a neutral source. This situation is filled with conflicts—if the investigations vendor paid the legal fees for this call, then Rule 1.8(f) applies. But more importantly, can the lawyer really tell client A that pretexting is legal while telling new client B (and customer of client A) that pretexting isn’t legal? This seems to be a conflict under Rule 1.7 and sets up a “fouling your nest” situation. As a result, this lawyer wasn’t a credible source, and Hunsaker’s apparent failure to recognize that seems like a significant error. In addition, I would hope that many lawyers would be reluctant to render advice to a client’s customer in an analogous case; it’s just too risky and conflicts-filled.

While I think Hunsaker didn’t do enough follow-up research, I also think Baskins (as Hunsaker’s boss) didn’t adequately supervise him. She asked Hunsaker at least twice if the investigation methods were legal. However, it’s not enough for her merely to ask her lieutenant if everything is OK. She needed to probe a little deeper, ask what Hunsaker did, and evaluate its credibility.

Through the right questions, she easily should have been able to determine that Hunsaker had reservations about pretexting, and that he had satisfied his concerns by (1) doing 1 hour of online research, (2) asking the vendor for assurances, and (3) talking to the vendor’s lawyer. I think many supervising lawyers would have discounted the credibility of all three sources; a natural response would have been to ask for a second opinion from an in-house expert or more neutral lawyer. It isn’t always easy as a supervisor to express doubts about a subordinate’s work, but here there should have been enough yellow flags for her to request a more thorough answer—especially if she now wants to finger-point at Hunsaker.

While it appears that neither Hunsaker or Baskins exercised the kind of care we might expect, at the same time, I’m a little sympathetic to their plight. As an in-house counsel, having our judgments questioned on the front page of the NYT is our ultimate nightmare. I’m comfortable with most of the choices I made as in-house counsel, but I’m also glad that none of them have been dissected by the press.

UPDATE: Rob Hyndman weighs in: “I doubt that Baskins’ mistake was counselling an investigation that she knew to be improper; I suspect it was over reliance on a subordinate when her own instincts were telling her subordinate might well be wrong.”

UPDATE 2: The WSJ Law Blog notes an article in Financial Times which says “Corporate lawyers live in a perpetual grey area…There are large gaps between what is required or forbidden by law and what may be done ‘legally’, and corporate lawyers are asked to bridge that divide every day.”