INTRODUCTION                    

“The lawyer’s truth is not Truth, but consistency or a consistent expediency“[1]

This observation perfectly encapsulates the duality inherent in a lawyer’s professional roles.[2] Lawyers serve as advisors, offering clients strategic counsel rooted in legal frameworks, and as advocates, championing their client’s positions with fervour in adversarial contexts[3]. These dual roles create a unique tension, requiring lawyers to balance client advisory and advocacy with broader ethical responsibilities, unlike the traditional principal – agent dynamic.[4]

In this paper, we will understand the advisory and advocacy roles of a lawyer, delve into what the traditional agency theory is and how it differs from the dual role that lawyers perform. This paper will also touch upon different legal systems in the world and how the role of lawyers defers in each and I will also be proposing a new model, which if introduced and practically applied will bring about a shift in the existing principal – agent dynamic that exists between lawyers and their clients.

1.1 Overview of the Principal – Agency Theory

The principal – agent theory is a foundational concept in economics and organizational studies, examining relationships where one party (the principal) delegates decision – making authority to another (the agent).[5] Central to the theory are three critical components: alignment of interests, agency costs, and information asymmetry.

1. Alignment of interests

In an ideal principal – agent relationship, the agent’s actions align with the principal’s objectives. In an ideal principal – agent relationship, the agent acts exclusively in the best interest of the principal.[6] However, differing incentives often create a divergence of interests, necessitating mechanisms to ensure alignment. These may include performance – based compensation, monitoring systems, or contractual stipulations aimed at promoting goal congruence. For example, an employer (principal) may incentivise the employee (agent) through bonuses for tasks well performed.[7]

1. Agency costs

Agency costs arise from efforts to bridge the gap between the principal and agent’s interests. These costs encompass monitoring expenditures such as auditing costs, bonding costs such as performance guarantees and any residual losses stemming from inevitable misalignments. These costs reflect the inherent inefficiency in the delegation of authority, highlighting the importance of minimising such friction in principal – agent dynamics.[8]

1. Information Asymmetry

One of the cornerstones of principal – agent theory is the asymmetry of information, where the agent typically possesses more knowledge about the situation than the principal does.[9] This disparity can lead to adverse outcomes, such as moral hazard, where the agent takes riskier decisions due to limited accountability on his part, or adverse selection, where the principal inadvertently selects an unsuitable agent.[10] Addressing the problem of information asymmetry involves strategies such as independent verification, transparency mandates and regular reporting.

1.2 Traditional Principal – Agent Relationships

Principal – agent dynamics manifest across various domains, each illustrating unique challenges and solutions. In the employer – employee relationship, the employer relies on the employee to perform the allotted tasks efficiently, implementing mechanisms like performance reviews or other incentives.[11] Similarly, in a shareholder – manager context, shareholders hand over corporate governance responsibilities to the managers, employing tools like shareholder meetings and oversight committees to curtail mismanagement.[12]

Despite its broad applicability, the theory’s assumptions often oversimplify the complexities of real – world relationships. For instance, it presumes that the actions are rational and with clear objectives, both of which may be absent in relationships like that between a lawyer and client.[13] In these settings, societal obligations and ethical considerations further complicate this paradigm.

LAWYERS AS ADVISORS

Lawyers serve as trusted advisors, playing a critical role in guiding clients through complex legal landscapes. This role demands objectivity, strategic foresight and a strong relationship rooted in trust.

1. Objective and Strategic counsel

Lawyers provide impartial advice, free from personal bias or external influences, ensuring decisions are grounded in factual analysis and sound legal principles.[14] Their strategic guidance extends beyond addressing immediate legal issues, focusing on long-term alignment with the client’s overarching goals. This may include proactive planning, skilful negotiation, and crafting bespoke solutions tailored to the client’s unique circumstances.

1. Risk – based Guidance

By identifying potential legal, financial, and reputational risks, lawyers help clients navigate uncertainty.[15] They design risk mitigation strategies that balance exposure with opportunity, enabling informed decision-making.[16] A nuanced understanding of the client’s objectives and risk tolerance is key to this process.[17]

1. The Lawyer – Client Relationship:
   The effectiveness of a lawyer’s advice is intrinsically linked to the strength of the lawyer-client relationship, which is defined by:
   1. Fiduciary Duties: Lawyers owe their clients absolute loyalty, confidentiality, and a commitment to act in their best interests. These duties form the foundation of the relationship, fostering accountability and reliability.[18]
   1. Trust: Mutual trust is essential. Clients must feel confident in their lawyer’s integrity and discretion, while lawyers depend on complete transparency from clients to provide tailored and effective advice.[19]
   1. Expertise and Communication: Clients rely on lawyers for their specialized knowledge and ability to simplify intricate legal issues.[20] Clear and relatable communication ensures clients are equipped to make informed choices.

“The lawyer occupies a fiduciary position and must act with utmost good faith. As an advisor, he is expected to guide the client correctly, and as an advocate, to protect their interests zealously, but not at the cost of truth or justice.”[21]

LAWYERS AS ADVOCATES

“A legal advisor must perform his duty with reasonable care and skill, whether it is advocacy in court or giving advice outside it. The public interest is best served by holding lawyers accountable for both roles.”[22]

1. Representation and defence during disputes

Lawyers play a pivotal role in representing and defending clients in legal disputes, ensuring their rights and interests are protected within the bounds of the law. Advocates act as intermediaries between clients and the judicial system, employing legal acumen to present cases effectively, analyse evidence, and counter opposing arguments.[23] This role underscores the importance of expertise, diligence, and strategic reasoning in achieving favourable outcomes.

1. Ethical obligations

Advocates are bound by ethical duties that ensure the integrity of their profession.[24] The duty of passionate representation mandates lawyers to advocate vigorously on behalf of their clients, using all lawful means to uphold their interests.[25] However, this duty is balanced by the obligation to uphold justice and truth.[26] The duty of loyalty further obliges them to act in their clients’ best interests,[27] ensuring confidentiality[28] and avoiding conflicts of interest. These duties are integral to maintaining trust and integrity in the legal profession.

TENSIONS IN THE DUAL ROLE

The dual roles of advisory and advocacy in the lawyer-client relationship are fraught with inherent tensions that fundamentally challenge the principal – agent dynamic.[29] Lawyers, in their advisory capacity, are tasked with imparting dispassionate and strategic counsel, often necessitating dissuasion from legally viable but ethically tenuous actions.[30] However, when such advice is disregarded by the client, the lawyer may later be compelled to advocate for these very actions, creating an acute conflict between their advisory judgment and advocacy duties.[31]

Balancing the duty to the client with overarching responsibilities to uphold judicial integrity and the administration of justice further complicates this dynamic.[32] Lawyers owe their clients fair representation, but this obligation is tempered by their concomitant duties to the court and the justice system. For instance, advocating for a client’s position that skirts ethical boundaries or undermines judicial integrity places the lawyer in a precarious position, forcing them to reconcile competing loyalties with precision and ethical clarity.[33]

There also exists a possibility of role confusion due to these conflicting responsibilities and there is a chance the client may perceive a lack of loyalty on part of the lawyer if he puts his ethical responsibilities above his duty towards his client.

These tensions have seismic implications for the principal-agent dynamic, blurring the lines between deference to client autonomy and the exercise of independent professional judgment. Navigating these territories requires a lawyer to act with both integrity and pragmatism, ensuring that their conduct not only advances the client’s objectives but also upholds the broader principles of justice and the rule of law.[34]

CHALLENGES TO THE TRADITIONAL PRINCIPAL – AGENT THEORY

A lawyer’s professional duties and ethical codes uniquely challenge traditional notions of agency. Unlike ordinary agents, whose sole obligation is to advance their principal’s interests, lawyers must navigate a dual responsibility: advocating for their clients while upholding broader principles of justice, legality, and professional integrity. This dual role often leads to tensions, as lawyers are required to balance their duty to their clients with obligations to the legal system and the court.[35]

What sets lawyers apart from other agents is their function as guardians of the rule of law. Beyond furthering individual interests, they play a critical role in maintaining the fairness, integrity, and credibility of the legal system.[36] This professional mandate underscores that lawyers are not merely representatives but also stewards of justice, holding a responsibility that extends far beyond the conventional scope of agency.[37]

To illustrate, a lawyer defending a client accused of fraud may possess evidence indicating their guilt. While the lawyer must rigorously defend the client’s rights and interests, they are simultaneously bound by ethical obligations to avoid misleading the court or obstructing justice.[38] What this means is that the lawyer cannot openly proclaim that his client is not guilty but instead has to assert that the client’s guilt has not been proven beyond reasonable doubt.[39] This situation highlights the inherent tension in the lawyer’s role, requiring careful judgment to reconcile their duty to the client with their broader responsibility to the legal system, which is quite unlike the role that other agents play under the traditional principal – agent relationship.[40]

COMPARATIVE AND PRACTICAL PERSPECTIVES

The roles of advisory and advocacy are two sides of the same coin, but different legal systems around the world have different approaches towards this dual role of lawyers.

1. The Common Law System

In common law jurisdictions, lawyers perform distinct advisory and advocacy roles. To explain with an example, England stands as one of the foremost common law countries and in the United Kingdom, solicitors perform the advisory role, advising clients on various matters and maintaining confidentiality via solicitor – client privileges. On the other hand, barristers are the ones predominantly performing the advocacy role and representing clients in court. The “cab rank rule” in English law obligates the barrister to accept cases regardless of personal opinions about the client or their cause.[41] This rule ensures impartial access to legal representation.

1. Civil Law System

Civil law jurisdictions like France and Germany emphasise the codified nature of law and the collaborative role of lawyers. In France, lawyers, who are called Avocats have a monopoly over the advocacy aspect, representing clients in court, while they can share the advisory aspect of counselling clients and drafting of contracts with other professions.[42]

1. Hybrid System

The Indian legal system blends the common law and civil law system, reflecting its colonial history and unique constitutional framework.

The Indian Constitution[43] allows lawyers to file Public Interest Litigation (PIL) to represent societal interests and there have been countless landmark cases for the same, covering different issues of public concern.[44] These provisions in the Indian constitution as well as various laws and rules in place allow lawyers to optimally fulfil their responsibilities towards their clients as well as society at large.

REVISED MODEL

The lawyer – client relationship has traditionally been understood through the lens of agency law, where the lawyer acts as an agent representing the client’s interests. However, this model often oversimplifies the multifaceted roles lawyers play.

Instead, I believe that a new model should be introduced, that reimagines the lawyer – client relationship.

I propose a more dynamic model, called the Relational Accountability Model (RAM), based on the mutual accountability instead of the traditional unilateral principal – client relationship. This model acknowledges the interdependence between lawyers and clients while integrating broader responsibilities to justice and society.

7.1 Core concepts:

1. Relational agency

Under this model, the lawyers are not mere agents of the client but are instead partners in decision – making.

An emphasis will be placed on mutual understanding, where the lawyers advice clients on both legal matters and its broader societal implications.

1. Collaborative empowerment

The lawyers will empower the clients by helping them understand the legal process and various consequences of different actions, which encourages informed and participatory decision – making.

1. Justice – centred duty

The lawyer’s role extends far beyond his responsibility towards the client, it involves safeguarding the integrity of the legal system and upholding justice.

This aspect integrates ethical deliberation into practice, ensuring contribution to societal fairness.

1. Adaptive roles

Lawyers oscillate between the roles of advisors, negotiators, advocates, and educators, depending on the context. This model recognises that legal practice is not static and adapts to the needs of both the client and the justice system.

7.2 Practical Application

1. Legal Ethics – Ethical codes can be incorporated into this framework to ensure that lawyers are trained to balance client loyalty with broader societal duties.

1. Education and Training – Law schools can teach the RAM framework to students through case studies and mock trials to explore scenarios where competing obligations arise. Such modules will help future lawyers hone their skills before facing such situations in real life.
   
   
2. Professional Practice – When meeting clients, lawyers should clarify their dual obligations right at the onset to maintain transparency.

7.3 Benefits of RAM

1. Strengthened Trust: Clients understand the dual roles of their lawyers, leading to greater transparency and trust.
2. Enhanced Ethical Practice: Lawyers are equipped to navigate ethical dilemmas that arise from competing obligations.
3. Improved Justice Outcomes: Lawyers contribute positively to the justice system by balancing advocacy with societal fairness.
4. Flexibility in Complex Cases: Adaptive roles allow lawyers to respond effectively to diverse legal challenges.

RAM redefines legal practice by prioritising the interplay between client needs, lawyer expertise, and societal justice, creating a more holistic framework for understanding the lawyer – client relationship.

CONCLUSION

The dual roles of lawyers as advisors and advocates present a complex interplay of responsibilities that extend far beyond the conventional principal – agent dynamic.[45] Rooted in a blend of fiduciary duties, ethical obligations, and professional acumen, lawyers occupy a pivotal position in safeguarding both client interests and the integrity of the legal system.[46] While the principal-agent theory offers a foundational understanding, its limitations underscore the need for a more nuanced framework that reflects the multifaceted nature of legal practice.

The proposed Relational Accountability Model (RAM) presents a progressive reimagining of the lawyer-client relationship. By emphasising relational agency, collaborative empowerment, and justice – centred duties, this model not only addresses the tensions inherent in a lawyer’s dual roles but also enhances transparency, trust, and adaptability. Importantly, it aligns legal practice with broader societal goals, ensuring that lawyers remain stewards of justice while also advocating for their clients.

In an era of increasing legal complexity and ethical scrutiny, RAM offers a forward-looking paradigm that equips lawyers to navigate evolving challenges with integrity, pragmatism, and a commitment to fairness. By fostering a symbiotic relationship between lawyers, clients, and the justice system, this model heralds a transformative shift toward a more equitable and accountable legal framework.

BIBLIOGRAPHY

Alexander Trott, Stephen Zhang, et.al, Solving Dynamic Principal-Agent Problems with a Rationally Inattentive Principal, Cornell University Press, 2022.

Alice Woolley, The Lawyer as Advisor and the Practice of the Rule of Law, 47 UBC Law Review, 2014.

Anirban Chakraborty, Ethical Dilemmas in the Lawyer–Client Relation: Concerns and Solutions, Asian Journal of Legal Education, 2020.

Avinash Singh, Can a Lawyer Defend Someone Who is Guilty, Astor Legal, 2022.

Christopher Whelan, Ethical Conflicts in Legal Practice: Creating Professional Responsibility, South Carolina Law Review 52:697-727, 2001.

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Deborah A. DeMott, The Lawyer as Agent, 67 Fordham L. Rev. 301, 1998.

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Donald C. Langevoort, Dual Role Advisors and Conflicts of Interest, Georgetown University Law Centre, 2007.

Eugene F. Fama, and Michael C. Jensen, Separation of Ownership and Control, Journal of Law and Economics, vol. 26, no. 2, pp. 301-325, 1983.

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Hazard, Geoffrey C., and William Hodes, The Law of Lawyering, Aspen Publishers

Kathleen M. Eisenhardt, Agency Theory: An Assessment and Review, Academy of Management Review, vol. 14, no. 1, 1989, pp. 57-74.

Manoj Mate, Public Interest Litigation and the Transformation of the Supreme Court of India in Consequential Courts: Judicial Roles in Global Perspective, Cambridge University Press, 2013.

Matthew Harding, Trust and Fiduciary Law, Oxford Journal of Legal Studies 33(1):81-102, 2013.

Michael C. Jensen, and William H. Meckling, Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure, Journal of Financial Economics, vol. 3, no. 4, pp. 305-360, 1976.

Musawir, A. U., Revisiting the Principal–Agent Framework in the Context of Projects: Drawing Parallels with Corporate Governance. Project Management Journal, 2024.

Nick Vineall K.C., The cab rank rule and Legal Representation, The Bar Council of England and Wales, 2023.

Simon, William H., The Practice of Justice: A Theory of Lawyer’s Ethics, Harvard University Press, 1998.

Stephen A. Ross, The Economic Theory of Agency: The Principal’s Problem, The American Economic Review, vol. 63, no. 2, 1973, pp. 134-139.

Sterling Miller, The legal team and risk management: What you need to know, Thomson Reuters, 2023.

Thomas Spahn, Conflicts between Lawyers and their Clients, McGuire Woods LLP, 2014.

Thomson Reuters Legal Insights, In-house Counsel’s Dual Role and Ethical Considerations, 2024

Torben Bernhold and Niklas Wiesweg, Principal–Agent Theory: Perspectives and Practices for Effective Workplace Solutions, Handbook of Management Theories, pp. 117 – 128, 2021.

Vincent Mtavangu, Balancing a duty to the Court and to the client: A dilemma of legal practice in Tanzania, Open University Law Journal, 2013, Vol. 4, No. 2:147-166, 2014.

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[1] Henry David Thoreau, Slavery in Massachusetts, 1854

[2] Alice Woolley, The Lawyer as Advisor and the Practice of the Rule of Law, 47 UBC Law Review, 2014.

[3] Ibid

[4] Deborah A. DeMott, The Lawyer as Agent, 67 Fordham L. Rev. 301, 1998.

[5] Principal Agent Theory, Programme on Negotiation, Harvard Law School

[6] Supra note 2

[7] Core Econ, https://www.core-econ.org/the-economy/microeconomics/06-firm-and-employees-09-labour-discipline-model.html (last visited Dec. 20, 2024)

[8] Michael C. Jensen, and William H. Meckling, Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure, Journal of Financial Economics, vol. 3, no. 4, pp. 305-360, 1976.

[9] Alexander Trott, Stephen Zhang, et.al, Solving Dynamic Principal-Agent Problems with a Rationally Inattentive Principal, Cornell University Press, 2022.

[10] Guru Guruganesh, Jon Schneider, et.al, Contracts under Moral Hazard and Adverse Selection, ACM Digital Library, pp. 563 – 581, 2021.

[11] Torben Bernhold and Niklas Wiesweg, Principal–Agent Theory: Perspectives and Practices for Effective Workplace Solutions, Handbook of Management Theories, pp. 117 – 128, 2021.

[12] Musawir, A. U., Revisiting the Principal–Agent Framework in the Context of Projects: Drawing Parallels with Corporate Governance, Project Management Journal, 2024.

[13] Anirban Chakraborty, Ethical Dilemmas in the Lawyer–Client Relation: Concerns and Solutions, Asian Journal of Legal Education, 7(1), pp. 25-34, 2020.

[14] Dentons, https://www.dentons.com/en/insights/newsletters/2024/january/29/practice-tips-for-lawyers/a-dual-role-lawyers-and-advisers (last visited Dec. 27, 2024)

[15] Sterling Miller, The legal team and risk management: What you need to know, Thomson Reuters, 2023.

[16] Understand risk tolerance by adopting an owner’s point of view, Thomson Reuters, 2021.

[17] Supra note 15

[18] Daniel R. Nappier, Blurred Lines: Analysing an Attorney’s Duties to a Fiduciary Client’s Beneficiaries, Washington and Lee Law Review, 2014.

[19] Matthew Harding, Trust and Fiduciary Law, Oxford Journal of Legal Studies 33(1):81-102, 2013.

[20] Supra note 13

[21] P.D. Gupta v. Ram Murti and Anr. (1998) 7 SCC 248

[22] Arthur J.S. Hall & Co. v. Simons [2000] UKHL 38

[23] American Bar Association Model Rules of Professional Conduct, Rule 1.1 (USA).

[24] Bar Standards Board Handbook, Core duty 3, 2023 (United Kingdom).

[25] Ibid, Core duty 2

[26] Ibid, Core duty 1

[27] Supra note 25

[28] Supra note 26, Core duty 6

[29] Supra note 4

[30] Thomas Spahn, Conflicts between Lawyers and their Clients, McGuire Woods LLP, 2014.

[31] Ibid

[32] Christopher Whelan, Ethical Conflicts in Legal Practice: Creating Professional Responsibility, South Carolina Law Review 52:697-727, 2001.

[33] Vincent Mtavangu, Balancing a duty to the Court and to the client: A dilemma of

legal practice in Tanzania, Open University Law Journal, 2013, Vol. 4, No. 2:147-166, 2014.

[34] Supra note 30

[35] Supra note 33

[36] Supra note 34

[37] Ibid

[38] Avinash Singh, Can a Lawyer Defend Someone Who is Guilty?, Astor Legal, 2022

[39] Ibid

[40] Supra note 37

[41] Nick Vineall K.C., The cab rank rule and Legal Representation, The Bar Council of England and Wales, 2023.

[42] Conseil National Des Barreaux, https://www.cnb.avocat.fr/en/role-lawyer (last visited Dec. 22, 2024)

[43] India Const art 32

[44] Manoj Mate, Public Interest Litigation and the Transformation of the Supreme Court of India in Consequential Courts: Judicial Roles in Global Perspective, Cambridge University Press, 2013.

[45] Supra note 40

[46] Supra note 18

Aishwarya Bhattacharya