Surveyors, accountants and attorneys. (What do they have in common?)



Imagine, if you can, that you are a principal in the world’s fifth largest surveying engineering corporation. Your company is known throughout the United States as a leader in every aspect of business, technology and ethics. Your command of top fees is the envy of the profession, all members of which strive to emulate your success. Your company has written the book on carrying professional services to world-class levels.

Now imagine that one of your clients is the biggest land developer/home builder in the country and your company stands accused of giving bad advice that led to such risky speculative ventures that major projects have collapsed and this client has suddenly declared bankruptcy. The employees of the client firm have lost their life savings and are lining up to sue you for all you are worth. Not only that, you are accused of egregious violation of the most basic ethical standards of your profession: you have provided expert opinions on the suitability of projects, while at the same time collecting enormous fees for professional services in the design of those projects. It has been found that many of the projects were not suitable for development due to land title problems, topography and environmental conditions. In trying to cover their tracks your managers destroyed notes and files connected to the failed projects. Your firm is simultaneously being sued by your client’s employees, pilloried in the press and is subject to criminal action for obstruction of justice through the destruction of evidence.

An impossible scenario, you say? Consider what has happened to Arthur Andersen LLP in the past few months. Andersen, the nation’s fifth largest accounting firm, was an advisor to Enron, the huge Texas energy firm that is currently in Chapter Eleven proceedings. In its role as consultant, Andersen advised Enron on strategies intended to mitigate its tax burden and accounting methods intended to mask the relationship of subsidiaries and the implications of their debt on the apparent value of the parent firm. Now Enron’s house of cards has collapsed, exposing its questionable business practices and bringing to light Andersen’s questionable advice. But Andersen was also the auditor of Enron’s books. In our system the auditor’s responsibility is not to its client, but to the public, especially that segment of the public that invests in stock and looks to the auditor for true and objective reporting on the financial health and sound business position of any company whose stock is offered in the public market.

This case raises the question of whether a professional can give business and tax advice on the one hand, and make objective audit analysis on the other. At the time of this writing a negotiator for Andersen, Paul A. Volcker, former chairman of the Federal Reserve, has proposed reorganizing the company to eliminate the consulting side, making Andersen a pure auditing firm in exchange for the government dropping its criminal indictment (in the obstruction of justice claim). Volcker’s strategy is to get rid of a criminal indictment by removing a business structure that has created untenable ethical conflict.

Returning to our hypothetical surveying engineering firm and its difficulties, you may see the possibilities parallel to the Enron fiasco. Surveying is a profession that demands objectivity of its practitioners. In the determination of the location of title to property we have a major duty to the public. In determining the suitability of a site for development, whether the issues are title, location or the environment, while we have a duty to the public we may sometimes find it difficult to ignore loyalty to a client who is paying our fee. A few in the surveying business provide what might be termed a pure surveying service. That is, they make property retracement surveys. They arrive at opinions as to the location of title, publish plans and set permanent markers memorializing their opinions. But they do not provide consulting services to the land development industry. However, we all understand that the industry needs our expertise as consultants, and most of us need the broader practice if we are to make a decent living. The trick is to walk that narrow line between objectivity and subjectivity, to serve our clients while recognizing our duty to the public; and that is apparently where Enron (some say Endrun) failed.

It is this “duty of objectivity” that surveying and accounting have in common. We are a recognized profession with a rigorous ethical code and public responsibility. When we fail in that duty and get in trouble with the law, a third professional—the lawyer—enters the scene. The Enron/Andersen affair underscores the essential difference in the duty of the lawyer compared to that of the surveyor and accountant. The lawyer’s duty is, first of all, to the client. That difference was made dramatically obvious in a New York Times article titled “Enron Cases Await. Let The Swaggering Begin” (March 23, 2002). The theme of the article was the widespread interest in the legal community over this case and the eagerness of some of Texas’ best-known attorneys to be involved. “Where litigation is a spectator sport, the competitors are lining up” a commentator said. One $900-an-hour lawyer expressed disappointment that he had to represent Enron rather than the plaintiffs bringing suit against the company. “Were it not for the fact I was representing Enron in October, I would probably be suing them. I feel like the drummer who left the Beatles before they became famous.”

Clearly, the big money in these tort cases awaits the plaintiff’s lawyer who, working on a contingency arrangement, stands to make big bucks. What is equally evident is that for an attorney it matters not which side one takes in a case. Because it is the attorney’s duty to represent the client, not to determine blame, the good litigation attorney can take either side much the way a high school debater is expected to argue either side of an issue. It is a luxury not enjoyed by the ethical surveyor or accountant.