Representing the healthcare organization in a post-Sarbanes-Oxley world: new rules, new paradigms, new perils.

The Sarbanes-Oxley Act (Act) significantly changed the expected corporate behavior of public companies. The Act governs the relationship between corporate organizations and their in-house or outside counsel. Under Section 307 of the Act, the Securities and Exchange Commission initially proposed expansive rules regarding counsel's duties. After comments and criticism from much of the bar, a final, narrower, version of rules under Section 307 (Final Rule) was adopted. The Final Rule contains alternative reporting procedures, attorney responsibilities, and sanctions for violations. In addition to the Act, the American Bar Association's (ABA) Task Force on Corporate Responsibility(Task Force), which was itself a reaction to Enron, reported on the importance of counsel's role in a corporate setting (Cheek Report). The ABA adopted amendments to its Model Rules of Professional Conduct (Model Rules) 1.6 and 1.13 as proposed in the Cheek Report. The Final Rule and amended Model Rules together suggest that attorneys may owe duties beyond those owed to their clients.