A Behavioral Theory of Legal Ethics

Behavioral insights have informed many areas of law, including the field of professional responsibility. Those insights, however, have had only a modest effect on the foundational theories of legal ethics, even though those theories are, at their core, prescriptions about human behavior. The reality is that lawyers’ conduct cannot be understood, theorized about, or used to produce the best possible regulations without an appreciation for the limits on human rationality and objectivity. A behavioral theory of legal ethics offers a way to incorporate those realties into the foundational debates on a lawyer’s professional role so that scholars can produce more useful, normatively appealing, and empirically justifiable models for lawyer conduct, regulation, and education

Behavioral Ethics: Can It Help Lawyers (And Others) Be Their Best Selves?

Using the principles of behavioral psychology and related fields, marketers have changed human behavior in order to increase sales. Governments have used these same principles to change human behavior in order to advance policy goals, such as increasing savings behavior or organ donations. This article surveys a significant portion of the new learning in behavioral ethics in support of the claim that by teaching behavioral ethics we have a realistic chance to improve the ethicality of human decisionmaking and actions

Corporate Law for Good People

This Article offers a novel analysis of the field of corporate governance by viewing it through the lens of behavioral ethics. It calls for both shifting the focus of corporate governance to a new set of loci of potential corporate wrongdoing and adding new tools to the corporate governance arsenal. Behavioral ethics scholarship emphasizes that the large share of wrongdoing is generated by “good people” whose intention is to act ethically. Their wrongdoing stems from “bounded ethicality”—various cognitive and motivational limitations in their ethical decision-making processes—that leads to biased decisions that seem legitimate. Bounded ethicality has important implications for a wide range of topics in corporate governance, like board structure, independent directors, regulation of institutional investors and proxy advisory firms, the business judgment rule, corporate liability, and intraboard fiduciary duties. In the legal domain, corporate law provides the most fertile ground for the application of behavioral ethics. It encapsulates many of the features that the behavioral ethics literature finds to confound the ethical judgment of good people, like principal–agent relations, group decisions, victim remoteness, vague directives, and subtle conflicts of interest. Behavioral ethics suggests a view of corporate law that is dramatically different than that portrayed by traditional legal and economic theorists. Not only does it suggest that wrongdoing can be committed by well-intentioned people who wish to do right, but also that the biases they display call for a radically different set of legal interventions than those advocated by standard economic theory. If standard theory views corporate agents as self-interest- maximizers, bounded ethicality perceives them as actors with varied and nuanced ethical motivations that could benefit from subtle legal reforms. This Article’s assessment of corporate governance through the behavioral ethical lens proceeds in three stages. First, it exposes potential wrongdoing by good people that conventional corporate governance does not address. Second, it suggests novel corporate governance interventions supported by behavioral ethics to address wrongdoing by good people. Finally, it identifies existing interventions that, according to behavioral ethics analysis, may have unintended adverse effects on the behavior of well- meaning corporate officers and exacerbate wrongdoing instead of mitigating it

Corporate Law for Good People

This article offers a novel analysis of the field of corporate governance by viewing it through the lens of behavioral ethics. It calls for both shifting the focus of corporate governance to a new set of loci of potential corporate wrongdoing and adding new tools to the corporate governance arsenal. The behavioral ethics scholarship emphasizes the large share of wrongdoing generated by good people whose intention is to act ethically. Their wrongdoing stems from bounded ethicality -- various cognitive and motivational processes that lead to biased decisions that seem legitimate. In the legal domain, corporate law provides the most fertile ground for the application of behavioral ethics since it encapsulates many of the features that the behavioral ethics literature found to confound the ethical judgment of good people, such as agency, group decisions, victim remoteness, vague directives and subtle conflict of interests. Bounded ethicality suggests a view of corporate law that is dramatically different than that portrayed by traditional legal and economic theorists. Not only does it suggest that wrongdoing can be committed by well-intentioned people who wish to do right, but also that the biases they display call for a radically different set of legal interventions than those advocated by standard economic theory. If standard theorizing views corporate agents as self-interest maximizers, bounded rationality perceives them as actors with varied and nuanced motivations that could benefit from subtle legal reforms.This Article\u27s assessment of corporate governance through the behavioral ethical lens proceeds in three stages. First, it exposes potential wrongdoing by good people that conventional corporate governance does not address. Second, it suggests novel corporate governance interventions supported by behavioral ethics to address wrongdoing by good people. Third, it identifies existing interventions that according to behavioral ethics analysis may generate unintended adverse effects on the behavior of well-meaning corporate officers and exacerbate wrongdoing instead of mitigating it. As we will show bounded ethicality has important implications for a wide range of topics in corporate governance, such as board structure, independent directors, regulation of institutional investors and proxy advisory firms, the business judgment rule, and corporate and intra-board liability

Cultures of Compliance

There has been a cultural turn in discussion and debates about the promise of corporate compliance efforts. These efforts are occurring quickly, without great confidence in their efficacy. Thus the interest in culture. This article explores what a culture of compliance means and why it is so hard to achieve. The dark side that enables non-compliance in organizations is powerful and often hidden from view, working via scripts that rationalize or normalize, denigrations of regulation, and celebrations of beliefs and attitudes that bring with them compliance dangers. The article addresses how both culture and compliance should be judged by those wishing for better corporate behavior

The Glucose Model of Mediation: Physiological Bases of Willpower as Important Explanations for Common Mediation Behavior

Success in life requires the ability to resist urges and control behavior. This ability is commonly called “willpower,” the capacity to overcome impulses and engage in conscious acts of self-control. Social psychologists believe willpower is a finite resource dependent on physiological bases including glucose (from food and drink), sleep and other forms of rest, and the absence of stress. In short, people who are hungry, exhausted, or highly stressed tend to have less willpower than those who are well-fed, well-rested, and relatively stress-free. In addition, a person who exerts self-control (uses willpower) tends to reduce temporarily the amount of willpower remaining, so decision-making and other aspects of self-control are weakened during this depleted state. Restoring willpower (and thus restoring decision-making abilities) can often be achieved by physiological replenishment, such as: ingesting glucose, sleep (and other forms of rest) and breaks from stress. The physiological bases of willpower combine with the importance of deadlines to offer a compelling explanation for why so many mediations follow a predictable pattern. Most significantly, the physiological bases of willpower go a long way to explaining why many mediations scheduled for a single day begin with stalwart opening positions and end with a signed settlement agreement late in the day. This Article provides a physiological explanation of typical mediation behavior and shows that an awareness of physiology reveals ethical issues with current mediation practice. Part I of this Article discusses the science, specifically the Strength and Glucose Models of Self-Control and their applications across studies of medicine, morality and negotiation. Part II outlines the course of a typical daylong mediation and shows the extent to which common mediation behavior is well-explained by the physiology of willpower when people are operating under deadlines. Part III examines the significance of the Glucose Model of Mediation by identifying ethical issues relating to willpower depletion in mediation

Insights from Psychology: Teaching Behavioral Legal Ethics as a Core Element of Professional Responsibility

Article published in the Michigan State Law Review