In some instances, reliance on counsel's opinion can at least be a defense against claims that you intentionally did something wrong.

Reminds me of this story:

https://a16z.com/2014/02/06/why-i-did-not-go-to-jail/

TL;DR, A widely respected CFO makes a suggestion regarding stock and being competitive as far as employee compensation. CFO says that they have done the same thing at numerous companies. The CEO is not very knowledgeable and asks the general council (who unlike a lot of places at the time reports directly to the CEO, not the CFO) to weigh in. General council says don't do it, so they don't. 2 years later, CFO goes to jail, CEO and everyone else stays out of jail because of a good decision.

I would extend your lesson and say to be sure you are asking a lawyer who has knowledge / experience in the area of law you're asking about.

Yes, but it also affirms what the parent was saying: if something doesn't smell right, get a second opinion. In this case, Horowitz got advice that said "do this thing that gives free money, even though no one else does it". That seemed too good to be true, and that's what triggered his insistence that the general counsel look at it.

That's an amazing story. Did PWC's people go to jail as well?

I don't know as I've no specific information on what they actually did.

However, it sounds a bit like backdating stock options type thing, and a fair amount of people went to jail over that across various industries.

A bunch of companies did it simply because they thought it was best practice, not for specifically immoral means. The majority of people who did it accidentally and could prove it with a paper trail of trying to follow auditors best practices got off with fines / warnings, which seems appropriate.

Back dating stock options (i'm still assuming that is what the situation was, I do not know) certainly was commonplace, I don't know how many people really knew the law.

I DO think there is something that should set off someone's spidy sense that "Wait, we're changing the dates on these options that already exist?" or "We're lying about the dates / price these options were really granted at?".

To me at least that raises a lot of questions just changing the date on something financal to say it happened in the past like magic. I'm not a lawyer, but I'd be very nervous about that.

Correct. Live and learn.

I think this is a concrete example of why to blindly trust legal advice.

There are some laws explicitly written to say that ignorance of the law is an excuse. "knowing an willing violation" (I don't know if this is one of them though)

Taking that to the logical extreme of having a legal opinion with every email puts you in a very privileged situation with the state

It exponentially increases the cost of the state to investigate. The state now knows you have a lawyer already, but doesn't know the contents of the advice and doesn't get to use things under attorney-client privilege even if a judge approved a fishing expedition that exposed your digital artifacts. And in the meantime it lowers your compliance burden if the advice says you don't have to comply, depending on how you compensate your lawyer your costs were super low.

If there is potentially criminal liability, but the burden of proof is a knowing and willful violation, then you're practically exempt because of the lawyer on payroll.

So in this case they negotiated the fine and get to improve operations.

Costs of investigating and prosecuting aside, the state likes to see a rationale for compliance. The lawyer also provides that, which you would prefer to have some case law to support it. This doesn't result in sanctioning the lawyer, its just not worth it to the state.

Knowingly and willingly usually refers to the level level of awareness that is required to be held culpable for a crime or violation. If the Lambda school was unaware that they were committing the conduct proscribed by law then they would have a defense (assuming knowingly and willingly was the standard required). However they do not need to be aware that the conduct was proscribed by law, just of the the conduct itself.

I thought lawyers are liable for bad advice?

If that were actually true they’d all go out of business.

They do/should have insurance for this kind of thing.

And usually lawyers are personally liable, so there is no “going out of business” unless they go personally bankrupt.

Dunno how true all of the above is in CA.

Get your own lawyer’s advice :)

Lawyers are liable for professional malpractice; whether particular bad advice is malpractice and whether the other party chooses to pursue it even if it might be are issues which affects whether they are liable for bad advice.

Legal counsel is about risk mitigation: do we fire this person?

The question isn’t whether it’s moral or ethical. It’s what the risk exposure? What are the likely outcomes? Do we have our bases covered?

Fire them! (Or, we can’t, it overexposes us, create a new department, assign them and then dissolve the department some time later and declare them redundant).

I'm not sure what you mean by this. When counsel tell you something is legal, and it isn't, there's little subjectivity.

The law has a few concrete, definitive truths but a huge volume of interpreted and subjective (and contradictory) statutes as well. Otherwise we wouldn't need lawyers in the first place

Exactly this! If the outcome for every case could be known in advance algorithmically or something we wouldn't have lawyers. Since the law is written by people and interpreted by people, it remains blurry when you zoom in close enough to specific unsettled cases.

> When counsel tell you something is legal, and it isn't, there's little subjectivity.

Stating that a thing is or is not legal is making a claim about the opinion other humans in positions of authority (whose specific identity is unknown) will have on a similar question in the future.

There is always subjectivity in it, since you are literally predicting someone else's subjective opinion. The objectivity of law is a conceit, not a reality.

But that’s not entirely a bad thing. It allows for things to change over time. It allows for example for states to crack down on vaccine exemptions and allows for taxation and regulation of interstate commerce, etc.

There is no such thing as “trusting” spiritual advice. By definition, there is no scientific way of confirming whether the advice is good.

But the legal system is so complex, how are you as a laymen suppose to verify it if you are basically the test case for trying something new?