U.S. v. McClatchey

The McClatchey case represents one of the hardest scenarios for an attorney or compliance officer - where the client is determined to pursue a deal it desperately needs for revenue purposes that the lawyer or compliance officer thinks is very high risk or illegal. The prosecutors originally pursued Baptist's lawyers on the Baptist-LaHue deal as conspirators in a "paper transaction" - that is, creating a deal that looks legal on paper but which everyone knows is a fiction that doesn't really represent what's going on between the parties. The judge clearly felt that the lawyers had done all they could to advise their clients, and that they ultimately could not control the clients' behavior. The ultimate question this case raises for either a lawyer or a compliance officer is deciding when it is time to simply walk away. Doing this likely means losing your job or your client, and therefore is a decision made at tremendous costs. Should the lawyers representing Baptist Hospital have refused to do the deal? Why or why not?