(Here’s an email I just sent to my students:) The last micro-essay question on the final exam had to do with whether a lawyer should sign a contract on behalf of a client. Recall that in class I noted that if a contract were to go sideways, the lawyer’s signature on the document would create an opening for people within the client to point fingers at the lawyer. Well, that seems to have happened to the general counsel of Novartis, which entered into a consulting contract with Michael Cohen, the personal lawyer for now-President Trump:
Novartis’s top lawyer is to retire from the company over payments made by the pharmaceutical giant to President Trump’s personal lawyer Michael D. Cohen, the Swiss drug maker said on Wednesday.
In a statement, Novartis said that Felix R. Ehrat, the group general counsel, would be replaced by Shannon Thyme Klinger, who is currently the company’s top ethics officer, at the beginning of June. Mr. Ehrat was stepping down “in the context of discussions surrounding Novartis’s former agreement with Essential Consultants, owned by Michael Cohen,” the pharmaceutical company said.
“Although the contract was legally in order, it was an error,” Mr. Ehrat said. “As a cosignatory with our former C.E.O., I take personal responsibility to bring the public debate on this matter to an end.”
Prashant S. Rao and Katie Thomas, Novartis’s Top Lawyer is Out Amid Furor Over Payments to Michael Cohen (NYTimes.com May 16, 2018) (emphasis added).
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Signing a business contract:
Even though a company’s general counsel shouldn’t sign or co-sign contracts with any other authorized signatory, I’m wondering if Mr. Erhat would have kept his job if the signatory CEO was still with Novartis and if the contract itself would have had a more legitimate purpose.