While the business decision/ethical decision dichotomy might explain why someone first thinks of committing fraud, I do not think it is an adequate explanation of why they go on and commit the fraud. The loan company executive might have been so focused on saving his business that he overlooked the damage that his fraud could cause. His colleagues may have been willing to help him because they viewed this as necessary to help a friend and meet business objectives, and they didn’t give much thought about the illegality of fabricating mortgage transactions. Hovering over all these decisions was the acceptance of the idea that the likelihood and consequences of being discovered was less than the likelihood that they and Mr. Groves would be in a bad situation if they did not commit the fraud.

There are at least two responses to this scenario. One is to increase the probability of the authorities imposing legal sanctions. This entails more monitoring and enforcement resources. In a free society, there has to be a limit on how far that solution can go. Another option is to increase the likelihood that extralegal sources will detect and punish you. Hence, the suggestion that was made on the program of requiring businesses to change auditors often is likely to be more effective than the disclaimer proposal. The researchers thought that switching auditors might work because then relationships couldn’t form and the incentive to “help out a buddy” is gone. That’s probably right in many ways, but it could also work simply because eventually a fraud starts to unravel when to many people are in on it. It’s just a lot more likely that someone detects it.

For lawyers, extralegal checks on behavior are often colleagues. Your colleagues may ostracize you if you do something unethical. They may assign you unpleasant tasks. They’ll keep you honest, like Mr. Collins requesting the shorthand notes from Baron Huddleston. We’ll have to check our own behaviors and those of our colleagues.