Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

In United States v. Stein, 435 F. Supp. 2d 330 (S.D.N.Y. 2006), the court found that if a company agreed to indemnify its employees for their legal expenses and advance attorneys' fees in the absence of a statutory or contractual duty to do so, this may be construed as an act of non-cooperation and a factor weighing in favor of indictment.

Faced with the "corporate equivalent of capital punishment" if indicted, KPMG abandoned its practice of paying its partners' pre- and post-indictment legal expenses. KPMG would not pay legal fees to any employee who refused to talk to the government or invoked the Fifth Amendment; fees were capped at $400,000; and payment of all legal expenses would be stopped if the employee were charged.