At the start of its inquiry into Watkins' complaints, V & E acceded to Enron's wish that the scope of its investigation be sharply—indeed, ridiculously—curtailed. According to V & E's own "Preliminary Investigation" memorandum, the lawyers agreed to avoid desperately needed "second guessing of the accounting advice and treatment provided by [Andersen]," to refrain from a "detailed analysis of each and every transaction," and to omit a "full scale discovery style inquiry." Then, at the end of its very limited investigation, V & E reached the conclusion that no more thorough investigation was necessary. "The facts disclosed through our preliminary investigation," it advised, "do not, in our judgment, warrant a further widespread investigation by independent counsel and auditors."

In the corporate world, V & E's conclusion may go down in history as being famously wrongheaded. Certainly V & E turned out to be as foolish in declining to investigate further as Watkins was prescient when she warned, in her letter to Kenneth Lay, that absent further investigation and action, "I am incredibly nervous that we will implode in a wave of accounting scandals."

Finally, adding legal insult to injury, instead of applauding Watkins' candor and attempt to save the company, V & E apparently happily complied when Enron sought their legal advice as to whether it could fire or otherwise discipline her.

So V & E may not be to blame for the shoddy internal investigation. After all, it was Enron itself that defined the scope of the anemic investigation, and yes, Enron got what it paid for: an investigation that seemed meant to be, at most, a sop to Watkins and a way to "paper" a response to her complaints. As V & E cheerfully reminded Enron in its investigation memo, "[S]ome response should be provided to Ms. Watkins to assure her that her concerns were thoroughly reviewed, analyzed, and although found not to raise new or undisclosed information, were given serious consideration."

If only they actually had been.

The truth is, companies routinely dictate the boundaries of the tasks they ask outside lawyers to perform, and lawyers routinely follow these boundaries. V & E did the same. It's not clear that—given the strangling parameters imposed on V & E—its resultant advice was incompetent. Lawyers are not asked to spin straw into gold. A braver, better firm might have recommended a more thorough investigation, but V & E is not legally required to be a braver, better firm—only a minimally professionally competent one.