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No, it is an original story. The chemical company depicted in the film is said to represent the Monsanto Company.
By accepting Clayton's bribe she admitted to 1) The murder of Arthur Edens, 2) The attempted murder of Michael Clayton, and 3) Prior knowledge to the fact that the company had willfully and purposefully disobeyed the law. The bribery could not be touched by entrapment standards either because of the fact that the crimes had already been committed and just used the bribe to push out a confession.
Michael Clayton is what's described as "a fixer". This means that he fixes problems for the firms clients. While, in a sense, all of the firms attorney's fix problems, Clayton specializes in more sensitive issues, ones that sometimes skirt the boundaries of legality or morality. As he explains towards the end he does things like suppress embarrassing photos, convinces the police not to press charges, cleans up drunk or high clients etc etc. He knows all the firms dirty laundry but he isn't a partner (as Karen Crowder notes) and does not practice law in any traditional sense.
A few years ago Michael Clayton invested in a restaurant with his brother. As he explains this was meant to be a safety net, a separate source of income so that if he ever had to leave the firm he could. He sunk most of his money into the restaurant and borrowed from some shady characters. At the start of the story the restaurant has failed and his brotherwho seems to have embezzled money has fled. Michael is left to settle the debt. The restaurant serves to heighten the tension for Michael and to explain why he can't simply walk away from a firm which he's obviously increasingly unhappy with.
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