Law Firms and Russian Profits | Stanford Law School - Stanford Law School

Since Russia’s illegal and immoral invasion of Ukraine, hundreds of the world’s leading companies (from investment banks to consumer goods) have shuttered their Russian operations and undone decades of investments in a matter of days. These firms are incurring large costs and taking real risks to avoid aiding the Russian war effort.

Law firms have been slower to respond.

Firms have finally closed their Russian offices, but this is a modest and possibly misleading first step. When McDonald’s shuts its doors in Moscow, it does not mail burgers from London. By contrast, law firms can and do serve Russian interests from afar; if nothing else, COVID has taught us the possibilities of remote work. The point is not where service professionals work, but whether they’re helping to strengthen the Russian economy.

Some law firms are splitting hairs about which clients they will avoid. Some firms say they will no longer represent clients with “known ties to Russia’s war effort” or that “don’t share our values,” leaving plenty of room for serving the interests of Putin’s supporters.

Many other firms – particularly those without Russian offices – have not yet spoken about the topic. Some firms may have no Russian clients, but many work on matters that benefit or finance Russian corporate investments.

We believe democracy-loving firms will do more. Therefore, faculty and research staff from Harvard, Stanford and Yale Law Schools will track the AmLaw 100 firms and UK100 firms to see which have publicly committed not to profit from work that props up the Russian war effort.

Surprisingly, only a few U.S. law firms have yet committed to exit Russia entirely and/or decline new work from any Russian-based clients – something most of these commercial firms, each of the Big 4 accounting firms, consulting firms and every single consumer-facing firm that suspended operations in Russia (like VISA/MasterCard) have effectively agreed to; these other firms all refuse to profit from any Russian-based clients (rather than just those that are sanctioned or state-owned).

We expect this will change. While some lawyers have always prided themselves on defending all against criminal punishment, many types of legal practice are not very different from accounting – transactional practice, for example. Defending Nuremberg defendants is one thing, but helping Volkswagen borrow money or I.G. Farben expand globally during or in the lead up to WWII is another.

Below is a list of the AmLaw 100 firms that have pledged to:

1. decline any new work for clients based in Russia;
2. withdraw from any current such engagements unless prohibited by legal ethics or courts (other than work defending against Russian prosecution or civil suits).

4 Morrison Foerster “We strongly and unreservedly condemn Russia’s invasion of Ukraine. It is horrifying to witness the impact this is having on millions of people and the unfolding humanitarian crisis in Europe. Our thoughts are with the Ukrainian people. Multiple internal communications have been sent since the start of the war condemning the Russian regime’s actions, expressing our deepest sorrow for the Ukrainian people, and mobilizing our efforts to support them. The Morrison & Foerster Foundation announced several donations and launched a firmwide matching program in aid of charities responding to the humanitarian crisis, including International Rescue Committee, Project C.U.R.E., and World Central Kitchen at the end of February. Many of our colleagues have found additional ways to show their solidarity with the people of Ukraine and to support those impacted by the war, including refugees, including through our pro bono program. We have never had operations in Russia, have done very little work for Russian clients, and are disengaging from work for all such clients, subject to our professional obligations. We will not be taking on work for Russian clients going forward.”

Below is a list of the AmLaw 100 firms that have made the more limited pledge to:

1. decline new work for (a) the Russian government, (b) state-owned or state-controlled firms, and (c) sanctioned entities and individuals; and
2. withdraw from any current such engagements unless prohibited by legal ethics or courts (other than work defending against Russian prosecution or civil suits).

These firms retain the option of working for Russian clients that do meet these criteria. However, a Russian client wealthy enough to hire a big law firm for transactional work is likely connected to the Kremlin.

3 Hunton Andrews Kurth "Hunton Andrews Kurth LLP does not presently represent the Russian government, Russian state-owned or controlled businesses, or sanctioned entities or individuals. We do not intend to take on new work for any of the aforementioned entities and individuals." Emailed dated Mar. 16, 2022 Unclear whether will accept any new Russian clients. Unclear to what extent disentangling from all current Russian clients. 4 Norton Rose Fulbright "We are winding down our operations in Russia and will be closing our Moscow office as quickly as we can, in compliance with our professional obligations. The well being of our staff in the region is a priority. We thank our 50 colleagues in Moscow for their loyal service and will support them through this transition. Some immediate actions are possible and we are taking them. We are not accepting any further instructions from businesses, entities or individuals connected with the current Russian regime, irrespective of whether they are sanctioned or not. In addition, we continue to review exiting from existing work for them where our professional obligations as lawyers allow. Where we cannot exit from current matters, we will donate the profits from that work to appropriate humanitarian and charitable causes. " Silent on whether will accept any new Russian clients. Unclear to what extent disentangling from all current Russian clients.

Below are the AmLaw 100 firms that have not yet spoken about Russia, Ukraine, and their plans to withdraw, suspend, exit, decline matters, or otherwise address the topic.

For those firms without Russian clients or Russian-related business, this silence may be understandable, but since client identities are not observable to the public, their prospective recruits, or others, these firms may want to address the topic if only to say “we have no Russian clients and don’t intend to take on any.” Such pledges would reduce the risk that other firms’ withdrawals from current engagements might be seen as benefiting their rivals.

Below are the AmLaw 100 firms that have issued statements about Russia or Ukraine and still have not clearly pledged to take the steps identified above. Firms in this list have announced some policy, but have not said they would (1) decline new work for the Russian government, state-owned/controlled firms, or sanctioned entities/individuals; and (2) withdraw from any current such engagements unless prohibited by legal ethics or courts.

Some firms have made clear statements about current clients or matters but not made clear commitments about future clients or matters. Clarity is important. We encourage firms to reach out to the email listed below if they believe they have made clear commitments of the kind described above.

Representing Russian Clients

While firms can and (we believe) should turn down all new pro-Russian business, we do not expect firms to immediately cease all representation of existing clients. Defending Russians against the Russian government would generally continue to be laudable, and rules of professional conduct regulate the circumstances and processes by which lawyers can withdraw from existing representation. .

Even when bound to continue representation, there is no reason law firms should profit by providing these services. Firms can demonstrate that their continued representation is driven by ethical concerns, and not fees, by committing to disgorge those fees to Ukrainian relief efforts, as Norton Rose has done. We will highlight firms that make this pledge as well.

Why track law firms?

We want to understand how law firms are responding to this seismic rupture in the international order and professional norms about client representation. Lawyers have a special obligation to support the rule of law and democratic freedoms. They also help grease the wheels of commerce. Lawyers are the “transaction cost engineers” that structure deals, help companies raise capital by issuing stocks and bonds, and comply with regulations. They can work to strengthen or undermine economic sanctions.

We hope it will help to collect information about the policies of these large law firms. Converging on a uniform standard can create a focal point that can be harder for firms to resist or obfuscate, and will remove the risk that a firm’s withdrawal will only benefit their rivals.

Updates

Our research team from Harvard Law School, Stanford Law School and Yale Law School will be updating these lists and adding UK100 firms over time. This coding is based on press reports, press releases and emails sent to us at the address below (unless we are asked not to release the contents).

If you have any questions or updated information about the firms on this list, please contact: [email protected].

This project is organized by Professors Ian Ayres, John Coates and Robert Daines.

source: https://law.stanford.edu/law-firms-and-russian-profits/

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