Notice And Comment: Representing Russia
Should Biglaw firms close their Russian offices and drop their Russian clients?
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On Monday, in response to the Russian invasion of Ukraine, Deloitte and EY announced plans to pull out of Russia. In doing so, they joined the other two Big Four accounting firms, KPMG and PwC, which announced on Sunday that they’d be withdrawing from Russia.
Since Russia’s invasion of Ukraine, major multinational corporations like Apple and Exxon have announced the suspension or termination of their operations or sales in Russia. But Biglaw firms trying to resist pressure to withdraw from Russia might argue that as providers of professional services, law firms owe duties to their clients that are greater than the duties that companies like Apple or Exxon owe to their customers. The retreats from Russia of accounting firms, fellow professional-services firms with deep client relationships, are harder for Biglaw to distinguish away—and significantly increase the pressure on law firms to depart from Mother Russia.
What have law firms done so far in terms of their Russian offices and clients? Not much. The most common response by firms to media inquiry is that they’re in the process of “reviewing” their Russian operations and client rosters.
As of yesterday, per Law360, only a handful of Global 200 firms have announced plans to shutter their Russian offices, most notably Linklaters, Norton Rose Fulbright, and Kennedys.1 As for clients, around a half-dozen law firms have announced plans to sever ties with at least some of their Russian clients—but for most of these firms, it appears that they’re actually required to terminate these representations because of sanctions. And some of these firms might be cutting ties with Russian entities not out of any noble desire to support Ukraine but because they’re worried about getting paid, now that Russian banks have been banned from the SWIFT international payments network.
This brings us to today’s topic for Notice and Comment: what should law firms do vis-à-vis Russia? Here are some questions to discuss and debate:
Should firms with offices in Russia shut them down?
What should firms do regarding their Russian clients?
For firms that decide to drop Russian clients, how far should they go? Should they drop all Russian clients, or only those clients subject to sanctions, or only those clients with significant ties to the Russian government (whether subject to official sanctions or not)?
Are law firms that leave the Russian market and Russian clients really punishing or pressuring the Putin regime? Or are these firms just making themselves feel better (and look better in the eyes of public opinion), while actually weakening the rule of law in Russia?
What do I think? My current view: Biglaw should get the hell out of Russia. But I admit that this is more of a gut reaction, fueled by the outrageousness of the Russian invasion, and I haven’t thought through all the angles. So allow me to play devil’s advocate for a moment.
Is my “get the hell out of Russia” position inconsistent with my general view that even the worst actors are entitled to legal counsel, and lawyers shouldn’t be held responsible or punished for the misdeeds of their clients? Consider this discussion by Dan Packel of the American Lawyer, based on correspondence he had with Peter Kalis, former chairman and global managing partner of K&L Gates:
Kalis believes it would be repugnant if firms turned their back on [Russian] clients in the face of social opprobrium, citing the presumption that lawyers should see their engagements through, as long as ethical and legal ground rules don’t indicate otherwise.
“I would rather have Russian clients properly advised by leading US and UK firms than see them blowing by sound counsel,” he wrote….
Kalis suggested that firms balance their representation of Russian clients with pro bono representation of Ukrainian refugees and relief organizations.
And there’s an argument that not all Russian clients are equally problematic. As Professor William Burke-White of Penn Law told Packel, “It’s one thing to not work for Russian state-owned enterprises; it’s another thing to think about what it means to abandon that market. I hope firms will think about how to disentangle themselves from elements of the Russian government but not completely abandon a country that depends on building the rule of law for its future.”
In the comments to this post, please share your thoughts on what Biglaw firms should do with their Russian offices and Russian clients. As usual, I prefer that you post in the comments instead of emailing me, since the whole point of Notice and Comment is to get readers to post comments.
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Norton Rose Fulbright’s move is noteworthy, since last week, the firm got a lot of flak for what looked like an attempt to muzzle its lawyers about the Russian invasion of Ukraine. But actions speak louder than words, and NRF’s willingness to withdraw from Russia, at a time when many other Biglaw firms are still twiddling their thumbs, should earn it some credit from its critics.
Posted on behalf of a reader who did not want to post under their own name (for reasons that will become clear when you read the comment—this might be an unpopular position. This reader also asked me to mention that they’re not a lawyer.
Start of comment:
I am starting to find it both very disappointing and, frankly, a little alarming how quicky hating all things Russian is coming into vogue. Stopping performing works of long-dead Russian composers, for example, or stopping eating at Russian-themed restaurants. It feels, from the sidelines, that increasingly merely being Russian is a crime, and how quickly we are falling into that place, all of us. Left and Right, British and American, German, and others. Despite all our fine words and aspirations, we are not so enlightened. Should actual war with Russia ever happen, can we be sure some sort of internal internment wouldn't happen? Six weeks ago, I would have said absolutely not. But now, now I am not so sure. In the US context, Korematsu casts a long shadow, and over here we had our own deportations, or things like the anti-Italian riots that occurred in London and elsewhere in the UK following Italy's entry in the Second World War.
I should say as well that I very much support Ukraine's right for statehood and independence, deeply deplore this invasion, and think we in the West should offer Ukraine absolutely every support we can that does not cause us to ourselves initiate hostilities with Russia. We should not be (and are not, it seems) neutral in this. Mind you, I have been thinking this since the 2008 invasion of Georgia, so I generally kept quiet about it because I hated being called a warmonger, etc.
So with that context:
(a) one should distinguish between the Russian state on one hand, and Russian individuals and corporations on the other. And still further differentiate between certain individuals and corporations (e.g., Putin-supporting oligarchs) and other individuals and corporations.
It should not be needed to be said, but if a Russian (or Belorussian) individual or company has vocally opposed the invasion, and taken solid steps to demonstrate that, they should be treated differently from a corporation tightly tied to a Putin supporter that has made comments supporting the invasion. By way of example of the former: Wargaming. A computer games company headquartered in Minsk though with games with a very large non-Russian playerbase, but which has publicly condemned the invasion, sacked one of its founding members over his support of the war, and pledged a large donation to Ukraine.
(b) one should distinguish between where the legal services are being offered.
In my mind there is a difference between something taking place in Russia, and something taking place over here. This may be a layperson's distinction. On a practical note though, given everything, I think most legal companies could be construed to have a duty of care to their staff to not keep them in Russia at this time.
(c) one should distinguish between different legal services, and different legal situations.
It is one of the supposed hallmarks of American legal culture: the right to representation. It even exists over here, though in a somewhat more attenuated form from what I understand given the state of our legal aid. Another such hallmark is that the State itself is bound by laws, and that people and organisations are allowed to dispute those laws - in the US case to argue they are even unconstitutional. Russian individuals and entities should absolutely still have those rights, even those linked to Putin. And should be able to be professionally represented. And, and this is crucial, those legal firms and individual lawyers should not be pressured not to do so.
One of the foundational events of the American legal mythos, to me, is John Adams defending the British soldiers caught up in the Boston massacre. And it was no token defence, from what I understand. Once he was persuaded to accept the task, John Adams was committed in their defence, despite the opprobrium of the times. John Adams, of course, was no ordinary person - but the point is that one should not have to risk opprobrium and censure when fulfilling as fundamental a role as providing legal representation to a person or entity against the State.
A second foundational example of this - given all the talk of Nazis and the like - is Nuremberg. Now I do not generally buy into the myth of Nuremberg - I think in reality Nuremberg had more than a little of the whiff of a show trial about it (and how could it not, given the Soviet presence and activity?) - but Nuremberg at least pointed the way to a different way of doing things. And for all its faults, at Nuremberg on the trials of some of the people who have fallen furthest from our common humanity, the defenders had the right to legal representation. In the modern trials from the break-up of Yugoslavia some truly heinous individuals were given basically every consideration - including automatic appeals. The lawyers on the defence were assiduous in their task.
Now criminal defence, or defending against the actions of the state, is one thing. But what about other legal matters. Well, if another company or individual begins a civil dispute with a Russian company, again it seems to be that the Russian company deserves to be able to be professionally represented, and that representation should be able to take place without fear. Some argue that sometimes the poorest cannot access adequate representation. That is sadly true in both our countries, but I struggle with the logic that because sometimes (even frequently) everything is not as it should be we should make it worse. The negativity repels me. If representation is important - and I believe it is - then the fact that a Russian company can afford it but someone else cannot is indeed an indictment of our own system, but then it is on us to change the system that leads to that outcome, not to prevent the Russian company from having representation.
At the risk of sounding too law-schooly, I then wonder about another scenario. Say a Russian company has a US patent. In the current mess, a US company or individual decides to try and ignore that patent. Should the Russian company be prevented from defending its IP in that situation through lack of legal representation? If the company has made definitive statements and actions opposing the invasion, then I would say absolutely not. But what about if the situation is otherwise? This one I think is tricky. One could argue that the patent might be seized or suspended as part of some sanction, and if so there would presumably be a legal process for that. However, I think we might be starting to walk down a very dangerous road if we were to say such a patent could be ignored by extra-legal means through the intimidation of legal representation.
(d) legal requirements.
We are obviously in a fast-moving situation. You already intimated that maybe some services have been withdrawn as a legal obligation due to sanctions. Obviously law firms have to obey the law. In that though I hope we can distinguish between what acts the law actually requires, versus using a law as a convenient excuse.
So in summary I am broadly in favour of continuing to represent Russian companies and individuals in a variety of scenarios. There may be some very practical reasons, which I both understand and endorse, why Western companies would withdraw services and staff directly from Russia right now. But when it comes to legal representation more widely, in quite a few contexts I believe "Russia" should still be represented, and I would generally think a more expansive view of that as well. As to why - when Putin would never accord us that same courtesy, when Putin is responding for the deaths of thousands and the deprivation of millions (and more likely tens of millions, if not hundreds, before this is over)? Because we are not Putin.
In Russia itself it is going to be hell. Sanctions, it seems to me, however necessary I think they are, are a shockingly blunt and indiscriminate tool - and we should not pretend otherwise. Like the bombing of Germany and Japan in WW2, however justified (and on the whole I believe they were), the fact remains the people who will suffer most will be ordinary Russians. If we had done better in 2014, or 2008, or 1998, or at any number of other points, things might be different. But past is past, But this is a topic that extends out of Russia.
To let Putin change who we are in our own realms and domains is to give him a power he does not deserve. We should glory in the fact that in our socities even our foes get to have their day in court, and even sometimes have amongst the best in the legal profession arguing their side. They may not win - but if and when their assets are seized or their businesses unravelled or the patents plundered, it will not be a capricious and arbitrary act of state power, but the application of a state power even then constrained by the rule of law.
I admit to being, at times perhaps, a hopeless idealist. But I would submit idealism is no bad thing. To adapt something from the late great Sir Terry Pratchett, if we cannot imagine a better world, how else can it become?
Posting two more comments from readers who emailed me:
1. "Everyone is entitled to the legal counsel they’ve hired to represent them and are not accountable for their government’s actions. I’m glad most firms have kept their ethics and their Russian clients. If the situation were reversed and our government did something another country didn’t agree with, I would be glad if the citizens of that country saw me as an individual, rather than a member of a tribal group."
2. "Any Russians who got the boot can come to me."