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This content originally appeared in The Global Lawyer — our weekly summary of the major news and trends affecting the global legal industry. I’m Lisa Shuchman, executive editor of Law.com International. Please feel free to contact me here, and If you’d like The Global Lawyer to arrive in your inbox every Monday, sign up here.

Much of the world is celebrating the Year of the Ox this week—a year in the Lunar Calendar that symbolizes honesty, patience, hard work and positivity. And much of the world is feeling more positive, as people are finally able to imagine a post-COVID future. But as the threat of the virus still looms, as global warming continues to destroy the planet, and as people across the globe fight oppression and persecution in different forms, corporations and law firms are beginning to acknowledge that they have a role to play in making a difference.

This has become evident in our recent reporting on environmental, social and governance practices, which are proliferating at law firms around the globe. The momentum is driven by government regulations, institutional investors, and corporate clients.

Dylan Jackson wrote last week that Seyfarth Shaw announced it has formed an ESG group, co-led by attorneys based in London, Chicago and San Francisco. The same day, Hunton Andrews Kurth announced the formation of its ESG group. And Orrick Herrington & Sutcliffe bolstered its ESG practice with the hire of Ashley Walter, an expert in corporate and social responsibility, who will head the firm’s ESG team. And earlier this month, Gibson, Dunn & Crutcher announced its new ESG practice.

In Hong Kong, a former Jones Day partner launched a boutique law firm in Hong Kong last week that will focus entirely on sustainabilityBen McQuhae, an expert in sustainable finance, told Vincent Chow that his decision to launch his firm was prompted in part by pledges made by the governments of China, Hong Kong, Korea and Japan to achieve net-zero carbon emissions in the next few decades. McQuhae has also committed his firm to being a net-zero firm.

Other firms have also entered the fray. Last month, Asia correspondent Jessica Seah wrote that Rajah & Tann Singapore launched a sustainability practice; in November, Clifford Chance established an ESG taskforce; and in October, Baker McKenzie named its first chief sustainability officer.

A few firms have even committed to changes of their own. In December, Herbert Smith Freehills said it would cut its carbon emissions to net-zero by 2030Varsha Patel wrote. Back in April, Meganne Tillay wrote that CMS is aiming to become carbon neutral by 2025. And last month Freshfields Bruckhaus Deringer announced it plans to dramatically cut its use of airplanes as part of a five-year environment strategy for the firm. It has set out formal targets to reduce carbon emissions from global business travel by 30%, which will largely be focused on flying less, Varsha wrote.

Some firms have been ahead of the curve, steadily building up ESG practices for some time, including Wachtell, Lipton, Rosen & Katz, Paul, Weiss, Rifkind, Wharton & GarrisonFreshfields Bruckhaus Deringer, Ashurst and Winston & Strawn. In fact, as Hannah Roberts wrote in December, law firms have been scrambling to keep up with growing client demand for sustainability advice.

Why the race to build ESG practices?

This month, a case in France demonstrated just why these practices have become so crucial. An administrative court in Paris ruled that the French state is responsible for environmental damage caused by failure to uphold its commitments to combat climate change. As correspondent Anne Bagamery writes, the landmark ruling, dubbed by the French media “The Case of the Century.” is likely both to accelerate and to change the character of environmental litigation in France. Lawyers told Anne that the ruling would almost certainly lead to an increase in environmental litigation, on top of an already brisk business in France providing advice on environmental impact to a wide range of corporate clients.

But it’s not just France.

Our Africa correspondent, Jennigay Coetzer, wrote last week about a long-running dispute involving Royal Dutch Shell and a group of Nigerian villagers that ended with the Court of Appeal at the Hague ordering the oil company to compensate the Nigerian farmers and members of the community for damages caused by a 2008 oil spill. The court noted that Royal Dutch Shell had failed to install a leak detection system, which would have prevented the extensive damage. And as the lawyer for the Nigerian farmers pointed out, the case showed that European companies must behave responsibly abroad.

And our Latin America correspondent Amy Guthrie wrote that mining giant Vale agreed to a $7 billion settlement in Brazil to cover reparations for environmental and other damages caused by a 2019 dam rupture at the Córrego do Feijão iron ore mine that killed more than 270 people—marking what appears to be the largest mediation agreement to date in Latin America.

In the United States, the Biden administration has made climate change a priority and immediately had the U.S. rejoin the Paris Climate Accords. This month the Securities and Exchange Commission announced the creation of a new role—Senior Policy Advisor for Climate and ESG—which will advise on ESG matters and advance related initiatives that are likely to include ESG disclosure requirements for public companies. Experts also believe ESG is likely to be an increasingly important factor in the decision-making of investors and credit providers.

But the environment is not the sole focus of ESG. The German government published a draft supply chain law last week that aims to hold companies accountable for human rights breaches. The law would fine companies procuring parts or materials from suppliers that fail to meet minimum human rights and environmental standards.

Germany is not alone. The U.K. has its Modern Slavery ActFrance has its Loi de Vigilance. And the United Nations has issued Guiding Principles on Business and Human Rights. Multinational companies are increasingly concerned with business integrity risk management. Back in 2019, Debevoise & Plimpton created a Business Integrity Screen as a guide for businesses that are facing sanctions or lawsuits in light of human rights regulation.

One attorney I spoke with recently expressed hope that through ESG, lawyers could help advance human rights around the world. 

This conviction is also what Leo Strine, a former chief justice in the state of Delaware and a leading proponent of governance reform, espoused when he joined Wachtell, Lipton, Rosen & Katz back in April.

“I thought the importance of corporations in our society could not be measured by their stock price,” Strine said in a statement at the time, “and that it was critical to our nation’s well-being that powerful businesses treat their workers and consumers well, support the communities in which they operate, and focus on environmentally responsible, sustainable wealth creation.”

Perhaps we’ve come a long way since the Nobel Prize-winning economist Milton Friedman wrote that corporate executives should not act as if business has a social conscience—that they should recognize that their sole responsibility is to increase profits and shareholder value.

And if corporations truly acknowledge the need for change, law firms will jump through hoops to show their clients that they have the best team in the legal industry to help them navigate the road ahead.

And that could be a force for good.

Europe and Africa Rising

Last week, we saw Am Law 200 firm Armstrong Teasdale launch an office in London through the acquisition of U.K. firm Kerman & Co, instantly giving the U.S. firm more than 50 lawyers and staff in the U.K. And Justin Henry wrote that firm leaders say the move doesn’t just allow them to tap into London’s global network of financial industry clients. It also will serve as the firm’s “entrée into Europe,” they said.

In a post-Brexit world, it’s probably worth mentioning that Armstrong Teasdale managing partner David Braswell still recognizes London as the financial industry capital of Europe. But he also said that because of Brexit, it is critically important for the firm to have an office both in the U.K. and in the EU.

He also noted that the merger was driven by clients who needed international expertise, and that increased globalization is key for a law firm’s survival. (So much for the U.S. push to decouple from the rest of the world over the past four years!)

Other firms in Europe are also making changes: Last week, Anne Bagamery wrote that ECIJA has recruited two new partners to its Madrid headquarters. And the former head of Hogan Lovells in MoscowOxana Balayan, discussed with correspondent Eva von Schaper what it’s like to be a successful woman lawyer in Russia, why she uses Instagram to promote her firm, and what it’s been like to launch her own firm in the face of a multitude of challenges. Her words of wisdom for other women lawyers in Russia might resonate with women lawyers everywhere: “Girls, be different,” she said. “Because being different, means being innovative. This is something which can set you apart, regardless of gender.”

The legal industry is also expanding in Africa. In fact, DLA Piper’s recently appointed managing partner for the Middle East and Africa, Peter Somekh, told correspondent Jennigay Coetzer that he believes Africa is the future for law. The continent has long been viewed as high risk by law firms and their clients, but Somekh said African countries are making themselves more attractive for investment.

His view is echoed by Baker McKenzie’s new director of Africa operations, who was appointed in JanuaryBruce Schubach, previously the chief operating officer at the firm’s Johannesburg office, told Jennigay that the firm, which currently has lawyers in Johannesburg, Cairo and Casablanca, is looking to expand across the continent. There is good growth potential in Africa, he said, and clients have an appetite for entering the African market.

Map of the Asia Pacific

Acting in Asia

Asia has always been a difficult market for global firms, but last week Vincent Chow wrote a story about Steptoe & Johnson, which surprised the market when it moved into Hong Kong only a year ago—in the midst of a pandemic, rising U.S.-China tensions and political upheaval in Hong Kong. And in that year, the firm’s Hong Kong office has flourished. It tapped into a niche market where demand was high, Vincent explained, bringing its expertise in U.S. export controls and sanctions enforcement to the region at a time when such knowledge is sorely needed. Other firms generally handle export controls and sanctions from Washington D.C.

While some might question whether the firm can maintain its success, Hong Kong managing partner Wendy Wysong said the firm is committed to staying. “We’re not going anywhere,” she said.

Meanwhile, the growing legal market in Singapore has lured India’s largest full-service firm—Cyril Amarchand & Mangaldas. In its first-ever foray overseas, Cyril Amarchand is opening a representative office in Singapore with plans to apply for a foreign legal practice. The move appears to make sense. As Jessica Seah writes, Singapore ranked highest in terms of foreign direct investment into India for the 2019–2020 fiscal year, accounting for about 30% of foreign direct investment inflow. And disputes are also a big focus: Of all the international cases handled by the Singapore International Arbitration Centre in 2019, Indian parties accounted for the majority.

Speaking of arbitration, Hong Kong has been publicly disputing reports that Hong Kong’s position as a hub for international arbitration is in jeopardy, as companies are considering taking Hong Kong out of governing law and arbitration clauses in legal contracts because of China’s imposition of the national security law and doubts that the rule of law in Hong Kong will prevail. The Law Society of Hong Kong issued a statement touting the jurisdiction for arbitration and defending the independence of the judiciary. In addition, the Hong Kong Secretary for JusticeTeresa Cheng, wrote a letter to The Financial Times saying that despite the violence that Hong Kong experienced in 2019, the number of cases handled by the Hong Kong Arbitration Centre in 2020 had increased—an endorsement, she said, of the city’s reputation as an “effective and neutral international legal hub.”

Cheng, who is a former Hong Kong International Arbitration Centre chair, is also planning to make a presentation in a webinar later this month where promoters say she will stress that Hong Kong is unmatched in providing deal-making and dispute resolution services in the Asia-Pacific region. The title of the webinar is, “Why Hong Kong is Irreplaceable.”

A new edition of The Global Lawyer is published every Monday. Sign up here to receive it as a weekly email. And please feel free to reach out to me at [email protected]

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Lisa Shuchman

Lisa Shuchman is Executive Editor of Law.com International. At ALM she has also worked for The American Lawyer and Corporate Counsel. Prior to joining ALM, she worked in Japan for The Wall Street Journal and The New York Times, and in the U.S. for the Associated Press, The Industry Standard, and regional newspapers. Contact her at [email protected] On Twitter: @LisaLawReporter

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