Goodbye, Russia

Never before, and likely never again, will the legal industry see anything like what it witnessed last week: A succession of Big Law firms deserting a nation in the space of seven days.

It started with Linklaters on Friday, March 3: “We will wind down our operations in Russia and close our Moscow office. We will not act for individuals or entities that are controlled by, or under the influence of, the Russian state, or connected with the current Russian regime, wherever they are in the world.”

First to act. A new benchmark set.

Predictably the dominoes started to fall. Many firms emulated Linklaters by pulling out of Russia and ceasing to act for Russian clients. Others announced ‘reviews’ of their Moscow bases, or, counter-narratively, that they’d maintain their local offices. Our rundown of who’s staying and who’s going tells you everything you need to know.

It happened at pace and in such a frenzy that by the time this piece goes live, a few more might have gone public with their decisions to finally shutter. (Though some established players are expected to stay put. Among them is Skadden Arps, which said it would maintain its Russia office but that it was relocating Moscow lawyers due to what it described in an internal memo as growing “anti-American sentiment” in Russia.)

Though complex, many-sided, and by no means unconditionally positive, the decision to say goodbye to Russia is the right one.

Alongside the Coca-Colas, the Starbucks, the McDonalds, the BPs and Shells—all of which in their own way bade farewell to Moscow—Big Law and its high-earning, uber-qualified custodians of the courts, the law and justice, have lent the Russian state, its oligarchs and, by extension, the Kremlin, a polished legitimacy that Putin has used to advance his position in the world, and, in turn, to hone the vast resources gained into the blade that he now takes to Ukraine. Just as politicians and others in the ruling classes of the U.K., the U.S. and other states have acted as enablers to Putin’s favored oligarchs, Big Law’s dealmakers applied a sheen to the Regime as it sat at the table with the West’s captains of industry.

As the leavers started to pile up, it became more apparent to law firm leaders that the decision to uproot was the only available option. This is for one chief reason: that firms could do the right thing, and, crucially, be seen to do the right thing (and avoid appearing obtuse against the backdrop of a Western exodus), without making a firm-changing financial sacrifice. For instance, as Jack Womack discovered, the Moscow offices of both Linklaters and Allen & Overy, to name just two, accounted for around 1% of each firm’s global turnover. 

Leaving Russia never posed an existential threat to Big Law firms. But staying did pose a significant reputational threat in these firms’ most important markets: the U.S., the U.K. and Continental Europe—markets in which the Ukraine war has pulled at public heartstrings in a way that few other recent conflicts have; markets where, if reputations were to suffer, that would pose an existential threat.

But that’s not to say sacrifices aren’t being made. In Russian offices, the exodus will lead to job losses, difficult staff relocations for those that remain, and myriad other issues around staff safety, employment law and severance pay, as well as macroeconomic threats to global IPO and M&A markets, as Hannah Walker explains.

In last week’s The Global Lawyer, I described law firms as amoral entities. And, despite the closures, I don’t believe the events of the past week are any indication of a shift in Big Law’s moral constitution. If it were, then I’d expect to see, for example, urgent reappraisals of associations with the Saudi regime, whose own war effort continues to fuel one of the world’s biggest humanitarian catastrophes in Yemen; and of the lucrative channels of work that relate only obliquely to today’s rousing headlines, like the kind emerging from the Russia-China relationship, which Jessica Seah has more on here; and of the decision to remain silent on Ukraine, which appears to be a phenomenon in Latin America’s legal community, Amy Guthrie writes. 

The more stories we put out, the stronger seems the argument that lawyers are acting primarily, though not entirely, in their own commercial and reputational interests.

But that “doesn’t mean lawyers are evil”, a senior partner who called me last week was at pains to draw out for me, warning of the dangers of “allowing moralizing” without “recognizing complexity”, and of the seismic implications of denying legal representation to the oil and tobacco majors, the disreputable states, and other “morally complex” entities.

“We can’t get into a situation where it’s taboo to act for certain clients,” they said. “We have to be very careful about denying access to justice.”

Among partners I spoke with, there was a general agreement that pulling out of Moscow was necessary, if at least because “staying gives the world the wrong impression”. But in the same breath, another partner said his firm took the decision reluctantly, adding that “from the outside, there is a temptation to reduce economic, social, political and legal issues into ‘morals’”.

“But if you do that, you will always have losers,” they added. “And all of a sudden a group of people—in this case Russian people—become ‘bad people’ that urgently need to be cut loose. Is that moral?”

In her piece, Hannah discussed the parallel issue of treating all Russian clients the same way. Read it here.

As we can see, in the context of business, morality can be nebulous and, indeed, difficult for many to get a handle on. So much so that another senior partner I spoke with said that law leaders were often of the attitude “why bother with morals when we’re not required to. Not directly, anyway”.

“Lawyers are generally predisposed to sticking to the law,” the partner said. “And the law is complicated enough, so why fog it up further with all this morality talk. I know, that sounds cynical.” (Others disagreed, suggesting moral concerns were, by policy, on the table when deciding whether or not to accept instructions from a client, and that clients were, for moral reasons, routinely turned down.)

But where things are surely uncomplicated is when lawyers, duty bound to uphold the rule of law, are actively assisting those who seek to flout it (which, as James Carstensen reports, the International Bar Association accused the Russian Lawyers Association of doing by issuing “pro-war” statements.) 

Perhaps the rule of law is the answer. To navigate the foggy climate of morality, or circumnavigate it, a former senior partner at an elite U.K. firm offers the following advice.

“The rule of law and morality roughly correlate,” they said. “It’s about holding power to account, and preventing the arbitrary wielding of power. So if morality isn’t the first thing that comes into a lawyer’s mind, perhaps they can instead turn to the rule of law, and ask themselves, ‘By taking on this client, might we find ourselves aiding and abetting the contravention of the rule of law?’” 

Perhaps a more active observance of this advice would have seen more law firms thinking twice about representing Putin’s commercial arms, and thus avoiding the unprecedented challenge of disentangling from bases that have taken 30 years to build up.

Another concept that might help is perspective. If doubts over leaving Moscow remain, just remember how in Ukraine right now, lawyers are leaving their once-comfortable homes and desks to take up arms to protect their families: a must-read from Linda A. Thompson.