Big Law exits Russia
Large law firms are cutting ties with Russian clients and even shuttering their Moscow offices as U.S. and European sanctions hit blue-chip clients, and Russia's cut off from segments of the global financial system.
Why it matters: Big Law is just one of a host of sectors fleeing Russia amid its invasion of Ukraine. But its exit could deprive oligarchs and Russian multinationals of vital services connecting them to business and financial systems.
- American and European law firms have been central to Russia's integration into the global economy.
- Firms based in London, New York and other business hubs have brokered massive deals and structured billions in assets.
Driving the news: Axios contacted 30 major American and European law firms with offices in Moscow and St. Petersburg — some with hundreds of attorneys there — to see if they plan to maintain their presences in Russia.
- At least five firms — the London-headquartered Linklaters, Norton Rose Fulbright and Freshfields Bruckhaus Deringer; Helsinki's Borenius; and the American firm Morgan, Lewis & Bockius — plan to shutter their Russian offices entirely.
- Another, Swedish firm Mannheimer Swartling, said it has suspended operations in Russia and is "analyzing" whether to exit the country.
- Three firms — New York's Cleary Gottlieb, Chicago's Winston & Strawn and Amsterdam's Houthoff — said they will drop all Russian government and state-sponsored clients.
- New York's Debevoise & Plimpton said it has "taken action to terminate several client relationships," is not taking on new clients at its Moscow office and is "conducting a review of the status" of that office.
- White & Case, another New York firm, is keeping its Moscow office open but officials said they "continue to review our Russian and Belarusian client activity and are exiting some representations in accordance with our professional responsibilities."
- Clifford Chance, another London-headquartered firm, says it will not take on new Russia work, and will "review" existing work to ensure it aligns with sanctions and "our responsible business principles and values."
- Two other firms — London's Allen & Overy and Hogan Lovells, co-headquartered in London and Washington — also said they'll drop clients that don't align with "our values" but did not elaborate.
- Five additional American and British firms told Axios they're "examining" or "reviewing" their work in the country but were less committal about next steps.
What they're saying: Advocates of stronger economic penalties against Russia told Axios the Big Law exodus could be an important pressure point against Moscow.
- "It can only be good for democracy that they are now leaving Russia," said Paul Massaro, a senior policy adviser at the U.S. Commission on Security and Cooperation in Europe — commonly known as the Helsinki Commission.
- Prominent global law firms have represented wealthy Russians and large companies in the country not just on strictly business matters, but also on public relations, said Elise Bean, former staff director on the Senate Permanent Subcommittee on Investigations.
- "If you cut off legal advice to these guys, it's going to have repercussions in tax, in securities, in investments and in reputation management," Bean told Axios in an interview.
Between the lines: Many firms drawing down their Russia operations have worked extensively in the past with pillars of the country's economy — including companies hit by U.S. and European Union sanctions during the past two weeks.
- Nearly all of the firms Axios contacted said they are carefully managing their Russian portfolios to ensure they comply with those sanctions — and dropping clients as necessary.
- That past work has, nonetheless, drawn public scrutiny since the Russian invasion, with media coverage and lawmaker criticism of firms that have worked in the past with Kremlin-aligned companies.