Who's binning Vlad and his pals?
UK law firms have responded to Putin's invasion of Ukraine by taking a stand - or by staying very quiet indeed.
RollOnFriday approached over 100 firms to ask them what actions they were taking with regard to their relationships with clients linked to Putin's regime.
A large number of firms did not respond, including Bird & Bird, Carey Olsen, Cleary, Cooley, Davis Polk, Debevoise & Plimpton, Eversheds Sutherland (update: see below), Farrers, Fried Frank, Gibson Dunn, Gowling WLG, Greenberg Traurig, Jones Day, Latham & Watkins, Mayer Brown, Mills & Reeve, Morrison & Foerster, Ogier, Ropes & Gray, Shoosmiths, Taylor Wessing, Trowers & Hamlins, Weil, Willkie Farr, and Withers.
Putin's prize for Best Friend in the West goes to Freshfields, which is actively working to retain its links with his murderous regime. It has applied to continue to act for the sanctioned VTB group in litigation arising from a bonds scandal in Mozambique. The Magic Circle firm is currently seeking a special licence so it can continue to get its fees paid by the Russian bank. Freshfields told RollOnFriday it had no comment. (Update: after widespread outrage and a hard look in the mirror, the firm has decided to drop the bank.)
Kingsley Napley didn't respond, either, which means RollOnFriday cannot confirm whether its brochure inviting wealthy Russians to buy property in the UK "in the shortest time possible with full comfort for the client", remains extant:
But yesterday panning for oligarch gold was fine! So unfair.
Ashurst raised the Ukrainian flag the highest, revealing that it will not take on any new Russian clients, nor carry out any work for existing Russian clients, whether or not they are subject to sanctions. Ashurst's Russian client base is understood to be relatively small, but the move nonetheless represents a lot more than lip service.
The ground is shifting quickly. Simmons & Simmons began the week with a neutral announcement that it was "carefully reviewing" its Russian-related activities and had set up a "New Russian Business Committee", which sounded disconcertingly as if it intended to sweep up the tainted billionaires everyone else was ditching. By Thursday, Simmons had hardened its position, telling RollOnFriday it would "stop advising on matters which support the Russian and Belarusian economies and governments at this time".
Dentons initially told RollOnFriday that, "where appropriate", it would be "terminating our relationship with certain clients". By Thursday afternoon it, too, had toughened its stance, and said it was reviewing “existing work and new business acceptance criteria to ensure compliance with our legal and ethical obligations, firm policies, and our values”, and that as a result, “we have already concluded certain relationships and declined certain instructions”.
Osborne Clarke's stance was unequivocal. Omar Al-Nuaimi, Osborne Clarke's International CEO, told RollOnFriday that the firm "is united in its support for the people of Ukraine and deplores the use of violence, the violation of international law and the disregard for Ukraine's sovereignty and independence". He said OC was working with humanitarian organisations to offer support via donations and volunteering efforts, and that "we will not act for any individuals or organisations that are subject to sanctions or take on new clients or matters which are inconsistent with our support for Ukraine and its people".
"This will result in our not taking on new clients that are owned by Russian or Belarusian individuals, corporations or by their governments, for the time being. We are evaluating all matters where we are already engaged that are linked to Russia and Belarus. We will continue to support existing clients that are seeking to exit the Russian market, where it feels right to do so", he said.
Businesses with an office in Moscow faced a trickier calculation. One firm told RollOnFriday that it was limited in what it could say and do publicly by its concern that Putin could target its Moscow staff.
That was Norton Rose Fulbright's defence when a memo, leaked to The Lawyer, was characterised as a warning to its people not to speak out against the conflict.
If NRF was seeking to keep a lid on staff sentiments, its effort backfired when Shearman & Shearman’s Global Managing Partner, George Casey, wrote on LinkedIn, "To my friends at Norton Rose Fulbright - are you serious?! In this defining moment for humanity, which side of history are you choosing?".
NRF's chair in Canada, Walied Soliman, broke ranks and replied, "I want to be absolutely clear: we stand with the people of Ukraine. Period. I encourage all of our partners and colleagues to speak out. No other position on this crisis is acceptable and is completely disavowed".
The uproar, which included NRF's German COO publicly siding with Soliman, compelled NRF's global chief executive, Gerard Pecht, to publish a response clarifying that "Norton Rose Fulbright’s leadership unequivocally stands with the people of Ukraine and against the invasion of their country by Russia".
He said the firm was making "appropriate adjustments to comply with all sanctions and new laws, which will result in us ending certain of our client relationships".
DLA Piper, while mindful of its staff in Moscow, issued a heartfelt message. "We have watched in dismay and disbelief at the invasion of Ukraine by Russia", a spokesperson told RollOnFriday. "We stand with the people of Ukraine and our thoughts are with them and all those in the region, and beyond, who are affected by this tragedy".
The firm said it was providing support to its people and their families "wherever we can", and "urgently reviewing all Russia-related client engagements to ensure we do not act in a way that conflicts with our values".
Herbert Smith Freehills took a similar position. "We have been shocked and deeply saddened by what continues to unfold in Ukraine", the firm told RollOnFriday, emphasising that "our first immediate concern is looking after our Ukrainian and Russian colleagues". HSF said its Moscow office remained open, but the "rapidly changing" landscape "will include our ceasing to act for certain of our Russian clients and on certain Russia-related work".
Allen & Overy made its anti-Kremlin sentiments extremely clear in a statement posted on LinkedIn. "We have been deeply shocked by the increasingly tragic scenes we are now seeing every day, as Russia’s military invasion of Ukraine causes ever greater damage and a growing humanitarian crisis", said the Magic Circle firm. "We have been very moved by the stories we have heard from the people in Ukraine, who have been put in such a horrific position by this unlawful invasion", said the firm.
A&O continued that it "supports governments around the world in their response to this senseless invasion and condemns Russia’s actions", and confirmed that it was "reviewing our Russia-related portfolio" and as a result "will refuse new instructions and stop all Russia-linked work that goes against our values".
Some critics argued that firms should refrain from voicing their opinions on world events, or choosing their clients accordingly. "It’s the job of solicitors to represent their clients, whoever they may be", said Law Society President I. Stephanie Boyce. "This is how the public can be confident they live in a country that respects the rule of law - unlike Putin’s tyrannical regime", she said, although others applauded firms for squeezing the oligarchs.
Stephenson Harwood was way ahead of the pack. It enraged Putin and his cronies by acting for shareholders in the bankrupt oil company Yukos when they sued Russia, and was consequently blackballed by the regime. "You may know we acted on one of the largest cases against the Russian state, so we're not exposed in the same ways as many City law firms in acting for, or representing, Russian state-owned businesses or Putin-linked oligarchs", a Stephenson Harwood spokesperson told RollOnFriday.
Kennedys was also one step ahead. It decided last Autumn to begin closing its Moscow office, because, said Senior Partner Nick Thomas, "We were uncomfortable with the direction the country was taking".
A few other firms contacted by RollOnFriday were also able to say with some degree of satisfaction that they didn't have any Russian clients at all, so had no exposure. Those included Shearman & Sterling, McDermott Will & Emery, Gateley, and Winckworth Sherwood.
Other firms braved the potential fallout from displeasing Mad Vlad and confirmed they would drop clients linked to his regime. White & Case, which has an office in Moscow, said it was reviewing its Russian and Belarusian clients "and taking steps to exit some representations in accordance with applicable rules of professional responsibility". White & Case's Moscow office remains open, although the firm will "continue to closely monitor this rapidly evolving situation".
Linklaters also has a Moscow office and said that it was working to "ensure the safety and support of colleagues and their families", but was reviewing all of its Russia-related business. Links said the war was "deeply distressing and our thoughts are with the Ukrainian people".
Baker Botts risked Putin's wrath with an unambiguous condemnation of the Russian leader's warmongering. "We condemn the invasion of Ukraine, and we hope for a cessation of hostilities at the earliest moment", said a spokesperson for the US firm. It currently has an office in Moscow, but perhaps not for long. A spokesperson said the future of its work in Russia depended upon "serious ethical, moral and legal considerations", and it would be "working directly with clients on any necessary transitions". In the meantime, "protecting and supporting the people of our Moscow office remains a top priority", he said.
Some firms took a more traditional approach and declined to condemn the war, or refer to it. "As with most multinational organizations operating in the region, we have been closely coordinating to navigate the complexities of the situation", said a spokesperson for BCLP. "We are adapting to comply with applicable sanctions and responding as required in the circumstances. Due to confidentiality, we are not able to share more", he added.
Several firms did share more about their intentions. Sidley Austin said it had already dropped VTB Group after the Russian bank was subjected to US sanctions, while Baker McKenzie confirmed that ensuring its Russia-related work aligned with sanctions "will mean in some cases exiting relationships completely".
A spokesperson for Hogan Lovells said that as sanctions evolved, it "may mean ceasing work where appropriate", adding that, "our thoughts are with all those people affected by the situation in Ukraine, including many of our own colleagues who have relatives in the region".
Pinsent Masons said the firm didn't represent any Putin-linked oligarchs, but it was reviewing the "small number of existing mandates that involve Russian entities" to "determine whether we should continue to discharge our retainers".
"As you would you expect, our primary focus at this time is supporting those of our colleagues who have friends and family affected by the tragedy that is unfolding in Ukraine", said Pinsents.
Slaughter and May is also understood to have minimal exposure to Russian clients, but said it would "continue to review our position to ensure we comply fully with sanctions applied to Russian entities and individuals". A spokesperson for Womble Bond Dickinson told RollOnFriday it had the usual anti-money laundering checks in place, but was carrying out further searches to identify "any links" between its clients and the Putin regime.
Clyde & Co is in the unique position of once having had a Gazprom board member as the head of its affiliated office in Russia, who also taught Putin law at St Petersburg University. A spokesperson for Clydes said it was "ensuring that our portfolio of work complies with all applicable sanctions regulations and our professional and ethical responsibilities". He added that, "needless to say, our thoughts are with the Ukrainian people and our colleagues who have family in the country".
Campaigners have long argued that the current money-laundering requirements have failed to prevent dirty Russian money washing through UK law, and some accused firms of not going far enough in their statements about the current crisis. Activist Bill Browder chastised Linklaters, which has acted for oligarch Oleg Deripaska, for not explicitly condemning the invasion. "Greedy sc..bags! If firms like BP are ready to divest from Rosneft, surely a law firm could drop their Putin regime clients. Incomprehensible", he posted on Twitter.
At least Linklaters said something. Several firms understood to have oligarchs and Russian state businesses on their books were conspicuously silent. Skadden, Quinn, CMS (update: see below), Akin Gump, Mishcon de Reya and Fieldfisher all failed to respond to requests for comment or declined to comment, as did Macfarlanes and Clifford Chance (update: see below). Sullivan & Cromwell said simply, "This is not something we can comment on right now".
Update: On Friday, Eversheds Sutherland told RollOnFriday in a statement that it was making an "initial donation of £200,000" to the International Rescue Committee, "and further donations to local charities in CEE countries".
It said, "the escalating conflict in Ukraine following military action is deeply troubling and we hope that there will be a swift and peaceful resolution. Respecting and protecting the rule of law lies at the heart of what we do as a business and what we, as lawyers and business professionals, believe in. Events of the past week have been truly shocking and, as a firm, we stand with the people of Ukraine and all those who are impacted".
The firm is reviewing its existing client work, but said that although it has work which "is centred on advising multinational clients on their affairs relating to or in Russia", it was not acting for the Russian government or Russian state-controlled entities, "nor are we acting for oligarchs".
And, the firm added, "through our internal processes and controls, we are alerted to any requests for advice from Russian entities which we intend to decline".
Update 2: Clifford Chance also got in touch on Friday to stake out its position:
"We are shocked and appalled by the continuing and increasing Russian military aggression in #Ukraine and the resulting human suffering in Ukraine and the surrounding countries", said the firm in a statement. "We stand together in condemning the invasion which is a clear and blatant violation of international law and the UN Charter. We strongly support the rights of the government and the people of Ukraine,"
"We are united with the governments and fellow members of the legal and wider business community calling for an immediate cessation of hostilities and a withdrawal of all Russian forces from Ukraine in compliance with international law", continued Clifford Chance.
It said that, in support of those objectives, "we will not accept new mandates from any Russian state entity, Russian state-owned enterprises or individuals identified as having close connections to President Putin".
CC said it would also "review all existing and new mandates relating to Russia, or where there is a connection to Russia, to ensure that our work remains consistent not only with the letter and the spirit of the international sanctions but also with our responsible business principles and values".
"We always prioritise the safety, security and wellbeing of our people wherever they may be in the world. In particular, we stand in solidarity with both our Ukrainian and Russian colleagues across our offices, our many colleagues and former colleagues in the region, and those with close connections to the people of Ukraine and Russia. These are distressing and emotional times for many, and we commit to help and support wherever we can", the Magic Circle firm said.
Update 3: Also on Friday afternoon, CMS produced a statement which did not mince words. “We strongly condemn the brutal and unlawful Russian invasion of Ukraine”, it said. “We stand with the people of Ukraine and continue to be inspired by their bravery and resilience in the face of unspeakable aggression”.
CMS said that its “utmost priority has been to ensure the safety and wellbeing of our colleagues and their families in Ukraine”, and “Thankfully, all are currently safe and accounted for”.
The firm addressed some of the complexities of balancing an ethical response with the expectations of the right to legal representation. It said, “We are mindful that as lawyers, we have a role in supporting the rule of law and access to justice, principles that should be valued and supported in any democratic society”. But the situation, with civilians being murdered and the shelling of a nuclear power plant, represented exceptional circumstance. “However, due to the gravity of the current situation, the firm shall not, for now, accept new instructions from Russian based entities or from any individuals with a connection to the Russian Government (wherever they are based)”, said CMS.
The firm’s continuing presence in Moscow is also now in question. “We will continue to act professionally and are undertaking a review of current work, to ensure that the firm remains compliant with international sanctions and its principles and values. The future of the Moscow office is also under critical review”, said the firm.