While some American law firms have been quick to publicize the dropping of Russian clients on government sanctions lists, some firms with offices and people in Russia are reticent to provide any information on their activities—for fear of reprisals against lawyers and staff still in Russia.
The U.S. and other allies Saturday announced they would block access to SWIFT financial messaging by the Russian central bank in response to President Vladimir Putin’s war against Ukraine, marking the third set of sanctions in the past two weeks. The Biden administration on Thursday revealed it was imposing “severe and immediate economic costs” on Russia, including “sweeping” financial sanctions and “stringent” export controls aimed at having a “profound impact” on Russia’s economy, financial system, and access to technology.
American companies are also now banned from doing business with over a dozen Russian companies, including major banks Sberbank, VTB Bank, Otkritie, Sovcombank, Novikombank, Gazprombank and Russian Agricultural Bank.
In response, law firms such as Sidley Austin, Venable and others have made it known that they are dropping these companies from their client roster. However, other law firms with sanctioned clients on their rosters have yet to make such public announcements.
Some law firms have been slower to react, and may not even provide confirmation they have dropped sanctioned clients.
“If we say something like, ‘We’re dropping clients that are Russian,’ that could literally put the 30 to 40 people in our Moscow office who are Russian nationals in harm’s way,” said one Am Law 200 firm spokesperson on the condition of anonymity so that they could speak freely. “We’re obviously looking at this closely, but frankly if these entities are sanctioned, I don’t think we can legally do work for them anyway. So, it’s kind of a moot point.”
Several law firm spokespeople contacted for this article, whose firms have Moscow offices, voiced similar concerns.
“Don’t get me wrong, I think there is something to the symbolism of [publicly dropping sanctioned clients], because it shows Western unity against an aggressive country,” the Am Law 200 firm spokesperson continued. “More than anything, we need to make sure our colleagues in Moscow are safe, and not we’re not putting them in a bad situation. We have had things like this happen before.”
A few years ago, the spokesperson explained, the managing partner of an office in a former Soviet state was mentioned in the press as supporting an anti-Russian move in that country.
“Our colleagues in Moscow were like, ‘Are you crazy? We could get killed,’” the spokesperson said.
According to ALM’s Legal Compass, roughly 20 Am Law 200 firms have offices in Russia, including Am Law 25 firms Baker McKenzie, DLA Piper, Hogan Lovells, Jones Day, King & Spalding, Latham & Watkins, Morgan, Lewis & Bockius, Norton Rose Fulbright, and Skadden, Arps, Slate, Meagher & Flom.
“Look at the government you’re dealing with,” said an Am Law 100 firm spokesperson. “And Putin and what he’s capable of. Would you really be surprised if something nefarious happened, given that the man just invaded a sovereign state?”
One lawyer at an Am Law 200 firm that spent many years in Moscow said the threat to national staff from the firm putting a step wrong is real.
“A foreigner can get on a plane and get out—most of the time—but the national staff are stuck. They have a family there,” the lawyer said. “The Russian government has all sorts of ways to pressure people. For instance, if a partner at a Moscow firm came out against the invasion of Ukraine, they might get a call telling them that their kids were drafted into the army. I’ve seen that happen.”
At least one lawyer contacted for this story, however, felt that law firm reticence to comment publicly was less about staff safety and more about business.
“The real power the law firms have is the sensitive information they possess—and that’s sitting on a server in Nashville or somewhere stateside, not a briefcase in a Moscow office,” said a lawyer from an Am Law 100 firm. “So, what would be the point of harassing or leaning on some lawyer who works in Moscow? Where does it get them? Not speaking out is about keeping Russian clients happy. And keeping the money coming in the door.”