Russia’s invasion of Ukraine has prompted many firms to drop clients and review how they take on new work. Is this a watershed moment for client instructions?

The unprecedented exodus of western legal practices from Russia could lead to a drastic change of approach towards allegedly questionable clients, as one international firm told the Gazette that ‘everything is under review’ after its recent departure from Moscow.

Russia’s invasion of Ukraine has prompted some of the world’s largest law firms to leave Russia, as well as drop certain clients and announce reviews of how they take on new instructions.

Firms shifted from expressions of sympathy with the people of Ukraine to decisive action in a matter of days, amid fierce political and media scrutiny.

So, what now? What will a law firm with a substantial presence in China do if the country were to, for example, invade Taiwan? What should an international firm with offices in Saudi Arabia do after the kingdom executes 81 people in a single day?

And what about other ‘hot button’ ethical issues: will – or should – firms continue to act for, say, fossil fuel producers?

Many sector observers expect client selection to become the most important issue facing leading firms’ management committees in the coming years. So the Gazette asked a clutch of top-25 and other firms whether the invasion of Ukraine – and their response to it – has changed their approach to accepting new instructions.

The vast majority were, perhaps unsurprisingly, tight-lipped: some declined to comment, others referred to previous public statements, and most of the rest did not reply.

Some who did respond would not do so on the record, while emphasising their legal and professional obligations, and commitment to running a responsible business.

Hogan Lovells, which did respond, said: ‘We continue to review our work to ensure that it is at all times compliant with our professional and ethical obligations. This involves refusing to take on work which does not conform to our values.’

'If lawyers are doing something now that in three years’ time will be unacceptable, they have to start thinking about that and start planning ahead'

Iain Miller, Kingsley Napley

Allen & Overy said it has ‘a rigorous business-acceptance process for all client matters which includes checks for sanctions and affiliation with sanctioned persons’.

Freshfields Bruckhaus Deringer said: ‘We have robust processes in place to assess all new clients and mandates, which take into account multiple factors, including compliance with our legal, regulatory and professional obligations. Our decisions are informed by our purpose and values as a firm and in consideration of sustainability and climate change.’

However, perhaps most significantly, a spokesperson for an international firm which shut its Moscow office said: ‘Everything is under review and we are working through all of these things.’

A shift seems to be occurring, albeit – for now – behind the scenes. But Iain Miller, partner at Kingsley Napley and specialist in legal ethics, said at an event last week there is a growing sense that ‘lawyers and their clients are not in separate spheres and the clients reflect upon the law firm.

‘If lawyers are doing something now that in three years’ time will be unacceptable, they have to start thinking about that and start planning ahead,’ he warned.

‘We have now reached the stage where a law firm can’t simply say “I have done all my money-laundering checks and it is perfectly legal for me to act for this client”.’

Referring to the Russian clients that firms are now dropping, Miller said: ‘These are clients that the government, five years ago, would have encouraged people to take on and now they are asking “why are you acting for them?”’

Professor Richard Moorhead, a legal ethics specialist at the University of Exeter, said at the same event: ‘Firms are now much more financially focused and much more unstable because of that. It drives a higher appetite for risk with more emphasis on making money. At the moment, we are seeing people take a step back and say, reputationally, this is way too hot to handle.’

Of course there are other, discrete but still nevertheless pressing ‘moral’ issues affecting client selection. For example, ahead of last year’s Cop26 summit in Glasgow, the Law Society issued a climate resolution urging solicitors to help take the lead in responding to the climate crisis. Chancery Lane said it ‘aims to provide the profession with guidance on how to take climate change into consideration when advising clients and providing legal services’.

It is not difficult to imagine that such guidance could now be much more widely drawn, should the profession so wish. The direction of travel is clear.

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