Lawyers’ Obligations to Russian Clients Could Become Untenable

As the horrors of the war in Ukraine unfold, major U.S. law firms are being scrutinized for their ties to individuals and entities linked to Russia.

We don’t know who all of a given firm’s clients are, never mind the scope and nature of any representation, but we can glean enough from the public record to know there are plenty of firms that need to revisit their relationships with Russia-based clients.

Harvard, Stanford, and Yale Law Schools have been tracking what major U.S. and U.K. law firms have stated publicly about their intentions for Russia-based clients, presumably to put some pressure on those that would continue to indirectly fund Vladimir Putin’s Ukraine war effort.

So far, a lot of law firms have refrained from making commitments. Others have hedged, perhaps saying they don’t or won’t represent state-backed entities.

A few firms have said they will cut ties completely.

Wordcloud generated from text of statements made by major U.S. and U.K. law firms about continuing relationships with clients with potential ties to Moscow. Text pulled from statements compiled as part of the Law Firms and Russia Profits tracking project by Harvard, Stanford, and Yale Law Schools.

Photo Credit: Holly Barker via Wordclouds.com

Representing horribly unpopular clients is nothing new and is often done with some degree of pride, but the moral questions presented by Russia’s invasion of Ukraine are of a different order of magnitude.

At a certain point, practical risk, including potentially aggressive enforcement scrutiny, of continued involvement in a matter becomes untenable.

Read More: Law Firms, Corporations Face a New Front in a New Cold War

See Also: YouTube at Risk of Russia Ban After Facebook Deemed Illegal

Even Skadden—which has withstood heat for representing powerful Russian entities and individuals with close ties to Putin in controversial, high-profile matters for the last several years, seemingly without breaking a sweat—appears to be distancing itself from sanctioned entities.

In an internal memo provided to Law.com, the firm said it doesn’t represent any state-backed entities; was terminating its relationship with representation of one sanctioned client, presumably Alfa Bank; and would be “ceasing to provide advice to certain clients who appear likely to become subject to sanctions.”

Most recently, Skadden had represented Alfa Bank in John Doe lawsuits in Palm Beach County, Fla., over allegations that its servers had been communicating with the Trump campaign. Those suits were voluntarily dismissed. This is also the subject of Special Counsel John Durham’s ongoing investigation.

It also represented Petr Aven—who until very recently ran Alfa Bank—in grand jury proceedings conducted as part of Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 presidential campaign.

Professional Obligations

Morality aside, most law firms have tended to focus on professional ethics—those principles of professional conduct that society and disciplinary authorities expect practicing lawyers to observe—in their statements: Continued representation is “untenable,” exits will be consistent with legal and professional “obligations,” and the like.

But what are those obligations?

ABA Model Rule 1.16, which deals with declining or terminating representation, allows a lawyer to withdraw when, among other things, “withdrawal can be accomplished without material adverse effect on the interests of the client.”

It seems like a broad exception, but it depends entirely on how you measure a “material adverse effect” and whether you can cure it by simply refunding the money.

As a practical matter, the exception is pretty narrow, Arthur D. Burger, Chair of Jackson & Campbell’s professional responsibility practice, told me.

Although there isn’t a great deal of published authority, it’s obvious that in most complex matters—assuming the lawyer doesn’t withdraw from the representation almost immediately—there will be some harm to the client’s interests, Burger said.

And under Rule 1.16(c), if a lawyer is counsel of record in a case that’s pending in a matter before a tribunal, then the lawyer has to obtain that tribunal’s permission to terminate the representation.

A more interesting potentially applicable subsection of the model rule is 1.16(b)(4).

That subsection allows withdrawal where “the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement.”

The fact that the provision doesn’t include the phrase “involving lawyer services,” which is present in another exception permitting withdrawal, “makes it very reasonable and probably correct to read it as not being tied to the lawyer’s services,” Burger said.

He said that rule is based on the underlying notion that there’s a risk that a lawyer may be so disgusted by the representation that the lawyer is incapable of serving the client effectively.

Burger said no one was likely to pursue sanctions against a lawyer who ends a client relationship because of the client’s ties to Russia, in any event.

At a certain point even “ethics-types” will say “to hell with it,” Burger said.

“We are talking about potential genocide, millions of families being displaced, and a major insult to the whole nature of international order, the right of sovereignty.”

“We’re not so myopic that we’re looking at the fine print of ethics rules, we’re looking at humanity,” Burger said.

This feature appeared in this week’s Bloomberg Law—Litigation newsletter. Bloomberg Law subscribers may sign up here.