Last time I checked, Big Law was a paragon of capitalism. As much as it talks a good line about social justice and helping the needy, we all know its raison d'être: making money—which it’s done quite spectacularly.
As any Big Law aficionado knows, partners at major firms have been making out like bandits. Last year, the profits per equity partner in the Am Law 100 soared to $2.66 million. And partners at some firms took home substantially more (Wachtell Lipton, Davis Polk, and Kirkland & Ellis equity partners each topped $7 million).
I’m not saying you can’t make oodles of money and be a socialist at heart. But members of Big Law? I’m not feeling it.
Yet, some right wing politicians and officials are singling out Big Law as if it’s pushing some sort of crazy progressive agenda that’s out to destroy capitalism and the American way of life.
Recently, five Republican senators—Chuck Grassley of Iowa, Marco Rubio of Florida, Tom Cotton of Arkansas, Michael Lee of Utah, and Marsha Blackburn of Tennessee—wrote to at least 30 major law firms about the advice they give clients on environment, social and governance (ESG) efforts.
Specifically, they told firms they had a “duty” to apprise clients of the risks of “participating in climate cartels and other ill-advised ESG schemes,” lest Congress unleash “its oversight powers to scrutinize the institutionalized antitrust violations being committed in the name of ESG.”
What’s more, the senators called ESG part of “the collusive effort to restrict the supply of coal, oil, and gas, which is driving up energy costs across the globe and empowering America’s adversaries abroad.”
“Climate cartels,” “ESG schemes,” and “collusive effort”—oh, my. Who knew proponents of ESG and the mafia have so much in common?
And how mystifying that law firms would give counsel that could destroy the energy sector when many count Big Oil as clients. Guess you can never underestimate the power of Marxism.
‘Tiny Nugget of Truth’
Conservatives are also attacking the “S” factor in ESG, particularly abortion coverage in the post-Roe world.
Recently, the Equal Employment Opportunity Commission’s Andrea Lucas, a Trump-appointed commissioner, initiated discrimination investigations against companies that provide abortion travel expenses for employees—as first reported by Bloomberg Law.
That was fulfilling a threat, it seems, made by former EEOC general counsel Sharon Fast Gustafson, another Trump appointee, who wrote to companies that they might be subject to such actions. Though Gustafson is no longer employed by the government, she invoked her former EEOC status in her letter, as if she still carried enforcement authority.
And let’s not forget that in July the Texas Freedom Caucus targeted Sidley Austin for its coverage of out-of-state abortion services. In a letter to Sidley management committee chair Yvette Ostolaza, the Caucus accused the firm of funding employees to “murder their unborn children.”
Every right-wing politician and his mother seem to be going after Big Law and their clients, dragging them into the crosshairs of America’s cultural wars. Just a few days ago, star litigator Paul Clement jumped on the bandwagon, reported the ABA Journal, lamenting at a Federalist Society gathering: “Big law firms are becoming increasingly woke because their clients are becoming increasingly woke.”
So much chest beating on wokeism, but what’s the point?
“I think this is mostly political pageantry and grandstanding, but there’s a tiny nugget of truth, as with much of the current noise over ‘woke capitalism,’” said Alison Taylor, an ESG expert who heads the Ethical System program at New York University Stern School of Business.
“The kernel of truth is that there is an emerging antitrust argument about collusion and cooperation on ESG issues by companies, or at least any meaningful effort that might affect pricing.”
At the moment, antitrust violations are more theoretical than real. “There is far less meaningful collaboration—by meaningful, I mean with genuine commercial consequences—going on in this area than you might think,” Taylor added. “Most [ESG] pledges are such empty virtue signaling.”
What those threats on the right might do, though, is give cover to management that’s hostile or just indifferent to measures like ESG or reproductive rights in the first place. “Corporations that don’t want to move forward with climate initiatives will use this as a weapon,” former Kirkland & Ellis partner Steven Harper told me. “It allows lawyers, who are cautious by nature, to advise clients to hold back.”
But can lawyers tell clients to simply duck ESG issues?
“Every big business at least pays lip service to ESG today, even Big Oil,” Taylor said. “Companies need advice ... not least because issues like climate change and human rights are becoming much more regulated, especially by the EU, but also by the US.”
Much of the advice, she explained, is aimed at mitigating litigation risk. “You are much more likely to get sued in class actions over climate change,” she said, “or for undermining your stated commitments to human rights.”
So what do conservative politicians, officials, and cultural warriors expect to achieve with these warnings to Big Law and their clients?
“I doubt any law firm would feel constrained to alter any of their professional standards or practices in light of the letter,” said Lawrence Cunningham, a professor at George Washington University Law School, about the missive from the five senators written just days before the midterm elections.
“In substance, the letter is innocuous—redundantly advising law firms of what law firms would already know in terms of counseling clients to avoid violating the law.”
Some Big Law partners seem defiant. One partner whose firm was targeted by the five senators called the letter a “political stunt” that would have “no impact on how we handle our ESG work.”
The Fabulous Five seemed cocksure that voters would share their hostility toward ESG, which they called a “movement” that “attempts to weaponize corporations to reshape society in ways that Americans would never endorse at the ballot box.”
Whatever psychological leverage the right wing had over Big Law seems to have evaporated following the midterms, now that it’s clear Republicans won’t control the Senate.
But there’s a line in that now-infamous letter that Big Law might not find so offensive: “Businesses would certainly be wise to lawyer up before undertaking ESG initiatives.”
Lawyer up? Why that’s music to Big Law.