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Firm Power Struggles Are Now Starting in Law School (Corrected)

Oct. 15, 2020, 9:40 AM; Updated: Oct. 15, 2020, 3:32 PM

Welcome back to the Big Law Business column on the changing legal marketplace written by me, Roy Strom. This week, we look at the power dynamic between today’s law firm partners and tomorrow’s employees. Sign up to receive this column in your inbox on Thursday mornings. Programming Note: Big Law Business will be off next week.

Law firms are used to internal power struggles. Countless partners have left their firms due to client conflicts or in protest of management decisions about which side to represent in a particular case.

Sometimes the power dynamic between partners is so obvious there isn’t even a struggle. One of them just leaves to pursue career opportunities elsewhere.

You’ve got a case against the bank that the rainmaker down the hall represents? Best of luck in your future endeavors.

When those kinds of fights happen, it’s usually behind closed doors. Now some of them are being brought out in the sunlight by a group with no direct financial stake in the firm: potential future employees.

A group of law students from top schools says that last week they delivered to Paul Weiss’ headquarters a letter signed by 600 lawyers in training who pledged not to work at the firm while it represents ExxonMobil. The pledge says Paul Weiss’ work enables the company’s “decades-long campaign of deception and misinformation that led us to this moment of climate crisis.”

Law Students for Climate Accountability says Vault 100 firms from 2015 to 2019 handled transactions for the fossil fuel industry worth $1.3 trillion and received $37 million in compensation for fossil fuel industry lobbying.

The group wants to change that by rewarding law firms that do not represent companies it sees as contributing to climate change by creating a grading system for them. Firms including Wilson Sonsini and Cozen O’Connor have already touted their top scores.

Tim Hirschel-Burns, a second year Yale Law student and a leader of the climate accountability group, said he’s been recruiting students from more schools to join the pledge. Hirschel-Burns is timing his outreach to schools with the start of their interview process with firms.

“We know what we’re up against. There are firms making millions and millions of dollars off this,” Hirschel-Burns said in an interview. “But there is a moral element. These firms frame themselves as socially responsible actors.”

Paul Weiss chair Brad Karp said in a statement that the firm was proud of its work successfully defending ExxonMobil against securities fraud claims last year. The firm won a defense verdict on behalf of ExxonMobil in New York state court against claims the company misled investors about the risks of climate change.

“Paul, Weiss is committed to free speech and debate, just as we are committed to the principle that we represent our clients and safeguard the rule of law zealously and to the best of our abilities,” Karp said.

The move by Law Students for Climate Accountability is the second pressure campaign launched in recent years against Big Law by students at prominent law schools. The People’s Parity Project campaigned against firms’ use of mandatory arbitration clauses in employment contracts. The group achieved some notable successes including the elimination of the clauses at Sidley Austin and Kirkland & Ellis.

Students targeting firms for their client base is not new, either. A group of students at Harvard, Yale, New York University and other schools boycotted Covington & Burling in 1985, demanding the firm drop South African Airlines during a broader divestiture campaign of South African companies.

Covington dropped the airline, and a New York Times report said the student movement was “devastating” to the firm’s recruiting efforts.

Targeting lawyers for representing disliked clients usually leads to questions about the profession’s pledge to provide zealous representation even for unpopular causes.

Hirschel-Burns said that tenet is “critically important” when it comes to indigent criminal defendants. Fossil fuel companies, though, have plenty of other lawyers available to them, he said, and the country’s “best lawyers” should decide to not represent them.

“Those services shouldn’t be on offer to a company that already has dozens of lawyers,” he said.

One of my favorite ways to think about how law firms operate comes from a description of how they fall apart.

Yale Law School professor John Morley blames law firms’ structure of partner ownership for the domino-effect failures he calls a “partner run.” One partner leaves, damaging the firm’s profits enough that it makes sense for the next partner to leave. That partner bolts, and somebody else starts thinking about an exit. Pretty soon it all falls down.

But the same dynamic that can cause firms to blow apart is what can keep them together: lawyers choose to stay at firms. And it’s not just money driving that choice. Morley makes the point that since firms have such little ability to tie lawyers together financially, management must prioritize things like friendship, loyalty, or shared values. He calls it “bonding capital.”

The fight against fossil fuel clients pits tomorrow’s employees against today’s partners. It pits financial interests against ideals. It’s a test of bonding capital likely to confront more management teams. There are 26 firms that received an “F” on the climate change scorecard.

“That’s unfortunate considering who has the power in law firms and how urgent climate change is,” Hirschel-Burns said. “You can’t just wait for the associates to become partners.”

Worth Your Time

On Law Firm Finances: My colleague Meghan Tribe has a new data set that shows the 100 largest U.S. law firms’ responses to the coronavirus pandemic. More than half of the 48 firms that instituted pay cuts, furloughs, or layoffs earlier in 2020 have restored pay in part or completely.

On In-House Diversity Goals: HP Inc. Chief Legal Officer Kim Rivera spoke with Ruiqi Chen about how law firms have responded to her pledge to withhold fees from those that don’t achieve diversity goals. Rivera has found outside firms are eager to get into compliance when cash is on the line.

On Lateral Hires: Freshfields continued its U.S. hiring spree, adding former Hogan Lovells antitrust partner Meghan Rissmiller. Holland & Knight snagged a 10-lawyer financial services litigation group from Reed Smith. Davis Polk recruited Uzo Asonye, a veteran federal prosecutor who played a key role in the government’s case against Paul Manafort.

On Cyberattacks: Seyfarth Shaw was hit with a cyberattack that shut down its email system, Jake Holland reports. The firm said it had found “no evidence” that client or firm data was accessed or removed.

That’s it for this week and next week! Thanks for reading and please send me your thoughts, critiques, and tips.

(Corrects Covington & Burling was the law firm boycotted in the 1980s.)

To contact the reporter on this story: Roy Strom in Chicago at rstrom@bloomberglaw.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Chris Opfer at copfer@bloomberglaw.com

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