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Like CEOs at Davos, Law Firm Leaders Face Climate Quandaries Too

Jan. 23, 2020, 9:50 AM

Welcome back to the Big Law Business column on the changing legal marketplace written by me, Roy Strom. This week, we look at how Big Law firms are positioning themselves to respond to client demand for climate change-related advice.

World leaders convened in Davos, Switzerland, this week for the annual Climate Change Conference. Pardon me, it was actually the World Economic Forum.

It was easy to view the event through a climate change lens, though. President Trump provided a foil to teenage climate change activist Greta Thunberg and her words of warning. Starbucks unveiled a dairy-lite future to cut its carbon footprint. And Coca-Cola’s CEO declared the company will continue to give consumers the plastic bottles they like despite environmentalists’ calls to ban single-use plastics.

All this, just a week after Larry Fink, CEO of one of the world’s largest investment firms, BlackRock, wrote in a letter that climate change is prepared to unleash a “fundamental reshaping of finance.”

From a Big Law perspective, the Davos conference attracted at least one familiar face, Baker McKenzie’s chairman Milton Cheng. This make sense, as his firm has the highest rated global climate change practice, according to Chambers and Partners.

Davos highlights an urgent business question for Big Law leaders. As investors, activists, and politicians increasingly pressure businesses to reduce their carbon footprint, how do firms plan to respond to climate change? I don’t mean partners printing out fewer e-mails (though that would certainly be nice). I mean from a business standpoint.

Big Law’s emerging strategy has mostly involved launching “climate change” branded practices, which are as varied as the number of firms who have launched them. Some are made up of environmental lawyers. Some are rebranded energy industry practices.

“Pick a big firm website,” said Lynn Grayson, a lawyer at Nijman Franzetti in Chicago and the former chair of Jenner & Block’s environmental practice. “It’s like: Climate change? Yes, we do it.”

One of the challenges climate change presents for Big Law firms is its interdisciplinary nature. “Climate law” is still very much a work in progress, and there isn’t one specific industry that will be impacted by climate change.

That presents both management and marketing problems. Firms must decide which lawyers play on the climate change team, and how they market those services to clients.

Take Hunton Andrews Kurth, for instance, which has a top-ranked climate change practice in the U.S. by Chambers. The firm’s bedrock experience in the area is largely its environmental practice, which has significant experience with the Clean Air Act. The firm says it has “the largest air practice” in the country with more than 33 “air-focused lawyers.”

Partner Allison Wood represented clients before the U.S. Supreme Court in three cases debating, as early as 2006, whether and how the Clean Air Act allows the Environmental Protection Agency to regulate carbon emissions. (It does, but not so much for car emissions, and it precludes lawsuits to stop carbon emissions.)

But recent developments like the BlackRock letter show how broad the practice area has become, said Shannon Broome, a San Francisco-based Hunton Andrews Kurth partner who has represented oil and gas companies in climate-nuisance cases.

“It did start as a germ in environmental law, but now all departments of Big Law are implicated,” Broome said. “What is Big Law thinking? They should be thinking big.”

Here is a far-from-exhaustive list of ways in which Big Law lawyers said in interviews climate change will impact their practices.

  • Securities law practices will respond as regulators or investors push companies to disclose climate-based risks to shareholders.
  • Infrastructure practices will be implicated as government projects respond to environmental change.
  • Lobbying practices will advocate to preserve the status quo or fight it.
  • Litigation practices will continue to represent clients named in environmental suits.
  • Carbon capture technologies will create a new business for corporate practices.
  • Antitrust practices will be consulted as industry competitors feel compelled to work together to make carbon-free product sourcing less costly.

One way to respond to what is probably an endless list is the approach taken by Freshfields Bruckhaus Deringer.

In May, the firm named Timothy Wilkins its first global partner for client sustainability. A 25-year M&A lawyer, Wilkins still has a client-facing role advising on climate and sustainability. He also communicates internally with the firm’s relationship partners, making sure they are aware of these risks and the services the firm offers. He said the firm is tailoring its sustainability messages to the concerns that individual industries express.

“We basically appreciated that climate change, human rights, sustainable finance, and corporate governance have now moved into the core strategic areas for our clients,” Wilkins said. “And we realized that we need to find a way to marshal the full resources of the firm across sector groups, practice groups.”

As Davos kicked off, the World Economic Forum released a survey of its members that said the top five risks to the world economy were all environment-related, including extreme weather and climate action failure. It was the first time in the survey’s 15-year history that things like cyberattacks, terror attacks, unemployment, interstate conflict or asset price collapse didn’t crack the top five.

Law firms respond to clients. If clients are saying climate change is the biggest risk the world faces, expect law firms to sell mitigation advice—even if they’re still figuring out how exactly to do that.

Worth Your Time

On Ethics: New York state’s legal ethics rules do not allow out-of-state law firms to operate in New York under “trade names,” my colleague Melissa Heelan Stanzione reports. But, hey, at least New York lawyers working on a contingent fee can charge interest in some cases.

On Video: Nothing is safe from innovation, not even CLEs, as Orrick Herrington & Sutcliffe proved last week. The firm has launched a partnership that so far has produced 40 “conversation-style” videos, many of which are for continuing legal education credit.

On New Law: Consulting and marketing firm Baretz+Brunelle wants to help law firms and other market players evolve into more modern businesses. It hired industry veterans Brad Blickstein and Beatrice Seravello to launch a “NewLaw” practice.

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

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

To contact the editors responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloomberglaw.com