Should Big Law Firms Take a Stand on Social Issues?

April 13, 2016, 6:41 PM

On Tuesday, Deutsche Bank AG announced that it would freeze expansion plans in North Carolina after the state passed a law that lifts protections based on sexual orientation.

The development prompted us to ask: Would a law firm ever do such a thing?

If the past is any precedent, the chances are unlikely. Law firms haven’t always proven to be the most socially conscious organizations. For example, U.S. law firms with offices in China have remained silent, despite a Chinese government crackdown that led to the detainment of human rights lawyers .

Earlier this year, after bar associations and legal groups issued letters urging the Chinese government to release imprisoned lawyers and disclose the whereabouts of the disappeared, our own Blake Edwards reached out to 16 big U.S. law firms for comment.

None of them said a thing, except for a few decline to comments.

The firms contacted all have lawyers staffed in China: Dentons, Paul Hastings, Wilson Sonsini, Skadden, Arps, Slate, Meagher & Flom, Shearman & Sterling, Latham & Watkins, Baker & McKenzie, DLA Piper, Jones Day, White & Case, O’Melveny & Myers, Orrick Herrington & Sutcliffe, Morrison & Foerster, Hogan Lovells, Mayer Brown, and Sidley Austin.

“Law firms who are competing for business related to China feel unable to speak out, because they’ve got their rice bowls to protect. So they leave it to bar associations and governments,” said Jerome Cohen, a professor at NYU Law School, who has represented Chinese activists, including Chen Guangcheng.

Asked whether law firms that do business in China have a duty to speak up on behalf of their fellow lawyers, Terence Halliday, a research professor with the American Bar Foundation, and a principle author of the letter, offered a polite yes.

“I would like to think that all lawyers, insofar as they’re committed to the values of the rule of law, need to find ways to express those moral values,” he said.

The same might be said for social issues anywhere, be it in China or in North Carolina. But money matters and it doesn’t pay for law firms to take a stand, said legal observers.

Still, individual partners often act on their own volition in political and social issues. Above the Law reported earlier this year that a controversy at Jones Day erupted when some of the firm’s partners held a Donald Trump campaign event. A Jones Day spokesman did not immediately respond to a request for comment.

Meanwhile, a special counsel at Jones Walker , Andy Gipson, supported the Mississippi House Bill 1523 , which allows business owners to refuse service to LGBT people based on religious beliefs. Bill Hines, managing partner of Jones Walker, told Big Law Business that “Gipson’s outside activities as a Mississippi legislator are unrelated to our firm and we are not involved.”

“Jones Walker is committed to fostering a diverse workplace in all of our offices, and we have no further comment,” said Hines. Gipson did not respond to a request for comment.

Peter Zeughauser, a law firm consultant who works with firm leadership on managing their business, said that generally speaking, law firms tend not to take a stance on social issues because doing so could strain important relationships.

“Law firms are going to worry that their clients are going to be on both sides — some clients may support that legislation,” said Zeughauser. “Clients might think it’s good, so they think, ‘Why should we get in the middle of that? Why should we take a stand?’ Even within the firm, there may be, among partners, different views on some of these issues. So what I would say is, firms are often less willing to take a stand on social issues because there may not be a consensus among their partners and among their clients.”

As far as Deutsche Bank goes, its general counsel Steven Reich declined to comment on what kind of lessons law firms might take away from the bank’s move. According to Bloomberg News, the bank is putting on hold its expansion of adding 250 jobs to 900 existing positions at a software development center in Cary, just west of Raleigh. The announcement came after the state’s decision last month to overturn protections for LGBT residents in some cities.

“In an instance like this, where the discriminatory provisions within the statute have been widely criticized as unconstitutional, you’d hope that those issues wouldn’t keep a firm from joining the business community in taking a stand,” said Zeughauser.

We reached out to two big law firms in North Carolina — Polsinelli and Winston & Strawn. We haven’t heard back from them if they are planning on doing anything in response to the law, but we’ll update this post if they do.

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