Why Law Firms Can’t Negotiate Their Way Out of Trump’s Ire

Welcome back to the Big Law Business column. I’m Roy Strom, and today we look at possible strategies to defend against executive orders targeting law firms. Sign up for Business & Practice, a free morning newsletter from Bloomberg Law. Programming Note: Big Law Business will be off next week.

President Donald Trump’s beefs with Big Law clearly go beyond the three firms he is already seeking to punish.

His rhetoric in the March 14 executive order targeting Paul Weiss is broader than just attacking one law firm. The first sentence reads as an indictment of all “global law firms,” which have for years “played an outsized role in undermining the judicial process and in the destruction of bedrock American principles.”

If you take former Trump adviser Steve Bannon at his word, the objective is to bankrupt certain firms.

“They’re not going to be walking around making four and five, six million bucks a year, because he’s going to put those law firms out of business,” Bannon said last week. “Let me repeat this. There’s major law firms in Washington DC, and what we are trying to do is put you out of business and bankrupt you. Just so you understand it.”

So, it seems more likely than not that more global law firms will find themselves facing some type of punishment from the White House. Law firm leaders, then, must consider how to respond.

Generally, there are three options.

Firms can fight Trump. Perkins Coie has sued the administration, calling Trump’s order targeting the firm an “affront to the Constitution.”

They can remain silent, hoping the storm will blow over. That seems to be the approach that the first firm Trump targeted, Covington & Burling, is taking so far.

Finally, firms could seek some kind of proactive negotiation with Trump.

The third option may sound unpalatable to lawyers who are ethically responsible to more than just their bottom lines. But it is what executives in other businesses have done when Trump’s policies have implicated them or their industry.

The president got upset that Apple Inc. produces products overseas. So Trump said company CEO Tim Cook pledged to spend $500 billion domestically over the next four years and hire 20,000 workers.

The president complained about social media companies discriminating against conservative views. So Meta Platforms Inc. CEO Mark Zuckerberg headed to Mar-a-Lago and scrapped the company’s US fact-checking operation.

These deals give the dealmaker-in-chief a policy victory—perceived or real. For law firm leaders, this quid pro quo raises a simple, uncomfortable question: What can law firms offer the White House?

But it’s not clear Trump wants anything these individual firms could offer—or that managing partners would be willing or able to negotiate.

“I’ve seen no indications that Trump has some kind of negotiation in mind,” said Walter Olson, a senior fellow at the Cato Institute’s Robert A. Levy Center for Constitutional Studies. “And that raises the question: Is he expecting or hoping for not a negotiated settlement, but rather the kind of point he would make if he actually did succeed in destroying one of these firms?”

Perhaps Trump would respond well to flattery or some form of an apology. That has worked in other situations. ABC News and anchor George Stephanopoulos settled with Trump late last year, and the network agreed to apologize.

Still, a similar approach would likely be unpalatable to any law firm leader. Full capitulation would carry major risks to a firm’s culture. Associates are already clamoring for leaders to speak out forcefully against Trump’s attacks. An apology would also likely affect a firm’s reputation with clients.

It is clear Trump didn’t want lawyers representing his opponents or opposing his administration in court. But an offer by a specific firm to not do such work going forward—or to jettison lawyers who had done it in the past—wouldn’t accomplish much for the president.

There are still a hundred other law firms who could take up those cases. Lawyers who have fought Trump in court, freed from their law firms, would face less resistance from colleagues or a broader swathe of clients to pursue cases the president may not want good lawyers handling.

Such an offer would also violate the role law firms are meant to take representing clients with viewpoints adverse to the federal government’s, said Stephen Gillers, a professor emeritus at NYU Law School.

“There is no negotiating position firms can take, keeping in that tradition of American law firms and under the rules of professional conduct, that could satisfy Trump,” Gillers said. “They just have to stare him down.”

So as firms face an existential risk, they are left with few good options.

Perhaps the most important strategy a law firm leader targeted by Trump will need to employ is one focused on keeping clients and partners in the fold. There is where the most important deals will need to be struck.

“The departure of a few partners is not a death sentence, and even spiraling departures is not a death sentence,” said John Morley, a Yale Law professor who’s written on how law firms fail. “You can survive it, but it will be a challenge.”

Worth Your Time

On Kirkland & Ellis: Kirkland & Ellis hit new revenue and profits records last year, with revenue reaching $8.8 billion, up 22% from the prior year.

On Cleary: Cleary Gottlieb acquired Springbok AI, bringing aboard the generative AI-focused legal technology company’s founder and a 10-person team. It’s a rare law firm acquisition of a legal tech company and comes as law firms are grappling with how to build or buy new AI capabilities.

On Irell: An East Texas federal court’s special investigator recommended sanctions against Irell & Manella based on the actions of two patent litigators, including for using a “doctored document” while deposing a witness, Michael Shapiro reports.

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