Law firms have traditionally been reluctant to draw ethical lines in the sand. The profession prides itself on the premise that everyone is entitled to legal representation. But recent events have forced them to start taking an ethical stance where they might not have previously.
Now, research by Law.com International reveals just how seriously they are taking it—and why.
Russia’s invasion of Ukraine sped up a debate that was already starting to take place. Most Big Law firms cut ties with Russian clients because they were “not consistent with our values”. Nevertheless, there is strong evidence of law firms acting for clients that have been strongly censured for their involvement in controversies such as environmental disasters, human rights abuses, contraventions of the rule of law, and forced labour.
But driven by a rising chorus among younger lawyers, an enhanced focus on environmental, social and governance issues, as well as the reputational fallout from acting for certain clients, firms are now increasingly considering other areas where they may want to take an ethical stand, and perhaps even deny counsel. Many have started drawing up more robust ‘ethical’ policies, and, coupled with increasing public scrutiny, this is prompting firms to take a more critical eye to sectors such as gambling and defence, to mandates that could pose a risk to human rights, and child or animal welfare.
Now, a Law.com International survey of more than 30 major law firms finds that many are declining taking instructions for purely ethical reasons. So what types of work are law firms most likely to turn down, and what sectors are being scrutinised by law firm leaders most closely?
Law firms taking a stand
The survey asked respondents to provide insight into how they make decisions along ethical lines, be they human, political or environmental concerns. 25 respondent firms stated they have consistently turned down clients or matters due to concerns about unethical behaviour.
Those areas flagged as the most problematic for firms in the responses were environmental and energy abuses, and those clients linked to Russia. This was closely followed by issues surrounding human rights abuses and child labour. Issues relating to animal welfare, defence and types of munitions were acknowledged the least.
However, none of the respondents said they are ruling out entire sectors, nor would they automatically refuse work, but instead assess every mandate on a case-by-case basis. Many respondents stated that they have specific committees, boards and teams dedicated to reviewing and accepting responsible business. These included: Clifford Chance, DWF, Osborne Clarke, Pinsent Masons, Simmons & Simmons, Freshfields, Clyde & Co, Herbert Smith Freehills, Ashurst, Eversheds Sutherland and Taylor Wessing. One of the people at Taylor Wessing stressed that it would “be unethical not to consider matters or activity”, explaining that that there is no industry-wide agreement on the sector’s wider moral role in society and “defining ethical, unlike illegal, activity requires a common understanding in the legal profession” which “takes time to establish and implement”. A common understanding among law firms, which are structured in a variety of different ways, is made particularly complex for those with a particularly international network. Dentons highlighted this, claiming that as it has no global headquarters, each jurisdiction has different laws and standards. “ESG is interpreted differently in, for example, the U.K., Saudi Arabia, China and Papua New Guinea,” a person at the firm said. In order to accommodate these differing expectations, the firm has business intake processes in line with its global ESG commitments, that includes a number of flags and triggers.
What law firms are doing
- Linklaters: According to the survey, the firm has declined to take instructions from one potential client in the defence sector, as well as various gambling mandates, on the grounds that it was not confident about the client’s approach to regulatory or money laundering issues.
- Clifford Chance: The firm has drawn “red lines” around certain clients, demarcating them as less desirable on ethical grounds. For example, it does not “act on matters such as the supply of certain munitions or any matter where there is evidence of child labour”. The firm has also recently turned down mandates involving adult entertainment.
- Freshfields Bruckhaus Deringer: The firm is following a five-step process for prospective matters which includes consultation on ESG matters.
- Addleshaw Goddard: the firm has for many years operated a policy of not acting for people and businesses who were subject to sanctions, any U.S. government-identified state sponsors of terrorism, or, like many other firms, clients linked to the Russian government.
- Slaughter and May: The firm said that its partners are free to challenge the suitability of “any new mandate or potential client on any grounds”.
- Pinsent Masons: The firm advises a variety of oil and gas clients around the world but believes this is necessary to bring about positive change, by helping them find solutions to cleaner energy. Clifford Chance said the same.
- DWF: Since its inception, the firm has turned down around 50% of all clients that have been referred to its risk and sanctions committee, according to the survey. Some of the sectors the firm has designated as “current sensitive areas” include gambling, defence and animal welfare.
- Hogan Lovells, Simmons & Simmons and Dentons said, in response to the survey, that they terminated certain ongoing matters and declined new mandates in relation to the invasion of Ukraine which they believed were not consistent with their values.
- Shoosmiths and Norton Rose Fulbright also stated that they have declined work that may involve unethical behaviour, such as human rights abuses, modern slavery and human trafficking.
A number of other firms including Eversheds Sutherland, Osborne Clarke, DLA Piper, Clyde & Co, Ashurst and Taylor Wessing, have all also turned away work from clients deemed incompatible with their ESG and ethical stances.
Macfarlanes and Watson Farley Williams are the only firms that said that they did not yet have a set ESG criteria.
Firms that declined to participate in the survey included Allen & Overy, Baker McKenzie, Latham & Watkins, Kirkland & Ellis, Bryan Cave Leighton Paisner, Cleary Gottlieb Steen & Hamilton, White & Case, Quinn Emanuel Urquhart & Sullivan, Mishcon de Reya and DAC Beachcroft.