Prominent international law firms including Baker McKenzie, Linklaters LLP, and White & Case are facing pressure to cut ties with their Russian clients as strict sanctions on Russia are implemented in response to its invasion of Ukraine. Most major global law firms are exiting their relationships with their Russian clients entirely. Even if workarounds regarding the sanctions did exist, it would still be difficult for U.S.- and U.K.-based law firms to receive payment from their Russian clients due to the sanctions.
The sanctions have caused firms to cut ties with state-owned Russian institutions first and foremost. Chicago-based law firm Baker McKenzie advised Russia’s state-owned VTB Bank, the second biggest lender in the country, on a major refinancing agreement in 2020. White & Case, a New York-based firm, worked on a $1.7 billion restructuring deal with VTB last year. The Philadelphia-based firm Morgan Lewis worked on a $2.7 billion project for mining with VTB. All of these firms, as well as other firms such as Sidley Austin and Venable, who have terminated registrations to lobby in Washington for sanctioned financial [institution] VTB, have begun to sever their ties with Russian clients, according to Bloomberg.
These international law firms are also pulling their lawyers out of Russia. More than 20 international firms have offices in the country. Baker McKenzie will likely cut ties with its 130 lawyers there.
The London-based Linklater LPP is “reviewing its work with Russia.” However, a lawyer from the firm commented that “London firms won’t be able to just step in where U.S. firms had to back out. It’ll be more complicated this time.”
Some firms have stated that all relationships with Russian clients may not end. The extent to which relationships can be maintained will likely be dependent on how much deeper the sanctions cut. But even beyond the sanctions that prohibit countries from the West from doing business with state-owned Russian entities, the SWIFT sanctions on Russian banks are causing uncertainty amongst Western law firms as to whether they will be paid for their services or not.
