Fight or cut a deal? Law firms face stark choice under Trump

WASHINGTON - Law firm Paul Weiss’ chairman Brad Karp’s deal with US President Donald Trump to escape an executive order that threatened the firm’s business has sparked broad condemnation in the legal industry, as Mr Trump on March 24 continued to wield a cudgel, saying that “law firms have to behave themselves”.

More than 100 former Paul Weiss lawyers, some of whom now work at other large firms, published an open letter on March 24 denouncing the firm’s “surrender” to Mr Trump, whom they accused of trying to “silence dissent and impose a loyalty test on attorneys”.

The deal came after Mr Trump i

ssued executive orders against Paul Weiss and another large law firm,

Perkins Coie, that cited their work for or association with the President’s political enemies and their internal diversity policies. The orders restricted the access of lawyers of both firms to government buildings and officials and threatened government contracts held by their clients.

But while Perkins Coie filed a lawsuit against the Trump administration, asking a judge to declare the executive order unlawful, Paul Weiss, under Mr Karp, agreed to devote the equivalent of US$40 million (S$53.5 million) in free legal work to administration causes such as combating anti-Semitism and supporting veterans.

“If the tough, well-educated, smart, financially secure lawyers aren’t going to stand up for the most basic principles of what lawyers do, then I think we’re kind of lost,” Mr Elliot Peters, of law firm Keker, Van Nest and Peters, told Reuters.

Keker, Van Nest and Peters issued a statement on March 22 to marshal support for the Perkins Coie brief, a version of which has already been drafted.

A Paul Weiss spokesperson did not immediately respond to a request for comment.

But Mr Karp, in a letter to the firm’s lawyers and staff on March 23, said that Paul Weiss faced such a loss of clients that it was unlikely to survive a battle over the executive order. Mr Karp also said that other law firms failed to “rally to our side”, and instead sought to take advantage of Paul Weiss’ predicament by trying to pick off its lawyers and clients.

Mr Trump on March 21 ordered the Justice Department to recommend similar moves against lawyers and law firms that handle immigration cases or that sued the government over the past eight years – a group that includes many of the largest US firms.

Selendy Gay, a litigation firm founded by former partners from Quinn Emanuel, said in a statement on March 23 that it supports Perkins Coie and “rejects the notion that the government can punish lawyers for their choice of clients”.

Another firm, California’s Complex Appellate Litigation Group, has already signed on to the court brief, partner Anna-Rose Mathieson, who co-manages the firm, said on March 24.

The firms publicly promoting the brief so far handle mainly litigation and are smaller than the 1,000-plus lawyer Paul Weiss, which also has a large practice advising on corporate deals. Paul Weiss generated more than US$2 billion in revenues in 2023, according to legal industry publication American Lawyer.

Munger, Tolles and Olson, which drafted the brief and is coordinating the effort, did not immediately respond to a request for comment. A judge in Washington temporarily blocked parts of Mr Trump’s order against Perkins Coie on March 12, finding that it likely violated the US Constitution, but the case is ongoing.

Perkins Coie said in its lawsuit that Mr Trump’s order posed an existential threat to the firm. It argued that the President’s actions were illegal, and said “it cannot allow its clients to be bullied”.

“I just think that the law firms have to behave themselves,” Mr Trump said to reporters at the White House on March 24, when asked whether he wanted corporate clients of law firms he had targeted to find new attorneys. “And we’ve proven that we have others that want to make a settlement also.”

Bar associations in Los Angeles, New York City, Philadelphia and San Francisco said on March 24 that the President’s actions “undermine the right to counsel, the independence of the legal profession, and the rule of law”.

Mr Kevin Burke, former chairman of law firm Hinshaw and Culbertson, told Reuters that Mr Trump’s clash with law firms presented “a rare and dangerous convergence of political power and legal risk”.

Mr Burke, who now teaches at University of Southern California’s Gould School of Law, said the deal Paul Weiss made “might buy them breathing room today, but at a long-term reputational cost”.

‘A seemingly intractable problem’

Mr Karp, who has been Paul Weiss’ leader since 2008 and who was a fund-raiser for Democrat Kamala Harris in the 2024 election, said in his letter on March 22 that the firm had prepared a lawsuit seeking to block Mr Trump’s order.

The firm also retained Quinn Emanuel, a litigation powerhouse with ties to an ally of Mr Trump, Mr Elon Musk, according to a person familiar with the situation.

Mr Karp also wrote that “clients had told us that they were not going to be able to stay with us, even though they wanted to”, and the firm was unlikely to survive if it fought the administration.

Mr Karp said in the letter that the White House would not have veto power over its pro bono cases.

Paul Weiss also committed to nonpartisanship and to make hiring decisions based on merit, though a version of the agreement circulated by Mr Trump on social media said the firm would abandon its internal diversity policies. Neither side has clarified the discrepancy.

Mr Karp said the deal did not compromise the integrity of the firm, which has strong Democratic Party ties and routinely handles major cases and multibillion-dollar deals for leading companies.

“We have quickly solved a seemingly intractable problem and removed a cloud of uncertainty that was hanging over our law firm,” he wrote. REUTERS