Trump's Attack on Big Law

0:05Earlier this month on Fox News, President Donald Trump announced a new plan. We have a lot of law firms that we're going to be going after because they were very dishonest people. They were very, very dishonest. His plan is to go after big law firms. The president signed a memo suspending the active security clearances of lawyers from a firm called Covington and Burling. In the latest chapter of Donald Trump's promised retribution, he has signed an executive order against a law firm called Perkins Coie. President Trump issued another executive order purporting to punish yet another law firm, this one Paul Weiss.

0:46President Donald Trump has signed an executive order targeting Chicago-based law firm Jenner & Block. These executive orders could have massive detrimental consequences for some of the nation's biggest law firms. Here's our colleague Erin Mulvaney, who covers legal affairs. It could just make you bleed clients pretty much right away, almost immediately.

1:13And as these executive orders were coming out, what was the response from lawyers in those firms? Shock and fear, for sure, within those firms. It was a pretty dramatic move that could really destroy these businesses. So law firms have a lot of reason to be afraid for their business if they are targeted with an order. These law firms are now having to decide how to respond. And none of the options are good.

1:46Welcome to The Journal, our show about money, business and power. I'm Kate Leinbaugh. It's Wednesday, March 26th.

1:59Coming up on the show, Trump's attack on big law.

2:19Trump is taking aim at some big law firms because of things that happened years ago, going all the way back to his first term. It's pretty fair to say it's a way to come after people that had brought legal challenges against him before or done research and opposition work for people that were his opponents in the past. The first firm Trump went after provided some legal services around the investigation of Trump's role in the January 6th riot. One law firm that provided pro bono legal services to the special counsel's office under Jack Smith's leadership was Covington & Burling. Trump issued an executive order against Covington & Burling that suspended the firm's security clearances and placed its government contracts under review.

3:12If a lawyer handles a case, say, for a government official, and there are sensitive materials involved in that investigation, in order to represent that client adequately, he or she would need some kind of security clearance and access to that material. Trump said his order was in response to, quote, the weaponization of our system by law firms. Covington said it had a long history of representing clients facing government investigations that is, quote, consistent with the best traditions of the legal profession. About a week later, Trump issued another executive order against another prominent firm, Perkins Coie.

3:54The Washington law firm has, among many clients, represented Hillary Clinton and the DNC during the 2016 presidential race. This executive order went further than the first one. It limited the firm's access to federal buildings. So many things are federal buildings. Obviously, if you can't go to a federal court to represent your client, it would make it pretty limiting to represent that client. And probably most significantly, it directed agencies to investigate any federal contracts that the firm or its clients have and remove them. So why is that the most significant part of the order? So many of the big companies that they represent have very lucrative federal contracts.

4:43And if they work with that firm, they will lose it. So what you're saying is if their clients want to keep their federal contracts, they'd have to go to a different law firm. That seems like it would be a big deal for Perkins Coie. It would be very meaningful to lose their clients. These law firms do make relationships with clients over a long period of time. So that's why it was pretty existential and could potentially destroy a firm. Losing their clients, that's kind of their main currency. Perkins Coie decided to fight back. The firm said the order was a, quote, irrational abuse of power that shocks the conscience.

5:27The firm alleged the order was illegal in at least nine different ways, including violating a client's right to legal counsel. So Perkins Coie took the case to court and immediately got an emergency injunction that blocked the order from taking effect. A federal judge has ordered the Trump administration to temporarily halt some of the penalties it levied on a law firm linked to Democratic causes that are unpopular with the president. How has Trump responded to that suit? They've pushed back in court. I listened to the hearing, and since they have also called for the judge to be removed, the upshot of what the Justice Department lawyer was arguing is that the president should have the power to say who or what institution creates a national security risk and should have that discretion.

6:23That's the main legal argument that they have on their side. Just days later, Trump signed a third executive order that would take his fight against big law in a different direction. This order was against a major law firm called Paul Weiss. The law firm is one of the nation's top firms. It has 1 ,200 lawyers. It has some of the biggest clients that you could think of on Wall Street, Goldman, Blackstone, Apollo. So they're often in the conversation of some of the biggest players in the legal industry. And like the other firms Trump has gone after, Hallweiss has done some work for people and organizations that oppose Trump.

7:07Their chair, Brad Karp, is a pretty prominent Democratic donor. And in the past, especially during Trump's last administration, did assist the ACLU with fighting some of Trump's policies, particularly the policy that separated children and their parents at the border. Did Trump say anything in particular about why he was taking aim at Paul Weiss? In the order, it cited some pro bono work that Paul Weiss did for the attorney general in Washington, D.C. when they provided some legal help against the January 6th rioters who were accused of storming the Capitol. one, and then mentioning an affiliation with a former partner there, Mark Pomerantz.

7:56Pomerantz is someone who used to work at Paul Weiss. He was affiliated with the firm for about two decades. In 2021, Pomerantz worked at the Manhattan DA's office on an investigation that resulted in an indictment against the Trump Organization for alleged fraudulent business practices. The indictment eventually fell apart.

8:23Trump's executive action against Paul Weiss was basically identical to the one against Perkins Coie. And immediately, it started to impact Paul Weiss's business. Other big law firms started to approach Paul Weiss's clients, hoping to poach them. At least one client decided to drop the firm. Our reporting indicates that the other big firms did take advantage of some of this, the misfortunes of the other firms. And in fact, this client that we were just talking about, they went to another big firm, but they had to go somewhere. We've had reporting that there was some circling around. The sharks are going to shark.

9:03The sharks are circling. What options did Paul Weiss have? Paul Weiss had the option to sue to block the executive order. And then what they did was a little different than that. I would say a lot of people wouldn't have imagined the option they took was going to be possible. After the break, what Paul Weiss did and why it was so surprising.

9:42Once Trump signed the executive order against Paul Weiss on Friday, March 14th, it set off a scramble. Already over the weekend, all the partners at Paul Weiss were hearing from clients, talking to each other, what are we going to do? They hired a lawyer. They were preparing to sue. They were ready to take it to court to try to get an emergency order, an emergency ruling blocking the order from taking effect. The lawyer for Brad Karp, the chair of the firm, had another suggestion to possibly talk to the president himself to talk to him about how to get rid of the order. Diffuse the bomb. Diffuse the bomb.

10:23As a reporter on it, I was very surprised that they didn't sue that Monday first thing because, like I said, this could be detrimental to a firm. In the background, Brad Karp found a way to Trump. He tapped a powerful acquaintance, Robert Kraft, the owner of the New England Patriots. Kraft connected Karp with the president, and a meeting was set up. They met in the Oval Office on a Wednesday. They talked for three hours. And by the end of the meeting, a deal had been reached. What was in the deal? Paul Weiss agreed to several things. the first of which was to give$40 million to certain pro bono legal services that the president approves of.

11:12They include veterans, things that are against anti-Semitism, and a few other things. They agreed to some sweeping language about merit-based hiring practices, which I think in Brad Karp's view lined up with the requirements of federal civil rights laws. The firm also agreed to not take clients based on any political ties or partisanship. That's actually kind of a normal thing for firms to say. They're not necessarily trying to take clients because of a political, you know, that's the whole point. They're trying to be neutral anyway. So that was the agreement. And then Trump had a message on Truth Social on Thursday evening.

11:58President Trump yesterday rescinded an executive order targeting prominent law firm Paul Weiss. How big of a deal is this, given that Perkins had gotten a temporary injunction and that people in the legal community thought Paul Weiss had a pretty good case? I think it was pretty shocking because if Paul Weiss took this to court, they'd probably win. And I think in the legal community, there's a sense of upholding what they call like the rule of law, just respecting that an executive wouldn't be able to take an action. So sweeping to target a firm like that. And the capitulation of such a major, powerful figure maybe rattled people even more in the legal industry.

12:49that the president could have such power over the law firm. A lot of people in the legal industry were very upset by what happened.

13:02What has Paul Weiss said about why they went this route of striking a deal instead of getting litigious? Actually, Brad Karp did send a note over this weekend to his partnership explaining that the business was likely to be destroyed if the executive order were to stand, was happening very fast, that competitors were swooping in. And he also said it was easy to complain from the sidelines when you're not faced with this existential crisis of your business being destroyed by an executive order. President Trump is pushing ahead. He said he's looking into executive orders against more law firms. Yesterday, he signed one against the firm Jenner & Block.

13:49Jenner said the executive order was similar to the one that had already been declared unconstitutional by a federal court and said it would pursue, quote, all appropriate remedies. Are you seeing any other sort of changes in the industry among firms trying to get ahead of a conflict with Trump or dodge a conflict with Trump? I think the silence and the chill that you're hearing from them is probably one answer. I should also say getting a deal is not necessarily doable either. It's not clear if there can be a meeting with every single firm that Paul Weiss got. So I think they also are trying to stay out of the way of Trump in many ways.

14:42What are the implications of, like, all of this on the legal system? I think that the implications are that if you are a lawyer, your job is to represent clients. Yes, you choose your clients, but there's always been kind of a layer of protection for unpopular clients. You know, people represent—people are accused of murder and things like that. Obviously, that's not what we're talking about here, but there's pretty sweeping understanding that the role of a lawyer in the legal system is to have a vigorous defense of their client. So if you go after a law firm for taking on a client, it hits at the root of what this industry is all about.

15:28Trump has, I think we're tracking, you know, more than 120 lawsuits against his administration currently. And so far, the courts have been one pretty significant check on what has happened so far in this administration. And in the past, the legal industry has felt, at least big law, these big firms have felt very insulated from the political fray, from attacks by executive orders, the administration. And so this is a clear shift from that narrative.

16:06That's all for today Wednesday, March 26th The Journal is a co-production of Spotify and The Wall Street Journal Additional reporting in this episode by Josh Dossie and Ryan Barber Thanks for listening See you tomorrow