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Law firms cut ties with Russian clients as sanctions bite

* International firms are reassessing client relationships
to
comply with sanctions over the Ukraine invasion

* White & Case said it is “taking steps to exit some
representations”

WASHINGTON, March 1 (Reuters) – Major international law
firms with Russia offices, including White & Case, Baker
McKenzie and Morgan, Lewis & Bockius, are scrambling to respond
this week as an intensifying sanctions web puts some clients off
limits and threatens their business in Moscow.

White & Case, a New York-founded firm with more than 2,200
attorneys and that worked with sanctioned VTB Bank last year on
a $1.7 billion restructuring deal, is assessing its work in
Russia and Belarus “and taking steps to exit some
representations in accordance with applicable rules of
professional responsibility,” a firm spokesperson said Monday.

A spokesperson for Baker McKenzie, which has advised VTB on
financing matters and has roughly 4,700 lawyers, said Monday
that the firm is “reviewing and adjusting our Russia-related
operations and client work” to comply with sanctions. “This will
mean in some cases exiting relationships completely,” the
spokesperson said.

Baker McKenzie’s website says it has more than 130 lawyers
based in Russia.
A spokesperson for Philadelphia-founded Morgan Lewis said the
firm will ensure it remains in compliance with sanctions,
“including with respect to any client representations.”

Morgan Lewis earlier this month touted its work for VTB Bank
and the Russian state development corporation VEB.RF in a $2.3
billion financing project for a mining site. The 2,000-lawyer
firm removed a press release on the deal from its website
Monday.

At least two other U.S. law firms, Sidley Austin and
Venable, already last week terminated registrations to lobby in
Washington for sanctioned financial institutions VTB and
Sberbank, respectively.

The West has moved to punish Russia with a raft of measures,
including shutting out some Russian banks from the SWIFT global
financial network and restricting Moscow’s ability to use its
$630 billion foreign reserves.

The economic fallout has continued to escalate. Shell said https://www.reuters.com/business/energy/shell-exit-russia-operations-after-ukraine-invasion-2022-02-28
Monday that it will exit all Russian operations, one day after
BP said it will pull out its stake in the Russian oil giant
Rosneft over the Ukrainian invasion.

At least 20 international law firms have offices in Moscow,
hosting lawyers who often work with colleagues in London and New
York to advise clients in energy, finance and other sectors.

It’s unclear how much business law firms will lose from
severing ties with prohibited clients, and many will likely find
business advising other clients on navigating the sanctions. Not
all of the new sanctions have immediately gone into effect,
giving firms time to end relationships.

Many global law firms that have Moscow offices have worked
with newly sanctioned Russian entities in the past, according to
press releases and media accounts, including Akin Gump Strauss
Hauer & Feld; Allen & Overy; Cleary Gottlieb Steen & Hamilton;
Debevoise & Plimpton; Dentons; Freshfields Bruckhaus Deringer;
Hogan Lovells; Latham & Watkins; and Skadden, Arps, Slate,
Meagher & Flom. Representatives for those firms declined to
comment or did not respond to questions about their Russia work
and operations.

Representatives for London-founded global firm Linklaters,
transatlantic firm Bryan Cave Leighton Paisner and Texas-founded
Baker Botts, which also have offices in Moscow and have worked
for newly sanctioned entities, said they were reviewing their
client matters.

A lawyer in the Moscow office of one global law firm said
the scope of current sanctions would cut more deeply into
international lawyers’ business in Russia than past sanctions
rounds, as the new penalties from individual countries overlap
more broadly.

“London firms won’t be able to just step in where U.S. firms
had to back out,” said the lawyer, who requested anonymity to
speak about a sensitive topic. “It’ll be more complicated this
time.”

(Reporting by Jacqueline Thomsen.
Editing by David Bario and Gail Cohen.)

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