The Shift: Operating In and From Fear
Settling a matter. Turning away certain revenue streams. Tailoring programs to regulatory shifts. Those acts are typically viewed as run-of-the-mill business decisions. Yes, perhaps they aren’t all done in perfect harmony with a company’s wishes or ideals, but rarely is a business negotiation 100% in line with one party’s desired outcome. All of this give and take is commonplace for the law firms, and particularly the clients they represent. Negotiating, advising and compromising are part and parcel of business and the business of law.
But in the current environment, what could be commonplace is now viewed as anything but.
Entering an undocumented agreement with loose terms to pre-empt possible executive orders. Declining pro bono cases you otherwise would have taken because of how it might attract governmental attention. Removing words from websites and ending diversity programs you believe were in line with the letter of the law.
Those are the types of business decisions law firms are now making. Regardless of whether they are viewed as sound choices in the face of current events or “settling” too soon without a fight for the rule of law, these choices represent a clear shift in what is driving business decisions—fear. Specifically, fear of governmental retribution and the impact that will have on the ability to attract and retain clients who don’t want to work with firms facing this retribution.
This fear isn’t just manifesting in business decisions, but is permeating throughout the legal industry, including among law firm lawyers and staff who have indicated in our latest mental health survey that their well-being is suffering as a result of living under a state of fear and unease.
The Conversation
In our sixth annual survey on Mental Health in the Legal Profession, published earlier this month, we saw some small increases in the percentage of respondents who felt gratitude and pride (42.5% and 31.4%, respectively). But we saw a larger increase of four percentage points in those who felt fear (34.5%). In a new question this year about whether respondents felt empowered, 22% said they did.
In getting more specific about what is driving some of these feelings, 70% of respondents said political polarization is negatively impacting their mental health, while 68% said geopolitical tensions do the same. And 69% said economic uncertainty is impacting their mental health.
When looking at some of the open-ended responses to our survey, a number of lawyers specifically wrote that concerns over the rule of law or actions taken by the Trump administration were the biggest threat to their well-being. Several others expressed dismay over the lack of empathy being shown in the world and within their firms.
When asked what factors have negatively impacted their mental health, respondents said things like “Donald Trump’s attacks on democracy and the rule of law,” “loss of empathy,” “gender-related discrimination,” and “the devastating effect Trump has had on our nation and the lack of empathy he had embraced and made okay.” Comments occasionally go the other way too, with some saying “woke culture/socialism,” and “leftist BS” negatively impact their mental health.
As it relates to firms operating from fear, they might not always agree.
“Fundamentally, like most settlements by the large companies that we represent in such matters, this is a business decision to resolve a potentially distracting and expensive investigation or litigation on terms that we consider reasonable under the circumstances,” A&O Shearman leadership said in a statement to their firm at the time of the firm’s settlement with the Trump administration.
But these decisions across firms go beyond the four corners of any such deal and include future decision-making. We have seen a shift in the matters firms are willing to take and the programs they are administering.
White-shoe law firms are departing from the commonplace practice of suing the government in pro bono matters over various social issues, University of California, Los Angeles School of Law professor Scott Cummings told my colleagues Dan Roe and Samson Amore. “This is something the M&A firms have routinely done and done with a lot of support and resources behind it. It’s something they promoted as part of their commitment to the public good and part of their responsibility to engage in public service.”
The ultimate result of the shift is fewer options for pro bono plaintiffs, Cummings added. “This is a lever for the administration to stop them from doing these litigation cases and other cases that are really essential,” he said.
There have also been numerous examples of firms pulling away from certain diversity initiatives and changing the language on their sites to avoid terms like equity or DEI.
White & Case, just one example of many, “discontinued” its DEI functions and put in place a professional skills training program for everyone while also renaming the chief diversity officer role as the chief engagement officer.
The Significance
In many respects, our mental health survey shows minimal but notable improvement across a number of areas of well-being. Firms were making progress on this front. But they risk blowback from talent in the coming year. While firms can’t be expected to solve external world problems that weigh on the minds of their talent pool, they are being judged on whether they exacerbate it given they are at the epicenter of existential issues facing the industry.
The significance of this shift also shows something about the power dynamic within and around law firms. For years, law firm talent held sway over many firm actions, perhaps even more so than clients did, while clients of course also exerted influence. But now, neither of those stakeholders hold as much power over management’s decision as much as the Trump administration seems to. Firms simply aren’t as worried about what associates think of them right now as they are worried about what they would describe as their ability to stay in business.
Firms are making a bet that any negative views clients or talent have about them are less significant than the impact of not making a deal or not changing internal practices and procedures. And for those that do make a deal or change practices, they are making a bet that there won’t be additional ire from the Trump administration over, say, what constitutes an appropriate pro bono case in the eyes of the administration. A deal with the Trump administration, given some of the ambiguity in the agreements, may not be a done deal. That, in turn, leaves a level of anxiety among the attorneys who are waiting for the other shoe to drop—or a case to come across their desk that they have trouble working on.
The Information
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The Forecast
There is certainly nothing wrong with making tweaks to avoid a regulator’s sights. Changing language on a website without backing away from the programs the language described is relatively benign on the surface. Smart even. But without messaging to at least the portion of one’s workforce that may directly feel less cared about or protected, the risk to the talent pool in the long-term could be significant. If nothing else, it could impact how much they live in fear when not only the current state of the world feels like a risky place, but their workplace does, too.
While it should certainly be noted that only nine law firms have actually agreed to deals with the Trump Administration, the angst felt across the industry doesn’t stop within those firms’ walls. The silence from other large firms that are fearful of speaking out against the administration’s actions is equally as traumatizing for some.
One has to wonder whether the time for safety in numbers has passed. The silence across the industry is akin to the last time many of them were fearful of a political regime—or at least fearful of losing business from that regime. The fear we hear from sources on even discussing these issues around the Trump administration is similar to what our newsroom experienced at the height of the tensions between Hong Kong and China five or so years ago.
As my colleague Paul Hodkinson wrote recently, it becomes difficult in times like these to determine who is “the bad guy.” Typically the legal industry would pinpoint the person or entity that is jeopardizing the rule of law as the “bad guy.” But that doesn’t mean the firms can wash their hands of having to support their teams, and possibly clients, through this time period. Business decisions or not, fear can be corrosive.
