This means that law firms are free to continue serving Russian clients. In some cases, lawyers may even serve clients who are subject to sanctions based on Treasury licenses. Although earlier this year the vast majority of British law firms announced they would leave Moscow in response to the war, Reya`s Mishcon was a law firm that defended its decision to stay in Russia. A Mishcon spokesperson said at the time that it “will continue to act for Russian customers who are not subject to sanctions, in accordance with our regulatory obligations and ethical values, and also because we have not discriminated on the basis of nationality or anything else or that we will never discriminate, some of our Russian clients are themselves the target of President Putin`s government.” The Law Society has now flagged problems with recent government sanctions. A spokesperson for the Law Society told RollOnFriday: “Law firms quickly withdrew from the Russian market after the invasion. All UK government proposals should be presented in collaboration with international partners such as the US and the EU. It is important that companies continue to be able to advise those who want to divest themselves of the Russian market. In particular, the new measures against the provision of professional services, particularly legal services, do not appear to go as far as those proposed in Parliament`s recent appeals. During a parliamentary debate on 22 September 2022[9], the British government was called upon to prevent Russian state-owned companies such as Gazprom and VTB Bank from using British courts to “effectively deliver justice against Ukraine”.
The reason for this is that damages obtained by Russian companies in British litigation will ultimately finance the Russian invasion and thwart the purpose, efforts and spirit of the British sanctions regime against Russia. It has also been suggested that there are other measures against UK law firms and banks that do not comply with existing sanction regimes, with managing partners held individually liable for their work if infringements are found; and a direct ban on UK law firms representing companies in which Russia has a significant or controlling stake. Iain Wright, Executive Director of the Institute of Chartered Accountants (ICAEW), said: “Many of our individual members and member firms have already taken proactive steps to separate from Russia if necessary. ICAEW is confident that auditors, whether in practice or in business, will be ready and willing to play the greatest possible role in the effectiveness of these new measures. British law firms will not be able to provide “transactional legal advice” to the Russians after the government further tightens the sanctions regime. Several large companies have closed offices in Russia, abandoned Russia-affiliated clients, and announced reviews on how to accept new instructions. Russia`s invasion of Ukraine has led to increasing pressure on law firms and lawyers, some of whom have been criticized in parliament as allegedly “amoral” and “offering a one-stop shop to offer a legalized form of intimidation.” It is not clear from the response whether the three practices mentioned are the only companies that have made representations on behalf of Russian clients regarding sanctions. “Law firms that have made representations to the government in connection with correspondence handled on behalf of Russian or Russia-related clients under the Russian-British sanctions regime include BCL Solicitors LLP, W Legal Limited and Peters & Peters.” Other companies have also clearly expressed their sympathy for Ukraine. For example, this week, Sidley Austin is launching a photo exhibit by prominent photojournalists who “cover the humanitarian crisis during the ongoing Russo-Ukrainian war” in support of RE:ACT, a disaster relief charity. James Dingley and Baiju Vasani have left Ivanyan & Partners as the city`s law firms come under scrutiny due to their ties to Russia Law firms offer their clients a number of ways to keep up with growing sanctions lists, including through the use of AI-powered legal technologies. Akin Gump Strauss Hauer & Feld, for example, has signed subscriptions with more than 200 customers to its Russia Trade Controls Resource Center, which tracks changes to Russia-focused sanctions and export rules. Akin Gump and about two dozen other companies closed their offices in Russia after war broke out and initial sanctions were imposed, a group that includes Latham & Watkins, Freshfields Bruckhaus Deringer and Morgan Lewis & Bockius.
Most continue to advise companies on the legal consequences of the invasion. The UK government has announced that law firms will no longer be able to offer “transactional legal services” to Russian clients, cancelling the exemption of legal services from its sanctions strategy. Many law firms closed their Russian offices after Russia`s invasion of Ukraine in February, while others pledged donations to support Ukraine.