The Impact of the Trump Administration's Executive Orders on Law Firm Recruiting

The Trump Administration’s executive orders aimed at various law firms has resulted in the most significant issue that the country’s leading law firms have faced in recent memory.  Some pundits in the mainstream media have even predicted the demise of the firms that settled with the Administration. In this episode of Steve’s Rules, Steve and his McCormick Group colleague Dave Ris provide some insights on the impact of these orders and the law firm responses, with a particular focus on lateral partner hiring.  Subscribe

Key topics covered in this episode:

• Immediate impact on law school, associate and partner recruiting.
• Which litigators might be affected
• How corporate clients might react
• Impact on the DC offices of the Wall Street and other elite firms that have settled
• Possible chasm between “transactional” and “litigation” firms
• How this may impact Government Relations practices in DC

*Discussed in the podcast is Microsoft’s decision to drop one of the settling firms in shareholder litigation in Delaware.  https://www.reuters.com/business/microsoft-swaps-law-firms-shareholder-case-hiring-trump-adversary-2025-05-01/

*In the conclusion, Steve attributed a Bette Davis quote to the movie “It Happened One Night.”  In reality, it was from “All About Eve.”

Contact Steve
McCormick Group

Contact Murray
M Coffey

Transcript

Dave Ris: 0:00

Dave, regular listeners and viewers of Steve's rules are hearing a new voice. This is Dave Riss I am a principal at the McCormick group with a specialty in legal and government relations. I am subbing for Murray Coffey, who has a scheduling conflict. The subject of this edition of Steve's rules is the impact of President Trump's executive orders on lateral hiring and law firm strategy. Steve, I'm glad to be here. Yeah, welcome.

Steve: 0:39

Welcome to the podcast one to start with. So

Dave Ris: 0:44

go ahead, yeah, unfortunately, you have the harder part here, because I get to ask the questions. So certainly there's been a lot of chatter in mainstream media, the firms that have decided to comply with some of the President's demands, may see a large number of departures over the next few months. What are your thoughts on that? Right?

Steve: 1:11

My sense, after talking to partners and associates at law firms as well as people currently in the government, is that the impact, at least immediately will be pretty minimal. Yes, we're seeing some associates resign. There'll be some departures. There's always departures of associates anyway. So you never know. You never can really attribute things to this issue or not. I do think there'll be an impact at the law school level and on campus recruiting. I think that that those law firms that settle will have more trouble attracting people because those students are going to they're much more focused on this issue than than law firm partners are at the partner level. I think that at least right away, not a lot of impact. I think that even the partners at the firms that disagreed with their firm's approach. They understood that this, in many cases, this was something a firm had to do. There was just too much money involved. There were too many existing clients that needed to get their deals done. So they felt both the duty to their clients and make sure that they were representing them fully and hopefully for them to succeed. And then also, the lawyers were also the part rainmaking partners. They were concerned that those partners, if given that chance, might leave their firms, if, if they took a hard stance against the administration. So I don't I think that the the general view is that this was something we had to do, or not like it. Didn't like it, but that's what we had to do. I do think, though, that in time, there may be situation, there will be situations where partners at the big firms may make a change, or consider making a change, because if it's in litigation, and it's litigation against the government, that those lawyers may feel like there'll be a perception among their clients that they're not going to fight all the way with regard to particular issues. And we've already seen sort of evidence of this, the case, and we'll put the links in the show notes, the case involving Simpson Thatcher, where Microsoft has changed law firms in the middle of a shareholder lawsuit Delaware, and they changed from Simpson Thatcher to, ironically, general block, which, of course, is one of the firms that are fighting the executive order. So clearly, even though they haven't said anything, clearly, Microsoft felt like we need it. We need somebody who's known as a fighter here, as opposed to a firm that has been more on the settlement side of things. So I think we may see that. The other point I will make is that you've got certain issues that are particularly regulatory issues where there are lawyers, particularly in Washington, that represent certain types of companies that will often sue the government. Look at the healthcare space. You know, there's a lot of suits involving reimbursement. Now you're looking at the food industry. There's going to be changes made with this current HHS Secretary with regard to food dyes and food products and so forth. There's going to be litigation. And again, I think that the partners may feel like their stance with clients and prospective clients may not be great if they stay one of these firms that have settled mostly, as we say, mostly New York firms, but also Kirkland and Latham, Hawaii. So I think those those partners may may make a change, or may certainly consider making change.

Dave Ris: 4:45

Yeah, so the three industries that that I've heard where if compliance with political demands creates risk, you mentioned tech in the in Microsoft, obviously there are more, and also healthcare and then. The third sector would be finance, and so perhaps you'll see partners in those sectors exit to preserve those relationships, right,

Steve: 5:09

right? I would say on the one hand, the finance side was probably the industry that was on their minds of the settling firms, because those firms were involved in all these deals, whether private equity or the big banks or whatever. So there's that side of things where there was pressure, really on the firms to settle on the other hand. As you point out, they often sue the sue the government as well. And so therefore there may be back there. And so that's one of the things that we may see as a further sort of division between transactional firms and litigation. There'll be more of a distinction, I think, and I think that it'll be a challenge, I think, for the big transactional firms to continue to hold on to to litigators, particularly if those litigators are often opposed to the government in their litigation, that includes white collar as well. I mean, certainly there are white collar situations where the lawyers are aggressively pursuing defending their clients with regard to sort of government investigations. And therefore there may be a feeling like we can't be perceived as being compromised in any way because of what we've done with the with these administration orders.

Dave Ris: 6:35

So given that we're only 100 days plus into the Trump administration, might other factors, such as internal dissent, begin to play a play a role here, right?

Steve: 6:49

I think that's a contributing factor. I don't think it's I mean, I think we already know that there's a lot of sort of disagreement among the lawyers at these firms who do different who have different types of practices. But I don't think the dissent alone will carry the day. I think that law firm partners primarily are focused on the impact to their practice. If it's going to impact their practice, they'll consider making a change. It's always been the case with lateral movement. It'll continue to be case now it's just this is a new wrinkle in that whole stratosphere of different things that you're thinking about.

Dave Ris: 7:29

Do you think that there are a number of firms who are not under this pressure? Might they be in a position where they believe they can poach top tier talent?

Steve: 7:40

Yes, but the one thing I would caution everyone to think about is we're talking about the firms that have been affected by the executive orders, and particularly the ones that have settled are elite Wall Street type firms with high rates and really sophisticated practices, I think the lawyers who are currently there are going to are they will think about peer firms that are not in this sort of group of firms that have set, we're talking about the big Washington firms, 14 Covington, Wilmer, Hogan, those kinds of for Arnold Porter. So those kinds of firms definitely. And then there'll be other sort of national type firms that have, have really not been involved in these executive orders. So you're really talking about sort of the the top end of the market being an impact more than, I don't think it's a great advantage for a firm in the second 100 or even beyond that, maybe, maybe again, really good litigation boutiques Could, could definitely take advantage of this, but your general practice firm in a non major city, probably not a lot. They probably don't get that kind of opportunity, because those and those partners will want to go somewhere else.

Dave Ris: 8:59

So you mentioned that Washington DC firms, which typically have big regulatory practices, but over the last 15 years, really, since the oh eight financial crisis, the Wall Street firms have made significant inverts into to the Washington market. Do you see that changing?

Steve: 9:23

Well, I do see that changing, maybe not, not dramatically, but I do see it changing that I think that you go back to 2008 and 2009 and look at what happened. I mean, the firms, New York firms, had to go in because of of the legislation and enforcement activity that was occurring to their big clients that Washington affected, and to deal clearance as part of this and so forth, so that they grew. They they expanded their washing offices with really good attorneys who could handle their. Clients needs, particularly because there was net more of a Washington impact. So I think that that expansion was pretty dramatic. There were a lot of firms like Cravath that didn't even have a Washington respect, 2008 2009 and the other ones grew, grew substantial. So I think that there will be some of those lawyers, as I indicated earlier, in the sort of litigation enforcement practices, I think there'll be less of an incentive for those, for those lawyers to stay, and lawyers coming out of the government or recent government, they will, for both political reasons and for sort of practice reasons, are unlikely to go to those firms. Are less likely to go to those firms than they have in the past. So I think there'll be an impact. I think the growth will slow, but I don't think they're going to pull in their tents and leave the city. That won't.

Dave Ris: 10:55

So let's switch just to top to the other aspect is a lot of the law firms who have a significant presence in Washington, DC, in an area that that I'm very interested in, in government relations. All of the top players were talking about firms such as Aiken Gump Holland and Knight Brownstein, Hyatt s Murray, Patton Boggs, for example, they've taken a strongly bipartisan approach, and have for years. Given the changes, do you see that thing happening there? Is that? Is that going to evolve?

Steve: 11:32

I don't think it'll be a substantial change there. I think that there's a lot of advantages to bipartisanship, and that's particularly true, I think, when you're dealing with Capitol Hill, the issues of interest to bear clients business clients are often tend to be the ones that aren't, that aren't the hot button issues that get covered by the mainstream media. So there's always legislation that impacts the industry, healthcare, insurance, technology, et cetera. There's a lot going on that that, that the hill can accomplish, and to get that, to get their result for the clients, they're going to need representation on both sides. So I think that dynamic should not change. The only thing I would say is that there may be some hot button issues that this administration feels so strongly about that some of these firms will shy away from certain representations because they feel like they don't want to offend the administration. So I think we're already seeing this already, where if you can avoid offending the government, if you can avoid it, you'll do it. So I think that may be an impact. But beyond that, I'm not so sure. What are you seeing out there?

Dave Ris: 12:54

Well, I think that the firms understand, and especially those where their clients are in regulated industries, you know, those firms, those organizations, prefer firms that maintain that political neutrality, at least broad access that's really critical to them. And if, if, if the firm is perceived as being too close to a polarizing figure such as President Trump, they feel that they may lose clients who fear our reputation lost or diminished to effectiveness. I think that that's that's going to be a real thing and and also, I think those firms are going to be concerned about brain talent drain, because they believe that their effectiveness is compromised. And so top talent may often understand that they don't risk one or risk by association. Now, on the other hand, one of the things that is real in Washington is we do have a number of independent lobby shops, and they may be able to, you know, play one side or the other with great effectiveness, and they're not going to change.

Steve: 14:24

Yeah, I would say the one thing that's a little different with this administration is given their view of executive power and authority, that right now, there is more of an emphasis in the government relations world, an executive branch lobby versus congressional one. There's a lot going very true hell right now. So that's an opening for firm, for firms that have that clear Republican leaning, and Republican professionals, many of which might even have Trump administration first, Trump administration credential. So there's an advantage. Advantage there, which I think we'll see at least for the next year or so. But as we all know, there's an election coming up, a midterm election, and of course, there'll be another presidential election in 2028 so this could all be a relatively short term for now.

Dave Ris: 15:18

So that's all my questions. Steve. Have any closing thoughts?

Steve: 15:24

This situation reminds me of the 1940s movie. It Happened One Night, and the sort of the most famous line in that movie was Eddie Davis say, be careful. It's going to be a bumpy ride. So I think that's what we're doing. I think things are going to change. There'll be new things happening. I think this is the biggest legal issue that has hit the legal community in my lifetime, and it'll certainly my professional career, which goes back to the late 70s. So I think that things will change. There'll be new developments. It's really hard to predict what's going to happen so things will change, but hopefully I've provided at least some things to look at as we move on to The future.

Dave Ris: 16:10

Very good. Steve, Thank you. Thank you. Applause.