Moscow, St. Basil's Cathedral in Red square, Russia. Credit: TTstudio/Adobe Stock
Citing restrictions placed by sanctions, a growing number of U.S. law firms are parting ways with Russian clients in the wake of Russia's invasion of Ukraine.
Baker McKenzie is set to part ways with major state-owned Russian clients amid heightened sanctions and a growing call for the West to take action, as Ukraine continues to defend against the Russian invasion.
The firm "is reviewing and adjusting our Russia-related operations and client work to align with all applicable sanctions and comply with these fast-evolving laws," and "this will mean in some cases exiting relationships completely," it said in a statement to The American Lawyer sibling publication Law.com International.
Venable also confirmed Monday that it was ending its relationship with a banking client.
"Venable no longer represents Sberbank CIB USA, Inc.," the firm said in a statement. According to public documents, Venable lobbied for the bank in the United States since 2017.
Sidley Austin similarly confirmed Monday that it was ending a lobbying relationship with another Russian bank.
"VTB Group is no longer a client of Sidley Austin LLP in compliance with U.S. sanctions," the firm said in a statement.
Baker McKenzie would not comment on specific institutions, but among the firm's major state-owned clients facing potential sanctions are VTB Group—one of Russia's biggest state banks—and Gazprom—one of Europe's largest producers of petroleum.
In September, Baker McKenzie advised VTB, among other banks, on a $273 million capital raising by network provider VEON. Several of its lawyers have advised Gazprom, according to the firm's website.
The firm has also advised defense conglomerate Rostec, and the Russian Ministry of Finance, which it advised on a €1.5 billion eurobond offering last year, according to its website.
Businesses in the West are under increasing pressure to break ties with the Russian state amid the fast-developing conflict in Ukraine. In the space of a few days, BP announced its decision to ditch its 17% stake in Rosneft, while Chelsea Football Club is, on the face of it, loosening its relationship with owner and oligarch Roman Abramovich.
Several experts believe state-owned businesses have furnished the Russian government with the financing required to pursue its invasion of Ukraine, while companies including Rosneft are also suppliers of fuel to the Russian military, according to media reports.
Baker McKenzie is one of several firms to have shuttered their Ukraine offices last week as Russian troops entered the country from its borders along Crimea in the South, Donbas in the East, and Kyiv and Kharkiv in the North. Other firms included CMS, Dentons and a host of other Ukrainian law firms. Firms have been working to protect staff where they can, as well as client data.
Other firms are reviewing their work with Russian entities. Linklaters, which counts several Russian companies as clients, said Monday it was assessing those relationships.
Bruce Love contributed to this piece.
Krishnan Nair
Krishnan is Managing Editor of Law.com's international arm. A qualified solicitor, he has written for a number of information providers, including LexisNexis and an FT publication, joining ALM in May 2018. Email: [email protected]