Faced with the threat by President Donald Trump of potentially ruinous executive orders, five of the largest and most profitable corporate law firms in the U.S. — including four that have large operations in Texas — reached settlement agreements Friday with the White House that require them to allow an independent outside counsel to monitor their recruiting and hiring practices for possible discriminatory efforts.
Kirkland & Ellis, Latham & Watkins, Simpson Thacher & Bartlett and A&O Shearman, which combined employ more than 700 business lawyers in Austin, Dallas and Houston and generate nearly $2 billion in revenue in Texas, also agreed to each provide $125 million in free legal services — some pro bono and some possible legal work for the federal government — and agreed that their pro bono work would include more politically conservative causes.
A fifth law firm, Cadwalader Wickersham & Taft, also joined the agreement but it has no operations in Texas. Paul Weiss and Skadden Arps reached similar settlement agreements with the Trump administration. Skadden employs 45 attorneys in its Houston office.
Earlier this month, President Trump said that the corporate law firms he is targeting “have done some very bad things,” including representing clients and causes that are un-American. On Thursday, President Trump said that he may ask the settling corporate law firms to represent his administration in tariff negotiations with other countries.
Multiple sources told The Texas Lawbook that the five firms tried multiple times this week to convince additional corporate law firms to join them in settling with the administration but that those firms declined.
Kirkland sent its lawyers and staff a three-paragraph memo Friday explaining its decision. The memo was anonymously posted on LinkedIn.
“The firm will continue to determine which matters we take on — both pro bono and otherwise — consistent with our non-partisan mindset,” the memo states. “In exchange, this resolves the EEOC’s investigation, including its broad request for information about our people and our clients, which we no longer will be required to provide, and we will not be the target of an executive order. We made the decision to pursue this solution because at our very core our mission is to protect and support our people and our clients, and this agreement does both.”
The Equal Employment Opportunity Commission sent a 10-page letter to 20 different corporate law firms — 13 of them with operations in Texas, including Kirkland, Latham and Simpson Thacher — demanding that they “fully identify all clients that have diversity preferences or any demographic-related requirements for matters, including but not limited to race or sex requirements for the employees staffed on their matters.”
The law firms have until April 15 to comply, according to the EEOC letter.
The settlement agreements signed Friday by the five firms are in stark contrast to the response earlier this week by Houston-based Susman Godfrey, which made it clear that it will fight the executive order issued Wednesday against the firm by President Trump.
Two other corporate law firms, Perkins Coie and WilmerHale, filed lawsuits against the Trump administration last month when the president slapped both of those firms with executive orders. Two different federal judges — both appointed by President George W. Bush — have issued temporary restraining orders prohibiting the federal government from taking actions to enforce portions of the executive orders.
While none of the law firms involved would comment about the decisions to fight or settle, lawyers have turned to LinkedIn to express their opinions.
Lucky Vidmar, an intellectual property lawyer at Microsoft, posted that he and Susman Godfrey are on “the opposite sides of the most important copyright law question of our era.”
“But tonight, I stand with them and applaud their courageous and correct decision to uphold the core principles of our profession,” Vidmar wrote. “Every lawyer licensed in the United States took an oath to uphold the rule of law. In the face of open threats to it, more (well, all) of them should be like Susman and heed this sacred duty. And in particular this includes many M&A lawyers who seem to think that these highfalutin rule of law principles don’t apply to them and who drive their firms to deeply misguided capitulations.”
“Cowardice won’t work, and history won’t judge you kindly,” the Microsoft attorney wrote.
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