Biglaw

Pandora Papers Unleash A Lot Of Biglaw Evils On The World

Seems like some internal house cleaning is in order.

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It’s unfair to define the Pandora Papers as a singular scandal as much as it’s a “coming attractions” reel for the next couple hundred scandals out there involving the wealthy and powerful engaged in shady international operations at the expense of the rest of us. The “papers” amount to around 12 million documents and are currently being scoured by over 600 journalists in 117 countries.

And you thought your document review was unruly.

They’ve turned up dealings involving royal families, presidents, prime ministers, and various rich people moving money across borders into secret accounts. Whether they’re doing it as a means of tax evasion, avoidance, money laundering, or worse depends on the particular actor.

But the Pandora Papers also have the side effect of revealing which Biglaw firms are neck deep in assisting these clients in moving this money… for whatever reasons. After all, you can’t set up a bunch of dummy corporations and funnel resources into novel, difficult to pierce, “trust-like” instruments without lawyers and The New Republic took a look at which law firms have turned up in the data dump.

One firm came up big:

As the International Consortium of Investigative Journalists, or ICIJ, detailed, few firms stand out for their offshoring help more than Baker McKenzie—one of America’s largest firms, billing itself as “the original global law firm.” As the Pandora Papers document, Baker McKenzie helped clients link up with offshore services providers time and again, and advised “corporate giants” elsewhere on offshoring tactics. Along the way, Baker McKenzie specifically crafted policies stripping away transparency in notorious offshore havens like the United Arab Emirates. And in the U.S., Baker McKenzie “sought to exempt more foreign customers from due diligence rules meant to prevent money laundering.”

The ICIJ put it bluntly, “Baker McKenzie is an architect and pillar of a shadow economy, often called ‘offshore,’ that benefits the wealthy at the expense of nations’ treasuries and ordinary citizens’ wallets.”

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How do law firms think they can get into this sort of work? Especially in an environment where working as a functional lobbyist is fraught with risk. It all depends on what you call yourself. From the TNR report:

Some lawyers now combine legal services with P.R. representation—thus taking skillful advantage of foreign lobbying exemptions that remain wide open. (One of the first hires the Jordanian king-cum-kleptocrat made after his offshore holdings were revealed was American firm DLA Piper, which will now help him with “media matters.”)

While DLA Piper is named in the text, Skadden is the subject of one of those links. Because while Baker McKenzie may position itself as a leader in this space, there are enough nooks and crannies for other firms — willing to take accept the bare minimum of “know your customer” requirements imposed on lawyers in the United States — to get themselves implicated in these documents. DLA Piper might be forgiven for not knowing what each of its approximately 200 million partners were doing at any given moment — but now that this is out there, law firms had best be setting up some healthier guardrails.

And if they don’t, it’s possible that Washington will set some up for them. With efforts afoot to sign lawyers and public relations consultants up to adhere to basic anti-money laundering regulations, the coming months could bring new protocols and many more firms highlighted in reports and testimony for whetting their appetites on the offshoring smorgasbord of the last several years.

American Law Firms Are Enabling Foreign Kleptocrats [The New Republic]

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HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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