U.S. law firms face new Justice Department demands over Trump deal talks

Traders Union
All News
Financial News
Law firms face Justice Department demands

Highlights

The U.S. Department of Justice issued subpoenas and deposition demands to law firms involved in Trump-era executive order settlements, increasing legal pressure after an ABA lawsuit.
Law firms including Kirkland & Ellis, Skadden, and Latham & Watkins face greater scrutiny due to documented settlements with the Trump administration, compared to peers that litigated.
Firms are weighing compliance strategies and reputational risks as client pressures and broad Justice Department demands raise industry-wide concern over renewed scrutiny.

Justice Department widens scrutiny of settlement talks

As reported by Financial Times, citing The New York Times, the U.S. Department of Justice has issued subpoenas and deposition demands to law firms that were targeted or threatened by executive orders at the start of Trump’s second term.

The demands come after the American Bar Association, a lawyers' membership group, sought documents about the agreements in a lawsuit accusing the president’s office and the Justice Department of running an unlawful law firm intimidation policy. A Justice Department spokesperson says the subpoenas were sent to reinforce its argument that the ABA should obtain the information from its own members.

The requests focus on communications tied to negotiations that led to the deals. That creates a sharper challenge for firms that chose to settle, because they may hold more material related to those discussions than firms that fought the administration in court.

Last year, firms including Kirkland & Ellis, Paul Weiss, Skadden, Simpson Thacher, Latham & Watkins and A&O Shearman reached agreements under which they offered hundreds of millions of dollars in pro bono legal services for causes favoured by Trump and said they would scale back diversity programmes. Perkins Coie, Jenner & Block, WilmerHale and Susman Godfrey instead challenged the executive orders in court.

Legal industry weighs response and reputational risk

Law firms are now debating how forcefully to respond, with some seeking advice from outside counsel as they assess whether to comply, negotiate narrower requests or try to quash the demands. Lawyers say the breadth of the subpoenas and the prospect of chairs or other senior leaders sitting for depositions are causing concern across the industry.

People familiar with the matter say some firms are also under pressure from clients not to strike any new accommodation with the administration. That reflects fears that another negotiated outcome could further damage reputations and deepen questions about firms' independence.

Several lawyers say they are blindsided by the Justice Department’s move and are uncertain about the administration’s rationale, though some suspect it may be aimed at pushing firms to pressure the ABA to drop its case. Others say they had expected possible scrutiny from congressional investigators if Democrats were to regain control of the House in the November midterm elections, but not from the same administration with which some firms had already reached deals.

The latest demands reopen tensions that many in the legal sector believed were beginning to fade. The ABA declines to comment, while some lawyers privately question whether its intervention has revived an issue that firms had hoped would recede from public attention.

Our earlier article on the Justice Department’s subpoenas to major law firms explained how the DOJ began seeking internal records and testimony connected to settlement talks over Trump-era executive orders. We noted that firms that struck deals—often involving large pro bono commitments and changes to diversity programs—could face greater exposure than firms that challenged the orders in court, while the industry weighed how to respond amid client and reputational pressure.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.