City law firms acting for clients with questionable sources of wealth must avoid looking like hired guns, anti-corruption experts have warned.
“Public and political confidence in the legal profession has eroded as lawyers have been characterised as enablers of kleptocracy, state capture and grand corruption, even when their actions comply with the letter of the law,” says a report published yesterday.
A task force on business ethics and the legal profession, chaired by Guy Beringer, a former Allen & Overy senior partner, was prompted by Russia’s invasion of Ukraine and the ensuing scrutiny of law firms representing oligarchs who are alleged to be associates of Vladimir Putin. One such firm was Discreet Law, which acted for the former Wagner Group leader Yevgeny Prigozhin in a case against Eliot Higgins, the founder of Bellingcat, an online reporting organisation.
Oligarchs were not the task force’s only concern. Its report also refers to other matters that “cast the profession in an unfavourable light” — including the Post Office scandal, the #MeToo movement and the use of non-disclosure agreements or abusive litigation to silence victims of sexual abuse and journalists.
Controversially, the report suggests that in civil law matters there are no regulatory rules that require law firms to accept instructions — stating instead that client choice is at their discretion and that decisions are driven by firms’ own, largely commercial, interests.
That view conflicts with the historic “neutral actor” position, which argues that law firms should not be associated with their clients and is often cited by lawyers acting for unpopular clients.
The report also identifies a gap in anti-money-laundering laws in cases where funds may be the proceeds of kleptocracy or so-called grand corruption — which involves high-ranking government officials — but it is not possible to establish that they are derived from criminal activity because there is no evidence, or there has been “state capture” — political corruption — that legitimises the wealth.
Robert Barrington, the task force’s deputy chair and a professor at the University of Sussex, argued in 2023 that there are “clients who should not be represented by lawyers”. The latest report stopped short of that conclusion — but it suggests that in making decisions about potential instructions, firms should “look closely” at their obligation to maintain public confidence in the solicitors’ profession and duty to uphold the rule of law and the justice system.
Evidence gathered from law firms for the task force by the Institute of Business Ethics suggests that the desire to “preserve their reputations” stopped some from working with kleptocrats and the beneficiaries of the proceeds of corruption. But the researchers found that the reputation of the wider profession was “almost completely absent” from discussions about accepting certain clients.
The task force calls for a “cultural change” and “profession-wide commitment to responsible leadership which demonstrably reflects the profession’s duty to act in the public interest”. It recommends “transparency, accessibility and accountability” to help firms to safeguard their own reputations and that of the profession as a whole, to avoid the “perception of law firms as enablers of corruption”.
Other recommendations include adopting a six-step “legitimate provenance of wealth test”, which would require credible explanations for clients’ wealth and incorporates consideration of the public interest and the collective reputation of the profession.
The report also suggests the adoption of revised ethical training, governance structures to embed independence and “speak-up” processes, which enable greater internal debate.
“We are saying firms should not act for clients where they have not been able to find a credible explanation for their wealth,” Beringer says. “If they choose to disregard this, they should expect to be held to account by their own staff, by the press and by the public.”
Beringer tells The Times that “it is in the profession’s own interest now to move away from a legalistic approach to a broader business ethics approach”.
Stephen Mayson, a member of the task force and an honorary professor at University College London, adds: “We should not turn a blind eye to solicitors who facilitate or support the movement of illicit wealth on the basis of a disingenuous claim that their professional ethics require them to recognise a ‘right to representation’ or that the ‘best interests’ of their client are paramount.”
Tony Williams, principal at Jomati consultants and a former managing partner at Clifford Chance, supports some of the recommendations, accepting that firms should be “more inquisitive” as to the source of a client’s funds. But he insists that the administration of justice requires that individuals — “however odious” — have access to appropriate legal advice and advocacy.
Richard Atkinson, president of the Law Society of England and Wales, also supports firms in their decisions to act for certain clients. “Lawyers have a duty to uphold the rule of law, which includes maintaining access to justice, even if acting for a particular client may not be popular.”
He stresses that “it is imperative that lawyers are not identified with their clients or their clients’ causes”.
Joe Powell, a Labour MP and chair of the all-party parliamentary group on anti-corruption and responsible tax, argues there is a “clear regulatory gap when it comes to legal professionals enabling questionable clients”.
Representing individuals with suspect wealth or links to corruption, he says, “casts a shadow over the entire UK legal system, eroding public trust and political confidence”.
