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The IBA’s response to the war in Ukraine
Partner, Clayton Utz
Switching to a hydrogen practice is one way to transfer skills built in oil and gas servicing, and many law firms have moved to capitalise on the increased focus on clean fuel in the broader climate change arena. Earlier in 2021, Julie Mayo left her role as head of Norton Rose Fulbright’s US oil and gas practice in Houston to join Baker Botts’ now year-old hydrogen practice.
‘The firm has been a leader in the energy space since it was founded well over a hundred years ago, but it was also the first major US law firm to become a comprehensive thought leader on emerging issues such as hydrogen [and carbon capture, utilisation and storage] and dedicate itself to developing those practices,’ Mayo says of what drew her to Baker Botts.
‘The ability to so deftly adapt the firm’s strategy to address the emerging issues of the energy transition, as well as the ability to leverage its deep expertise to the same legal problems in a new context, was truly impressive to me,’ she adds.
Lisa DeMarco is Senior Partner and CEO at Resilient in Toronto. Having run her own firm for the past seven years, DeMarco says it was rebranded Resilient to represent the firm’s focus on climate resilience, indigenous peoples and resilient energy. ‘I know I have about ten years left in this market and I’d like my legacy and my team to be Resilient, not DeMarco,’ she says, explaining why she bucked the tradition of using the firm’s founder’s name.
‘Our external client facing work is changing hugely,’ says Taylor. ‘Those who advise mining companies are, with their clients, exploring new areas of law and regulation such as greenhouse gas reporting and contracting for offsets and on-site renewables.’
Many law firms have long had climate change practices, but also continue to serve the fossil fuel industry. This further contributes to the climate crisis, say Law Students for Climate Accountability – a group who describe themselves as ‘uncovering the role of top law firms in the climate crisis’.
The group wrote in its inaugural Law Firm Climate Change Scorecard report in late 2020 that ‘law firms constitute an indispensable pillar of support for the fossil fuel industry’. They do this, the group argues, by writing contracts for new pipelines and refineries, lobbying policymakers and defending fossil fuel clients for environmental regulation violations.
‘My sense is that there is a divide in the legal community on this,’ says Jonathan Cocker, Sustainability Initiatives Officer of the IBA Environment, Health and Safety Law Committee and a Toronto-based partner at Borden Ladner Gervais. He notes that oil and gas companies have more recently been investing in cleaner alternatives rather than fossil fuels. He adds that ‘the regulators are pushing us and our clients to be diversified and lower our emissions profile’.
At big corporate firms, ‘it doesn’t create an internal debate that is new’ to have both a fossil fuel and a climate change practice, says Cocker.
Taylor stresses that it’s not about dropping clients for newer ones, but about helping them with their own transitions.
This sensitivity is especially important for firms operating in developing and emerging economies, says Hanim Hamzah, Co-Chair of the IBA Law Firm Management Committee and the Singapore-based regional managing partner for ZICO Law. ‘[Environmental, social and governance] may not be top of [clients'] minds,’ she says of some of the countries in the Association of Southeast Asian Nations region. ‘There are more pressing issues for some like development and infrastructure.’
This also extends to how law firms choose to run their practice, and what measures they adopt internally to reduce their environmental impact – with a reduction in travel universally seen as a key solution to reduce law firm emissions. But, warns Hamzah, some clients will still expect in-person meetings and networking.
‘You can introduce things in pockets, in line with jurisdictional suitability, but if you push too hard before the market is ready, you risk losing work and clients,’ she says. ‘You need to be sensitive to cultural nuances.’
Clayton Utz emphasises its carbon neutrality in recruitment, says Taylor, and publishes its third-party audited greenhouse gas report on its website as well as details of carbon offsets purchased. 'It’s not just about buying offsets – we actually want to reduce our own footprint. The biggest hurdle is travel, but the pandemic has really helped us with that.’ She envisages a permanent reduction in the firm’s work travel in the future, but not as low as it has been during the Covid-19 pandemic.
DeMarco also sees Resilient’s net zero pledge as important for recruitment and says her firm will be ‘net carbon negative’ by the end of 2021. Measures taken include: reduced travel, the purchase of emission removal units and increased home working. ‘The brightest and best millennials coming into the marketplace expect that,’ she says.
While larger law firms, such as those in the Magic Circle, have led the way, it takes longer to trickle down to small and mid-sized firms, says Hamzah. Mayo believes the pandemic has shown the opportunities from embracing change.
‘New generations of young lawyers all over the world are demanding it in every aspect of the practice, and firms will lose out on top talent if they don’t think seriously about these issues and respond accordingly,’ Mayo adds.
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