Invective Left and Right in King+Spalding DOMA Affair

Opinionated political hyperbole continues to shroud cold analysis in our society, nowhere more evident than exaggerated grandstanding about one law firm’s role in representing politicians committed to upholding a controversial 1996 statute defining marriage in a particular way. On one side, the lawyer handling the case accused his firm of cowardly capitulating to political pressures that risk undermining the rule of law; his opponents accused the lawyer of signing an agreement that was “illegal” and “criminal.” In fact, the firm credibly cited internal failures, not political pressures, and the agreement’s terms do not warrant such condemning invective.

As background: The politicians, a group of House members calling themselves the Bipartisan Legal Advisory Group, authorized the General Counsel of the House on March 14, 2011 to retain a law firm to support Section III of the Defense of Marriage Act against constitutional challenge in United States federal courts. The General Counsel retained King & Spalding, a large and generally respected law firm, naming as the principal lawyer Paul Clement, a former Solicitor General of the United States, under a retention agreement signed April 14. The firm promptly filed an application to intervene in a pending civil case, on April 18.

Yesterday, however, the firm announced its preference to rescind the contract and filed formal papers seeking to withdraw its application to intervene. The firm explained its preference as due to an internal failure to vet the retention adequately. Mr. Clement promptly resigned the firm, writing a letter protesting against “abandoning” a client because its “legal position is unpopular in certain quarters.” He attributed the firm’s decision to political efforts that sought to “delegitimize” the representation and complained that it’s not the business of the firm or himself to evaluate whether a client is on the “wrong side of history” or the “right side of history.”

The firm, notably, did not mention any of these factors in its request to withdraw its application, citing instead “problems with the firm’s vetting process.” The vetting process could have failed in many ways, and those may include failure to evaluate fully the political aspects of the case. But it could also be due to the low price reflected in the retainer agreement, which capped the total payment for services at $500,000, put the average hourly rate for attorney time at a low $520, and discounted non-lawyer rates to 75% of market rates. Mr. Clement should be ashamed for his posturing. If his ideals require resigning and finding another firm to handle the case, he should simply do so without the self-righteous hyperbole and without gratuitously smearing the firm.

On the other side of this overheated and irresponsible exchange are those who claim the retainer agreement is “insulting, illegal, unconscionable or criminal” because of a clause they say bars firm employees from exercising basic rights to speak on controversial matters of public significance. These spokespeople contended that the contract violated a state law that prohibits employers from adopting or enforcing any “rule, regulation or policy” that “forbids or prevents” employees “from engaging or participating in politics.” It’s highly contestable that any provision of the retainer agreement violates this basic law—despite confident and elaborate contrary protestations.

The offending clause, instead, restricts firm employees from “lobbying or advocating,” “for or against,” (1) any “pending legislation” in the House or (2) “pending legislation” in the House or the Senate addressing the Act in question. Any client retaining and paying a law firm to represent a particular position in a legal matter would reasonably wish that the firm limit its employees from campaigns against the position of any sort. But few firms could agree to such a broad limit. And the clause at issue in this case does not provide for such a limit.

Certainly it would not amount to a “rule, regulation or policy” against “participating in politics.”   It is much more narrow. It is not a “rule, regulation or policy” but a term of a contract. It restricts “lobbying or advocacy for or against” any position on “pending legislation.” It does not restrict “participating in politics.”  Maybe the firm would like to narrow that further or remove it and maybe the poor internal vetting process it cites concerns that clause. But it is not obviously odious and is certainly not the obnoxious muzzle political activists portray it to be.

Pity that vociferous opinion peddlers can’t avoid any opportunity to pound the table and spout invective and instead stick to facts and analysis and reasoned discourse. It’s one price of free speech, of course, and worth paying, but it’s important for the rest of us to stick with the facts.

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12 Responses

  1. Shag from Brookline says:

    “Odious” is in the nostrils of the sniffer.

    Would King & Spaulding have been required to promptly notify its employees (partners, associates, paralegals, secretaries, etc) of the proposed limiting clause? Would the employees have been bound outside of firm work from violation of the clause? What about matters of conscience of employees? Would they risk termination or reprimand?

  2. Lawrence Cunningham says:

    Shag:

    My advice to K&S would be simply to classify the clause along with the many other extensive restrictions all employees of a law firm always face: against trading in client securities, against having conflicts of interest, and against revealing client confidences–whether any of that is against the employee’s conscience or not.

    The firm’s compliance committee would follow its usual practice of so informing employees and monitoring compliance in the ordinary course. The same principles of termination would apply as apply to employees who cause a law firm to violate legal ethics requirements or who violate the federal securities laws.

    I’d stress that the contract’s operative words (“lobbying or advocacy” about “pending legislation”) are terms of art in Washington, referencing organized professional campaigns. No matters of “employee conscience” are implicated. Employees are free to do whatever they want in their own private life and time.

    I would suggest, however, that senior employees, such as partners who may be seen to speak for the firm, make clear in their private blogs, letters or rallies that they speak privately and not for the firm.

    To be clear, here are the clauses claimed to be “criminal” and “unconscionable.”

    4. [The firm] agrees and warrants: . . .

    f. That all of its partners and employees who perform services pursuant to this Agreement will not engage in lobbying or advocacy for or against any legislation (i) that is pending before the U.S. House of Representatives or any committee thereof during the term of the Agreement, or (ii) that would alter or amend in any way the Defense of Marriage Act and is pending before either the U.S. House of Representatives or the U.S. Senate or any committee or either body during the term of the Agreement.

    g. That all of its partners and employees who do not perform services pursuant to this Agreement will not engage in lobbying or advocacy for or against any legislation (i) that is pending before the [Committee on House Administration of the U.S. House of Representatives] during the term of the Agreement, or (ii) that would alter or amend in any way the Defense of Marriage Act and is pending before either the U.S. House of Representatives or the U.S. Senate or any committee or either body during the term of the Agreement.

    /30/

  3. Shag from Brookline says:

    Lawrence,
    Perhaps SNL might take a crack at 4. f. & g. in the form of comparable provisions in a corporate client’s proposed engagement of King & Spaulding. For example, what might Coca Cola insist upon, especially regarding those employees not performing “services pursuant to this Agreement … ” such as being seen drinking Pepsi Cola?

    Do you, or others reading this Blog, know of comparable agreements to the one the House GOP proposed required by clients of a large law firm? How common are such agreements?

    With respect to this:

    “I’d stress that the contract’s operative words (‘lobbying or advocacy’ about ‘pending legislation’) are terms of art in Washington, referencing organized professional campaigns.”

    and employees lower than paralegals clearly would so understand just because they work in Washington?

    By the way, does the proposed agreement provide a specific remedy for breach?

    Yes, the boys and girls at SNL could have a good time with this, including a skit of the House GOP honchos in a session with their attorneys drawing up the proposed agreement.

    Further by the way, did Clement sign off or “bless” the proposed agreement? Did Clement suggest any changes? Digging deeper just might reveal a pony.

  4. Lawrence Cunningham says:

    1. It may not work to analogize a Congressional group to a private company like Coke, since Members of Congress have oaths and responsibilities in Congress to which the anti-lobbying/advocacy clause may speak. But if the analogy is apt, imagine if Coke retained K&S to defend a federal statute (say banning states from regulating labels or imposing sales taxes on its products) using a retainer agreement restricting the firm and its employees from lobbying or advocating for or against pending legislation on the subject. I don’t see anything pernicious about that.

    2. Clauses of this sort are largely unnecessary for ordinary business clients. The default rules of legal ethics require zealous advocacy, protecting client confidences, and avoiding conflicts of interest. Such features would be implicated when determining whether a firm or its employees should be permitted or restrained from engaging in lobbying and advocacy on the subject matter of a representation.

    3. It isn’t necessary that employees lower than paralegals working in Washington or elsewhere understand the terms of the retainer agreement for those terms to be valid. It’s unlikely that they would ever see it. The firm’s compliance committee would explain its meaning to them.

    4. The agreement does not provide a specific remedy for breach.

    5. The agreement is not “proposed” but is fully executed by the General Counsel of the House (Kerry Kircher) and by King & Spalding (by Paul Clement). So, yes, Mr. Clement not only signed off and blessed the agreement but executed it for the firm.

    6. That raises a nice and different question: under what legal theory does King & Spalding claim to have the right to rescind the contract? I cannot think of any. In fact, the House’s General Counsel may have a claim for breach of contract against the firm. The damages, however, are likely to be nominal at best.

  5. Shag from Brookline says:

    Your item 5 response arouses curiosity as to the course of the negotiating that took place between Kircher and Clement, particularly concerning 4. f. & g, unless Clement merely accepted and signed what Kircher presented. Did other attorneys at K&S get involved with the agreement before it was signed? Was Clement specifically authorized by K&S to execute the agreement without review by a K&S committee? Or did Clement, as a partner, have the authority to bind K&S on his own without input from other partners in the firm? Surely there might be a pony somewhere.

  6. TJ says:

    Lawrence, why do you say that the firm “credibly” cites internal failures? Of course it is not going to say that “we backed out because of political pressure.” So where does the credibility come from? The evidence that the so-called internal failure to vet is pretextual (or at least the only thing they failed to “vet’ properly is a failure to anticipate the magnitude of the political backlash) is: (1) Clement’s resignation; (2) HRC’s claim to the credit; (3) no elaboration by the firm of what the supposed internal failures were; and (4) an assumption that competent law firms do not usually fail to “vet” a huge case like this beforehand.

  7. Lawrence Cunningham says:

    TJ:

    The best evidence is the money. The deal Mr. Clement cut with the House gave away unlimited time of three King & Spalding partners and a bundle of associates on a case that will consume a trial, intermediate appeal, and Supreme Court battle, for a price capped at $500,000 and no bonus payment for success. The opportunity cost to the firm is closer to $1 million and may be twice that or three times that. Were I partner at King & Spalding, I would object to such a retention on that basis alone, wholly apart from the potential upside or downside of the political implications.

    Concerning the “evidence” to which you refer: (1) Clement presents himself poorly in his tirade against the firm, not a responsible professional member of it, but a political hack, so I discount his hyperbole; (2) operatives at the HRC are equally culpable as mere political activists whose statements warrant limited respect; (3) the firm doesn’t owe the public an elaboration of its internal failures; and (4) it is not safe to assume that law firms make no errors in vetting cases, as such errors recur.

    That said, in my post and comments, I noted the possibility that political calculations drove the firm’s decision to withdraw. Yet Mr. Clement presumed to make that his prerogative to pronounce, another reason to doubt his fitness as a law partner, and the HRC stooped to the same depths, another reason to demote its reliability.

  8. Shag from Brookline says:

    I noted an item via law.com 4/26/11 “Democrats Want to Review Clement’s New Contract” that makes reference to a report by The National Law Journal on Monday that “a House rule restricts the lobbying that a firm can do when one of its employees is on contract for the House.” Can someone provide a link to that rule and perhaps supply some history of how the rule has worked?

  9. TJ says:

    Lawrence, given how much King & Spalding spent to get Clement and was paying him, the money I think very much cuts the other way. To say this differently, if the money was a main or even primary motivation, the easier thing to do by far was either to renegotiate with the house for a bigger payment (the $1 million you estimate) or to cut Clement’s salary by that amount.

    And your weighing of Clement’s letter is begging the question. If you start by assuming the firm is credible, then of course Clement comes off like a hack. But if you assume nothing, then it is simply a credibility contest between the two. I will note that pretty much every other prominent liberal I can find (e.g. Mike Dorf) says that K&S’s given reason here is either suspect or outright false.

    And of course the firm does not “owe” the outside world an explanation. But the outside world has no obligation to take the firm’s non-specific explanation for things as automatically credible, either.

  10. Lawrence Cunningham says:

    TJ: Thanks again. You make great points and I concur heartily with the second and third, but concerning point one, on the money, yes, it’s always nice to renegotiate unattractive contracts, but counterparty’s never want to, whether the House paying more or Mr. Clement drawing less. As a sage mentor advised me many years ago, in enigmatic dramas, follow the money, whether what you think is at stake is politics, principle, or even ego.

  11. TJ says:

    Lawrence, I agree that the House was unlikely to have paid more. But given that Clement was reportedly drawing $5 million a year at K&S, and his new firm is very unlikely to match that (with only 2 associates), he is probably taking a pay cut of over $1 million just this year alone. Follow the money is always good advice, but Clement here is almost unquestionably worse off on that score, so he would have been far better of taking a pay cut at K&S. For that reason, I continue to doubt that K&S was motivated by the direct costs of the representation. Now, the money in the sense of other clients wanting to avoid the controversy, that I can believe; and the amount at stake there would be far larger than the direct cost in terms of lawyer time (and not something at cutting Clement’s pay could resolve).

  12. Shag from Brookline says:

    I can just hear Clement emulating “Evita”‘s “Don’t cry for me Argentina …. ” Maybe TJ can start up a fund to make Clement’s whole financially. If Clement is truly principled, then he is unquestionably better off. But do we know, truly, what Clement’s motivation was with his public resignation letter? Might this enhance his standing with the SCOTUS “five”? We may never really, really know the true motivations of either Clement or K&S. In the meantime, perhaps all the brouhaha may advance the “cause” of the House GOP.