The law firms that caved to President Donald Trump’s demands are losing major clients as a direct result of their appeasement, according to a report by The Wall Street Journal.

Since the beginning of his second term, Trump has issued a series of executive orders targeting by name multiple BigLaw firms that represented prominent Democratic clients like Hillary Clinton, refused to represent him or other pro-MAGA causes, hired former federal prosecutors who investigated him, or worked on the criminal cases he was facing before he won re-election. The sanctions Trump has sought to impose include stripping the security clearances of the firms’ attorneys and staff (critically important for certain types of federal legal cases), terminating contracts the firms had with federal agencies, barring the firms’ employees from federal buildings (again, a major obstacle for the lawyers to represent their clients), demanding firms abolish diversity, equity, and inclusion (DEI) policies and programs, and threatening additional civil and criminal investigations against the firms.

A growing list of those firms have caved, like Paul Weiss, Latham & Watkins, and Skadden Arps, offering swift compliance with Trump’s decrees and hundreds of millions of dollars of pro bono legal work to appease the president.

But a handful are digging in their heels and refusing to yield, even filing lawsuits to defend their rights, including WilmerHale, Jenner & Block, Perkins Coie, and Susman Godfrey — and thus far, it’s paying off in court, with federal judges emphatically ruling that Trump’s executive orders are unconstitutional (temporarily blocked for Susman Godfrey and struck down for the other three).

Standing strong against Trump’s demands is paying off with clients too, according to the Journal’s report, which said that at least eleven major companies were shifting their legal work away from the firms that entered into agreement with the Trump administration in favor of the holdouts. Some of the companies went on the record; others were mentioned after the reporters spoke to general counsels and others familiar with the companies’ decisions.

Included in the list are McDonald’s, investment bank and financial services company Morgan Stanley, and Oracle Corporation, the tech giant founded by Larry Ellison.

The sources that spoke to the Journal’s reporters cited concerns that a law firm that so quickly caved to pressure from the White House couldn’t be trusted to fight hard for them during negotiations or in court.

The chief legal officer for Morgan Stanley, Eric Grossman, met with Latham chair Richard Trobman after the firm made its deal with Trump, and “heard him out about the firm’s reasoning for striking a deal and acknowledged that companies have to do what is best for themselves” — but then reached out “to law firms targeted by the White House that hadn’t signed deals that they were looking to give them new business,” according to the Journal.

The article also cited an unnamed “general counsel of one major financial firm” who was represented by Paul Weiss and grew increasingly anxious when the firm didn’t fight back after being targeted by Trump’s executive order. The news of Paul Weiss’ settlement with Trump made her feel “physically ill,” she told the Journal.

The decision by McDonald’s to drop a star Paul Weiss litigator, Loretta Lynch, was especially notable because it is so rare to switch legal representation so close to trial. Lynch, who was Attorney General for President Barack Obama, was representing the fast-food company in a lawsuit alleging it had discriminated against Black-owned media companies.

The Journal’s report further noted that the law firms that settled with the administration found that while the managing partners’ intentions may have been to “buy peace” and “move on,” they often ended up not just driving off major clients, but also sparking “rifts between partners” and leading younger associates to quit, a stunning step to walk away from the lucrative compensation and benefits offered by these BigLaw firms for their fiercely competitive associate positions.

The blowback — from the four law firms so far that have successfully litigated against the Trump administration and the trouble brewing within the firms that settled — may be helping protect other firms from being targeted. The president has not issued a new executive order directed at a law firm since the beginning of April.

The post Major Corporations — Including Oracle, McDonald’s, and Morgan Stanley — Are Dumping Law Firms That Caved to Trump first appeared on Mediaite.

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