This is a must read story. I keep asking him why he's against DEI (He's a white dude...) but his knowledge of all these inside corporate players is unmatched. You can also find this over at Substack.
Monopoly Round-Up: The Democrats' Corporate Lawyers Get the Humiliation They DeserveThe Democratic establishment brain was at the giant law firm Paul Weiss. They just bent the knee to Trump. Plus, tennis players revolt, and Google accidentally confesses to monopolization.Lots of monopoly related news, as usual. But I want to start with an important moment in the Democratic Party establishment. Donald Trump got a major corporate law firm, pretty much the shadow Kamala Harris administration in waiting, to bend the knee. At the same time, there were massive outpourings of popular anger towards oligarchs at rallies held by Bernie Sanders, as well as rage from Democratic voters towards their own leaders at town halls. The Democratic Party is in chaos. Let’s dive in. For a long time, I’ve discussed a secret center of power in America, what is known as “Big Law,” a network of law firms who serve as a shadow government for the out-of-power party. Lawyers have always had a special place in America. They must maintain a dual loyalty, serving clients with advice and court representation, but serving the public as officers of the court. There’s a dense ethical code lawyers must maintain. For instance, they can’t help their clients break the law, and they can’t switch sides in a dispute. In 1931, Robert Jackson, who later served on the Supreme Court, gave a speech to the American Bar Association making that point. “We believe in an independent bar, free not only from government control, but intellectually independent of client control,” he said. “In the client-and-attorney relation the client is not a master, the lawyer is not a mere hired hand. He is an officer of the Court, with a duty of independent judgment in the performance of his professional service and under a duty to serve all sorts and conditions of men.” But Jackson, along with men he admired such as Louis Brandeis, did not feel that lawyers, especially those in New York working for financial firms, lived up to their billing, instead seeking to twist the law on behalf of the powerful. And the problem is much worse in modern America, dominated as it is by oligarchs. This is especially true in cloistered specialities, like antitrust. A few years ago, I spoke at the American Bar Association Antitrust Section, and observed the rage the gathered corporate lawyers felt towards anti-monopolists for barging into their club. While I noted at the time the legal elements of the disagreement, there’s a political element as well. These lawyers are the Democratic establishment, the real thinkers and operatives behind the frontmen like Democratic minority leader Chuck Schumer and candidates like Kamala Harris and Barack Obama. And it’s been this way for decades, such that it’s systematized. Young ambitious liberals have to get their few years at one of these firms and then they can be considered a real lawyer.
A key firm in this network is Paul, Weiss, Rifkind, Wharton & Garrison, a multi-billion dollar entity that is so politically connected its New York office served as the unofficial campaign headquarters for Kamala Harris’ campaign. Democratic House leader Hakeem Jeffries worked as an associate at Paul Weiss for six years (and has a donor network there), former Obama cabinet members Jeh Johnson and Loretta Lynch are partners, and so is Chuck Schumer’s brother. Sonya Sotomayor, Ruth Bader Ginsburg, and Elana Kagan were summer associates. At times Paul Weiss’ political connections were comical. In late 2024, a firm partner, Karen Dunn, both prepped Harris for her debate with Trump the very same day as she opened up for Google in its adtech antitrust case against the Biden administration. Paul Weiss is also legendary, started in the 19th century by New York Jews, then becoming a top tier law practice by the 1950s. Paul Weiss helped write briefs in Brown v. Board of Education, fought Robert Moses, defended abortion rights and gay rights, and brought the “first purely environmental law case in the country - a 1963 action successfully stopping a proposed power plant on landmark Storm King Mountain in the Hudson River Valley.” It broke the color barrier, the first big New York firm to hire a black associate, a black female associate, and the first to make a woman a partner. It employed Presidential candidate Adlai E. Stevenson and JFK speechwriter Ted Sorensen, as well as appointees from every Presidential administration going back to Herbert Hoover. Today, at $7.5 million in profit per partner in 2024, the fifth highest of major law firms, Paul Weiss is anchored by private equity titan Apollo Global Management, as well as Google, Amazon, and Apple. It reps nine of the top ten private equity firms. Just this week, it got a securities action against Amazon dismissed, advised Rocket Mortgage in buying Redfin, and helped engineer the roll-up of roofing in the $11 billion QXO/Beacon Roofing Supply deal. Its work spans the gamut of pro-corporate aggressive lawyering. Brad Karp, for instance, sent a letter opposing the Biden administration’s $8 cap on credit card late fees. It helped Verizon buy Frontier, did one of the largest private equity deals in China and as an internal investigator failed to catch one of the largest stock frauds in history. Paul Weiss is a firm unafraid of standing up to the government on behalf of its corporate or pro bono clients. During the first term of Trump, Brad Karp publicly rallied the resistance, issuing a “a call to arms” for lawyers to fight the administration’s illegal actions on immigration, and said lawyers were obligated to defend the rule of law. The firm’s principles are laudable, “We refuse to be deterred by the unpopularity of a client or his cause from accepting a matter which justice and professional responsibility prompt us to take.” Karp, who also helped Harris in debate prep, seemed to span both the pro-corporate and pro-democracy world. There’s a public spiritedness to the firm; Jeh Johnson, for instance, serves on the board of Columbia University. A week and a half ago, Donald Trump targeted Paul Weiss with an executive order stripping the firm of security clearances and business with the government, as well as potentially barring their lawyers from Federal courthouses. In addition, Trump implied he would penalize Paul Weiss’ clients. It’s a blatantly illegal order, the kind widely understood as an authoritarian move . It followed on Trump targeting two other big law firms, Covington and Burling and Perkins Coie, whose partners had engaged in partisan activity against the Republicans. Threatening lawyers who represent clients opposed to the government is tin pot dictator stuff, meant to chill any opposition. So you would think that a politically wired firm would recognize that they have an ethical obligation, or even just a branding one, to oppose it. Indeed, a high profile case like this is in some ways a lawyer’s dream, it’s so obviously morally repugnant and a sure loser, or winner potentially for Paul Weiss. Moreover, you would think that the rest of the big law world would rally behind these firms, seeing that any one of them could be next. And indeed, Perkins Coie fought the order in court, quickly winning a temporary stay, with the judge saying this order “sends chills down my spine.” But in the case of Paul Weiss, that’s not what happened. As the Wall Street Journal reported, “Competitors immediately began circling after the March 14 order, calling coveted Paul Weiss clients to note that the firm had been marked as an enemy of the president, according to people familiar with the conversations.” Within a few days, Brad Karp, the firm’s Chairman, sought to cut a deal with the Trump administration. Paul Weiss hired Bill Burck, the lawyer for indicted New York City mayor Eric Adams. Working through Burck, as well as New England Patriots owner Robert Kraft, a firm client, Karp reached out to Trump, and they met for three hours. In the middle of that meeting with Karp, Trump picked up the phone and calling Paul Weiss’s most important rival, Robert Giuffra of Sullivan & Cromwell, and asked what he should do. The whole episode leaked, which revealed to the entire corporate and legal world that Paul Weiss has no juice in Trump-world, and Sullivan & Cromwell does. Finally, they cut a deal. In return for Trump ending his executive order, the firm agreed to end its diversity programs, do $40 million of free work for Trump-aligned priorities, and ensure that it would hire and represent Trump-aligned clients. Karp also disavowed former Paul Weiss lawyer Mark Pomerantz, who had worked in the Manhattan District Attorney’s office in a case against Trump. This capitulation shocked and horrified the legal world, inviting Trump to expand his attack on the legal community. The next day, Trump issued another executive order calling for the government to sanction lawyers who bring “frivolous, unreasonable, and vexatious” lawsuits against the government. That’s a signal to the entire legal world that representing clients in disagreements with the government carries a personal and professional risk. Along with a series of other actions, from stripping lawful residents of green cards for holding certain political views, and threatening to send U.S. citizens to prisons in El Salvador, there’s a political chill happening in America, reminiscent of the McCarthy era. In this context, Paul Weiss’ immediate capitulation caused a lot of lawyers to despair. One way of seeing this dynamic is to ask the question: If this venerable law firm, which has the resources to fight and a legacy to protect, capitulates, then who else will? But the way I see this dynamic is that it merely reveals to everyone in Democratic politics what we’ve already known, which is that big law is a place of toxic anti-democratic sentiment. And the entire edifice of party politics, that fancy lawyers do the real governing work while shabby hacks handle the rabble during the elections, is a charade to hand over America to private equity and monopoly. The story of Paul Weiss is the story of modern corporate liberalism turned sour. It’s a wildly unethical place, flipping sides on Google for money. Moreover, its lawyers have openly encouraged corporate clients to break the law. In 2021, Paul Weiss’ top deal guy, Scott Barshay, laid out the firm’s strategy to address a new more aggressive merger posture, which was to get as many illegal deals into the agencies as possible, because there just weren’t the resources to stop them all.
In 2023, frustrated that the merger pipeline had slowed down, Barshay laid out the firm’s real political goals. “Jonathan Kanter at DOJ and Lina Khan at the FTC are just anti-deal,” he said. “In the context of who’s going to run antitrust, let’s just say our business will be a lot better if it’s somebody else.” When Karp and Dunn prepped Harris and became major fundraisers, it wasn’t due to concern for democracy, it was concern for their wallets and political ambitions. Dunn was likely going to be the White House counsel. There’s a lot more behind Paul Weiss and the elite big law world. Much of the bipartisan legal network that has pushed to outsource national security to companies and then represent them when they run into data breaches or hacks, men like John P. Carlin and women like Jeannie Rhee, work at places like this. Carlin was Lisa Monaco’s deputy at the Department of Justice, and Rhee worked for the Mueller investigation, and then defended Google in antitrust matters. Prominent pro-big tech voices, like Politico write Ankush Khardori, worked at Paul Weiss, and still maintain connections there. It’s a network of people permeating the government and the national security establishment. But what should be crystal clear to everyone in politics is these lawyers aren’t just unethical, but are in many ways the reason that the Democratic Party is as enfeebled and pathetic as it seems to be. Big law is the brains of the Democrats, with the actual elected officials, often meek pleasers with little experience wielding real power, as ornaments who serve up slop on centrist and leftism and other meaningless terms. The alchemy of big law was always they way in which you seamlessly revolve in and out of government - the allure of making a lot of money and governing. That is what is shattering. Relatedly, for the first time in my lifetime, Democratic voters are turning against their own leaders. 40% of Democratic voters approve of Congressional Democrats, and 49% disapprove. Last year, 75% approved and just 21% disapproved. At town halls, Democratic members of Congress are encountering not support, but rage. As Axios reported, a “senior House Democrat told Axios that a colleague called them after a town hall crying and said: "They hate us. They hate us.”’ Democratic voters haven’t fingered biglaw as the culprit, so the question right now is whether corporate America and big law will remain homeless, or whether firms like Paul Weiss can recapture what they had. But there is deep rage in the Democratic base, and on the right, at oligarchy. And there’s another group ascending against the anti-populists who run Democratic politics. On Friday, there were 34,000 people in Denver, Colorado at a Bernie Sanders rally. For context, that’s 5% of the population of Denver, and 1% of the population of the Denver metro area.
One of the speakers was FTC Commissioner Alvaro Bedoya, who Trump had tried to remove last week. Bedoya and his colleague, Rebecca Kelly Slaughter, had been in the shadow of former Chair Lina Khan, but were important officials in moving populist policy. (Dave Dayen and I interviewed Bedoya on Organized Money, which you can listen to here. According to Bedoya it’s the most in-depth interview he’s done on it so far.) In contrast to Paul Weiss, instead of lying down, they chose to fight. Both are doing media tours to discuss the work they are doing against oligarchy. Bedoya went to Colorado and spoke before that giant crowd. When was the last time a commissioner of a small Federal antitrust agency did that?  Sanders, who is attracting a lot of people who did not support him in 2016 and 2020 to his rallies, is building a different kind of politics. He has refined his argument to focus on oligarchy, the group of superrich who are running the United States. And a newer generation of politicians are recognizing in that argument something that makes sense. There are conflicting messages, notably the New York Times’ Ezra Klein and The Atlantic’s Derek Thompson launching a campaign around the concept of Abundance, which I’ll touch on soon. But the possibility of sharpening policy tools to bring our oligarchs back into our democracy and match them with a political coalition is there. And in that sense, I am thankful to Paul Weiss and Brad Karp. In this dangerous moment, the Democratic corporate establishment, by capitulating so obviously to Trump in return for corporate money, has just ripped out the heart that ran the Clinton, Obama, and much of the toxic parts of the Biden administrations. And they did so at the only moment in the last two decades during which normal Democrats are looking for someone to blame for their own party’s fecklessness. And who better to blame than the would-be Kamala Harris staff, a pack of Google and private equity defense lawyers - and Chuck Schumer’s brother - who, when the chips were down, bent the knee to Trump? And now, the news of the week, from tennis players rebelling against the major tournaments using antitrust law to Google accidentally confessing to monopolization. ... |
