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Boom times for lawyers as Washington pursues Big Tech

The mounting legal and regulatory scrutiny facing Big Tech has led to a wave of lawsuits, investigations and proposed legislation aimed at ending the dominance of Amazon, Apple, Facebook and Google.

June 30, 2021 / 03:17 PM IST
In total, 51 lawyers from 21 law firms have appeared in court in the Google cases, including lawyers representing states like Texas and some of Google’s competitors. Facebook, which faces its own antitrust case, has hired a team of lawyers in a similar way.

In total, 51 lawyers from 21 law firms have appeared in court in the Google cases, including lawyers representing states like Texas and some of Google’s competitors. Facebook, which faces its own antitrust case, has hired a team of lawyers in a similar way.

Lawyers at Kellogg, Hansen, Todd, Figel & Frederick, a top corporate law firm, were abuzz on Monday as they grappled with a federal judge’s rulings about antitrust cases related to their client: Facebook.

Last month, lawyers at Cravath, Swaine & Moore, one of the country's elite law firms, advised Amazon over its acquisition of MGM, which is facing antitrust scrutiny from regulators.

And a slate of litigators for the prominent law firm Gibson, Dunn & Crutcher gave closing arguments for Apple in an antitrust lawsuit brought by Epic Games.

The mounting legal and regulatory scrutiny facing Big Tech has led to a wave of lawsuits, investigations and proposed legislation aimed at ending the dominance of Amazon, Apple, Facebook and Google. Whether those efforts succeed may take years to sort out, but there is already one clear winner: the nation’s legal industry.

Not since the government sued to break up Microsoft in the late 1990s has there been greater demand for people who know the ins and outs of corporate competition law. That is only certain to increase after a federal judge dismissed a states’ antitrust case against Facebook on Monday and said the Federal Trade Commission’s complaint against the social network needed to be revised.

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The rulings put the Facebook case back into the hands of Lina Khan, a fierce critic of the tech industry, who recently became chair of the FTC, an agency that regulates antitrust. Last week, bills aimed at weakening the companies’ grip on the industry also advanced in the House.

The clamor for talent extends to lobbying firms and economists, who can help the companies formulate counterarguments and provide expert testimony about the companies’ market power. But it is particularly acute in the legal profession.

The tech giants are already flooding courtrooms with large teams of prominent lawyers to press their case. Google faces multiple antitrust lawsuits, one brought by the Justice Department, and two others from state attorneys general. Since those suits were filed, 16 lawyers from six law firms have appeared in courts to defend the company, according to public records.

In total, 51 lawyers from 21 law firms have appeared in court in the Google cases, including lawyers representing states like Texas and some of Google’s competitors. Facebook, which faces its own antitrust case, has hired a team of lawyers in a similar way.

As a result, antitrust work — once a relatively sleepy area of the legal world — is now providing a windfall for the big firms. Top partners at a large firm often bill $1,000 to $2,000 an hour, and the scores of young associates who help them charge hundreds of dollars an hour.

The cost is minimal for the giant tech companies. But it has widened the divide in resources between regulators and the companies they police, making it harder for the government to recruit and keep talent to take on the industry. It has also raised fresh concerns about Washington’s revolving door, since many of the lawyers used by the tech companies recently worked for the government.

In 2019, when the Justice Department searched for a lead investigator into Google and other tech giants, officials came up with a list of candidates from about 10 law firms, according to two people with knowledge of the search. But one by one, they said, potential candidates had to be crossed off the list because they already worked for Big Tech clients, leaving few options.

More recently, conflicts of interest have complicated the Biden administration’s search for the head of the Justice Department’s antitrust division. Several times, critics of the industry have criticized a potential candidate because of the person’s ties to Big Tech.

“These companies have the monetary resources to hire the best and the brightest,” said William J. Baer, former head of antitrust at the Justice Department under President Barack Obama. “But it does emphasize the resource disparity between what the government can throw at these issues and the virtually unlimited resources of these companies.”

Rebecca Slaughter, a Democratic commissioner at the FTC, said antitrust cases were among their most expensive. The cost for one expert witness to speak on behalf of the agency exceeds the witness costs for all other cases pursued by the agency in any given year.

“The demand for antitrust enforcement has gone up dramatically over the last decade and has really skyrocketed in the last year,” Slaughter said. “The costs involved in bringing large and complex cases and reviewing the tsunami of proposed mergers are huge, especially for a small agency like ours.”

Amazon, Facebook and Google declined to comment. Apple and the law firms did not respond to requests for comment.

Freshfields, the oldest global law firm in the world, shows the extent of the boom times for antitrust legal work.

In 2018, the firm hired Eric Mahr, a former lead litigator for the Justice Department, to expand the firm’s antitrust practice in Washington. Mahr then brought on many former colleagues, including Julie Elmer, an experienced trial lawyer. The firm now has a dozen partners with antitrust expertise. Elmer and Mahr are leading Google’s defense against an ad-tech lawsuit led by the Texas attorney general.

The firm has also expanded west, to be closer to its valuable tech clients. The firm, which is based in Britain, sent its lead European antitrust partner, Alan Ryan, to open an office in Menlo Park in California's Silicon Valley. He has since added six partners from other firms. In total, 25 people work in the firm’s office on Sand Hill Road, the most expensive office real estate in the nation and home to venture capital firms including Kleiner Perkins.

Next year, the company will move into two floors in a new office complex in Redwood City to accommodate more staff members, including four new antitrust partners Ryan is seeking to hire.

“Can we double it in the next year? I hope so,” Ryan said. “We plan to grow. The only question is how fast we can get there.”

The tech firms are also bringing antitrust experts in-house. Amazon, Facebook and Google each have dozens of in-house lawyers. In January 2020, Amazon hired a former FTC lawyer, Amy Posner. In April 2020, Facebook hired numerous government officials, starting with another longtime FTC lawyer in the competition bureau.

“What’s striking is the number of people going to work directly for tech companies from the agencies,” said William Kovacic, a former chairman of the FTC. “That reflects a real change.”

Jonathan Kanter, a longtime antitrust lawyer who has been rumored as a possible nominee to lead the Justice Department’s antitrust division, built his career largely around working for the rivals of Google, Facebook, Amazon and Apple. His client list included both big companies like Microsoft and News Corp. and smaller firms like Yelp and Spotify.

In 2016, he moved to Paul, Weiss, Rifkind, Wharton & Garrison, a prominent corporate litigation firm. But last year, Kanter’s work criticizing Big Tech started to present conflicts with other parts of the firm’s sprawling portfolio, said two people with knowledge of the matter. Specifically, his practice was at odds with work being done by Bill Isaacson and Karen Dunn, two lawyers the firm had just hired who are known to represent Apple and Amazon, said another person with knowledge of the situation.

Kanter faced a choice: Drop some of his clients or leave the firm. He left.

“Jonathan made this decision due to a complicated legal conflict that would have required him to discontinue important and long-standing client representations and relationships,” the firm said in a note circulated at the time.

Kanter, Isaacson and Dunn did not reply to requests for comment, nor did a spokeswoman for Paul, Weiss.

Kanter has since founded his own firm, the Kanter Law Group, which advertises itself online as an “antitrust advocacy boutique.” According to court records, its lawyers have already been hired by critics of Apple and Google.

By Cecilia Kang and David McCabe

c.2021 The New York Times Company



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New York Times
first published: Jun 30, 2021 03:16 pm
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