Smoot-Hawley 2.0 & Big Law: We Don't Know

For decades. the metaphor of the global economic devastation generated by Smoot-Hawley has been tossed about. 

During the second Trump administration, which is committed to tariff reform, the references to Smoot-Hawley have become talking points. Most admit, though, that there are major differences in economic, business and political institutions between then and now. 

However, the almost 900-drop in the Dow on Friday, after the administration's proposal about tariffs in China, has intensified focus on the possible fallout from intensified protectionism and trade wars.

That force field of concern is being called "Smoot-Hawley 2.0."

Most successful law firms got there by anticipating what could be coming down the pike. So, many have already been, as the saying goes, getting their ducks in a row. at least as much as they can and as quickly as they can. 

For example, since cross-border M&A would probably get more antitrust scrutiny and involve litigation it was likely predicable that last September Paul, Weiss would be adding star talent in the practices guiding that.

But probably no firm, even the best positioned, is immune from negative effects.

Many experts and some with a social-media megaphone have been here before analysing law firm vunerabilities and opportunities during a Smoot-Hawley 2.0. My own sleuthing includes continual refining of prompts to ChatGPT, DIY research with trying to connect the dots and talking with smart people in various loops. 

What I've come up with is that no one knows.

For example, initially there could be a rush for advisory services such as by the WTO and hyperglobal businesses. Then, a turning inward. No more need for guidance because there's no more planning. On the domestic front industries depending on free trade could wither. Rule out much work from them. They could fold into themselves. 

Or, there could be an opportunitistic determination to move forward, no matter. That presents assignments in cross-border investigations, compliance, customs, supply chains and, yes, antitrust. In addition, it'd probably require lobbying in Washington DC. That domestic outreach could include issues of national security. Think economic sanctions, customs regulations and export controls. 

Recall billionaires were created during The Great Depression. They included Andrew Mellon, The Dupont Family and Howard Hughes. Law firms want those aggressive risk-takers as clients. 

Law firms with the kind of business model Paul, Weiss has developed may have the best shot at holding up during a severe global downturn. They might even grow. That model is:

" ... elite litigation, restructuring, and governmetn-facing advisory work ... [making] it counter-cyclical and resilent in a Smoot-Hawley-style downturn." 

In intuitive coaching I'm observing that more clients are adjusting to absolute uncertainty. Some of that is fatalistic. Some aspects emerge from a new confidence associated with still being in business, despite the whatevers.

Tomorrow is Columbus Day but financial markets will be open. How will the moving parts grind against each other?

Confidential tips about Paul, Weiss are welcome. So are bylined articles/op-eds. Please contact Jane Genova janegenova374@gmail.com or text 203-468-8579.

Thrown off your game, maybe the first time since you started working? You made all the right moves and then the world moved in another direction.

Intuitive Coaching. Special expertise with transitions, reskilling and aging. Psychic/tarot readings, upon request. Complimentary consultation with Jane Genova (Text 203-468-8579, janegenova374@gmail.com). Yes, test out the chemistry. Zero risk.