ABA Journal Speaks with Josh Gerben Regarding Western Businesses Leaving Russia

Many Western companies that temporarily ceased operations in Russia after the country’s invasion of Ukraine, have begun to fully cut ties with the country. International law firms are now starting to follow suit.

ABA Journal and Josh Gerben discuss the reasoning behind the mass exodus as well if there’s a possibility of returning to Russia in the future.

While many companies initially suspended operations in Russia as a protest to the atrocities of the Ukraine invasion, it’s now become almost impossible for companies to stay in the country. Economic sanctions imposed by the U.S. and other Western countries make it difficult for Western businesses to fund any Russian business operations, such as payroll, and stay compliant with the sanctions.

Moreover, allegations of war crimes and human rights abuses create a moral and ethical incentive for global companies and firms, says Josh Gerben, a trademark attorney and founder and principal of the firm Gerben Perrott in D.C. It’s possible firms and companies may not contemplate a return until there is a regime change, he says.

“There’s an understanding that if you do business with Russia, you are turning your back on the atrocities that are happening,” Gerben says. “That is a really difficult place for companies to be if they’re going to be doing business in that country going forward.”

Will any Western businesses or firms ever return to Russia? It remains to be seen but studies suggest that Gen-Z and Millennial consumers and employees are more likely to hold corporations to high standards of social responsibility, which may also be a contributing factor for businesses pulling out of Russia completely.

“If they weren’t already deterred before, they will certainly be deterred now,” Gerben adds. “There aren’t going to be many U.S. companies that would even consider entering Russia, because they saw what happened, and they don’t know when it’ll happen again, and they’re not going to be willing to take that risk.”

Source: Reynolds, Matt. https://www.abajournal.com. “Lights Out: Is there a way back for international law firms in Russia.” 18 May 2022.