House Probes Like ‘Nine-Alarm Fire,’ Law Firms Prep for Democrats

By Elizabeth Olson

Major law firms are using all the tools in their considerable arsenals to ready clients for any scrutiny from possible new hearings and investigations initiated by Democrats when they take over U.S. House control beginning in January.

Videos, podcasts, webinars, all-day seminars and old-fashioned consultations are being employed to bring clients, especially high-profile congressional targets like pharmaceutical companies, up to speed on what may be to come.

“A congressional investigation is like a nine-alarm fire, and really essentially brings the company to a stop until the crisis has been resolved,” Robert Kelner, a partner at Covington & Burling, said in a recent video for clients on the risks of such scrutiny.

Kelner, whose clients have included former National Security Adviser Michael Flynn, heads Covington’s congressional investigations practice, one of several such practices at elite law firm offices in the nation’s capital.

“We have been making our clients aware over the last several months of how to avoid being in harm’s way,” he told Bloomberg Law, in an interview.

In addition to Covington, other firms that have congressional investigations groups include King & Spalding, Hogan Lovells, Akin Gump, WilmerHale, and Steptoe & Johnson.

Subpoena Danger

Hot-button issues that are likely to attract lawmaker attention in the next Congress include drug prices, opioids, health care, privacy, and the environment.

The potential for congressional investigative activity also includes President Donald Trump’s potential violation of the Constitution’s Emoluments Clause on accepting gifts, ethical violations by Trump appointees, immigration policy, and the special counsel investigation of Russian meddling in the 2016 election.

“We have a responsibility for oversight,” Nancy Pelosi, the House minority leader and presumptive speaker come January, said after the midterm vote. “You can be sure of one thing, when we go down any of these paths, we know what we’re doing and we’ll do it right.”

Once a company is in congressional crosshairs, lawyers get more hands on, mapping out strategy and helping executives hone and practice answers. The stakes are higher now that Democrats will be armed with subpoenas to force production of documents or call executives to the congressional carpet.

“Nothing sharpens the mind like getting a subpoena,” said Robert Kyle, a partner in Hogan Lovells’ government relations and public affairs practice.

Corporate Scrutiny

While much attention is focused on potential congressional investigations of the Trump administration, most law firms are focused on corporate clients who come under congressional scrutiny.

Pharma companies are facing the double jeopardy of irate lawmakers and of administration officials who want to target drug prices.

The Trump administration recently urged companies to list the prices they charge for drugs in their television ad spots. And, in recent weeks, a group of Democratic lawmakers sent letters to major drug makers including Merck and Pfizer asking about drug prices.

Next week King & Spalding will be holding its annual “Pharma U,” a day-long information session in Philadelphia, where hundreds of stakeholders from drug companies, biologics, and other clients will be schooled in investigative, regulatory, patent, litigation, political and other issues.

“We focus on the core issues that our clients could encounter,” said Dan Donovan, a partner at King & Spalding, and a former Senate investigator who now works in the firm’s congressional investigation practice.

New Blood

Law firms are not likely to staff up wholesale for the new Congress, but they may tap lateral expertise to beef up practices such as litigation, regulation, IP and investigations. Some Republican congressional staff are expected to land spots at law firms when they depart.

And other lawyers are likely to make the reverse trip, joining major committees, including House Intelligence and House Oversight committees, which are likely to pursue the lion’s share of investigations. Others could join a beefed up White House counsel’s office under the new leadership of Pat Cipollone.

Firms may also pick up some clients from Trump administration officials who become targets of House inquiries and need legal counsel.

Most firms already regularly track congressional letters of inquiry sent to clients so they stay informed of the specific subjects that interest Congress and that could be topics of inquiry.

But veterans of congressional inquiries like Raphael Prober, co-head of Akin Gump’s congressional investigations practice, noted that gearing up for probes can take time.

“When the Democrats were in charge in earlier years, they had a number of investigations. We expect to see something similar this time but first they will need to build out their investigative capacity,” he said.

Congress will have to fill dozens of staff slots first. But once that is done, Prober said, “it will be like a game of three-dimensional speed chess, and we have to be ready for that because there can be collateral consequences, including to a company’s reputation.”

To prepare clients, Prober and practice co-head Steve Ross created a podcast on congressional investigations, explaining the process to clients, especially those which may be unaware of Congress’ authority and ability to compel cooperation.

Many firms like Covington keep tabs on public statements—which run into many dozens—made about firm’s clients in order to keep them abreast of topics that could wind up drawing Congress’s attention.