Ethical Leadership in Law Firms: Crisis or Turning Point?
In the early months of 2025, we watched as the newly re-elected Trump administration set about dismantling what many had long considered the cornerstones of American governance, accountability, and ethical leadership. Within weeks, the Office of Government Ethics was gutted, key inspectors-general were removed, and the enforcement of the Foreign Corrupt Practices Act (FCPA), the benchmark of anti-corruption compliance worldwide since 1977, was abruptly paused by executive order. The message was unambiguous: America was under new management, and the rules that once defined “ethical business” were now, at best, negotiable.
At the centre of this shift stands not just the office of the President but the personal commercial empire of Donald Trump and his family. From the acceptance of a $400 million luxury Boeing 747-8 from the Qatari royal family, to the rapid expansion of Trump-branded real estate projects across the Middle East, to the promotion of family-linked crypto tokens while simultaneously deregulating the digital asset market, the boundary between public policy and private gain is blurring to the point of invisibility.
Historically, American presidents avoided even the appearance of impropriety. Jimmy Carter sold his peanut farm. Ronald Reagan placed his broadcasting interests into a blind trust. Barack Obama and George W. Bush rigorously channelled even minor foreign gifts through the National Archives. By contrast, the Trump administration has redefined acceptable conduct in office, setting a new, more permissive tone not just for politics, but for the global business community that takes its cues from Washington.
The Fragility of Governance
What has become apparent is how quickly institutional guardrails can be dismantled. What took decades to build has been hollowed out in mere months. Regulatory agencies have seen their capacity slashed, whistleblower protections eroded, and enforcement pipelines stalled. The fabric of governance, long held together by both law and professional norms, now shows visible signs of tearing.
This raises uncomfortable questions about the resilience of ethical business standards. Can they be restored? Or are we witnessing a more permanent redefinition of what is “acceptable” in the intersection of commerce, politics, and law?
The International Response. A New Axis of Enforcement
While the United States appears to be in retreat, other jurisdictions are moving to fill the void. In March 2025, the United Kingdom, Switzerland, and France formed the International Anti-Corruption Taskforce (IACT) with the stated aim of maintaining global enforcement standards. Canada is actively negotiating entry as an associate member. These jurisdictions are seeking to leverage joint investigations, data-sharing protocols, and coordinated asset recovery actions to uphold anti-corruption norms.
This emerging enforcement axis could reshape the compliance landscape for multinational businesses. Rather than operating under a unified U.S.-led standard, companies may soon face a bifurcated regime: permissive in the United States, stringent in Europe and parts of the Commonwealth. This divergence will require new strategic thinking, particularly for law firms tasked with advising clients on cross-border risk.
The Impact on Law Firms. New Risks, New Opportunities
For law firms, these developments present both challenges and opportunities. Traditional demand for FCPA-driven investigations and monitorships is already declining. In its place, firms are seeing growing client needs in strategic risk assessment, supply chain auditing, and voluntary adherence to higher international standards, even where domestic law has softened.
Firms must now decide whether to recalibrate their ethical baselines. Will they adopt a minimalist, “letter-of-the-law” approach that mirrors the new U.S. posture? Or will they position themselves as custodians of higher, internationally recognised integrity standards? In global and international firms with a strong US presence, and competing client and partner interests, these questions are particularly fraught.
Those who choose the international path must invest in building multi-jurisdictional expertise, particularly in relation to the new enforcement coalition led by the UK, Switzerland, and France. They must also consider how to support clients navigating “private ordering” mechanisms, such as investor-driven ESG requirements and contractual anti-bribery obligations, which are likely to grow in importance as public enforcement falters.
Equally, firms must not underestimate the internal risks. As the wider business world adjusts to the new tone set in Washington, law firms themselves may face heightened pressure from clients seeking more permissive conflict clearance or ethical flexibility. Maintaining firm-wide standards, backed by robust governance and cultural reinforcement, will be essential to preserving long-term credibility.
A Defining Moment for the Profession
The legal sector stands at a defining point. One path follows the political winds, adapting to lower enforcement and relaxed norms. The other path asserts the profession’s traditional role as guardian of ethical conduct and rule of law, even when public institutions falter.
It is easier to dismantle than to rebuild. Once ethical guardrails are removed, it can take years, even decades, to restore them. Yet the alternative is far more costly: the erosion of trust in legal institutions, the loss of international credibility, and the fragmentation of compliance standards across the global economy.
Law firm leaders must therefore ask themselves: What role do we want to play in shaping the next era of ethical business? And are we prepared to lead, even if the political centre no longer holds?
The choices made now will define not just the future of professional services, but the broader economic and social contract on which the legitimacy of global business ultimately depends.