Sullivan & Cromwell: The Tesla of BIGLAW.

March 10, 2025

Once again, grassroots activists are leading the way in the effort to defend the rule of law. Small groups of independent protestors are changing the narrative from

“Genius billionaire helps make government more efficient.”

to

“Heartless billionaire destroys government and the livelihoods, health, and safety of Americans as he makes once-desirable automobile brand toxic.”

Okay, I admit that I would fail as a headline writer (except at the headline-challenged NYTimes), but you get the point. Musk’s secret is his cultlike following that imparts irrational value to his businesses. Tesla is one of two main drivers of his wealth, but Tesla’s stock is on the rocks and foundering. See Business Insider, Tesla Stock Price Outlook: 50% Crash in 2025 for TSLA, Says Ross Gerber.

The negative take on Telsa stock exists because of global macroeconomic and industry-specific reasons that pre-date the wave of #TeslaTakedown protests. But those protests are having a significant impact on the Tesla brand at a time when Musk is most reliant on the “magical thinking” of his investors. See Mihir A. Desai op-ed in NYTimes, Musk’s Cultish Business Empire May Be Starting to Crack. (Accessible to all.)

Elon Musk’s business empire may be starting to wobble.

Over the past six weeks, the value of Tesla’s shares has plunged about 40 percent, wiping out virtually all they had gained after the 2024 election.

This reversal reveals Mr. Musk’s soft underbelly: His fortune depends heavily on the inflated expectations of his rabid following.

As those expectations deflate so will his power, demonstrating that financial markets are an underappreciated guardrail against both Mr. Musk’s and President Trump’s agendas.

Desai’s dim view of Tesla’s prospects is largely independent of the increasingly toxic public perception of the Tesla brand. However, Rolling Stone provides a detailed look at the #TeslaTakedown movement in its article, Tesla Backlash Over Musk's Toxic Politics Is Spreading Fast.

Tesla was once a highly regarded brand for environmentally conscious consumers who valued a premium, high-tech experience. As the Rolling Stone article explains, those same environmentally conscious owners are likely to be called “Nazis” by pedestrians walking past a Tesla at a stoplight.

That animosity is affecting the stock price. See CNN, Wall Street is turning its back on Elon Musk. (“The drop in share price probably reflects the concern that Musk has been much a more visible – and polarizing – figure in the Trump administration than he was expected to be immediately after the election.”)

We know the protests are working because of the impact on brand perception described by Rolling Stone and because Musk has resorted to the tell-tale defense of every desperate megalomaniac everywhere: Blame George Soros. See Forbes, Elon Musk Dubiously Blames Billionaires George Soros, Reid Hoffman Over Tesla Protests—Citing Unnamed ‘Investigation’.

In short, the protests aimed at Tesla are working—both against Tesla and as a bracing reminder to other companies that decide to enable Trump: Americans care enough about their democracy to stop buying your product. Don’t take us for granted—or your stock will pay the price.

Coda:

Before connecting the Tesla protests to the headline of this newsletter, let me pause to make two points:

First, don’t rely on me for investment advice. Consult a professional or “the internet” before making any decision about investing.

Second, all protests should be limited to peaceful expressions consistent with the First Amendment. There have been scattered instances of vandalism and violence directed at Tesla dealerships. There is no evidence to suggest that those responsible for the incidents are involved in the #TeslaTakedown movement, but please remain peaceful at all times. Be smart and stay safe.

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Sullivan & Cromwell: The Tesla of BIGLAW

Trump has taken aim at elite law firms in an effort to eliminate their support for lawsuits against the administration. It is no overstatement to say that Trump has literally declared war on the legal profession by attacking specific firms—Covington & Burling and Perkins Coie—and by promising to initiate “inquiries and investigations” against “representative law firms” among the top-tier firms in the US. (Those top-tier firms are frequently collectively referred to as “Biglaw.”)

As I noted last week, Trump has punished the law firms of Covington & Burling and Perkins Coie for representing clients he perceives to be his enemy (Jack Smith and Hillary Clinton, respectively). Trump revoked security clearances for lawyers at those firms, a devastating blow for lawyers whose practices involve government contracts and whistleblower litigation.

The attack on individual law firms combined with a generalized threat to investigate “representative” Biglaw firms is designed to have a chilling effect on the legal profession. Indeed, Trump went further over the weekend, making an explicit threat against Biglaw when he told a Fox interviewer,

We have a lot of law firms that we’re going to be going after because they were very dishonest people.

Sadly, Trump's tactics are working. See WSJ, Fear of Trump Has Elite Law Firms in Retreat. (Article accessible to all.)

Per the WSJ,

In private conversations, partners at some of the nation’s leading firms have expressed outrage at the president’s actions. What they haven’t been willing to do is say so publicly. Back-channel efforts to persuade major law firms to sign public statements criticizing Trump’s actions thus far have foundered, in part because of retaliation fears, people familiar with the matter said.

At a time when the legal profession is under attack by a president determined to overthrow the Constitution and undermine the rule of law, the legal profession must remain unified in its opposition to Trump.

Until a few weeks ago, Trump was relegated to representation by solo practitioners and outcasts who left Biglaw so they could throw away their careers and professional representation to defend Trump.

However, a month ago, the preeminent law firm Sullivan & Cromwell decided to represent Trump in his appeal from the 34 felony convictions in New York. See Public Notice, (2/20/25), Elite lawyers sell out the rule of law.

Sullivan & Cromwell had previously rejected Trump's efforts to secure representation by a Biglaw firm—until Sullivan & Cromwell decided to lend its sterling reputation to a president who is the antithesis of everything that a lawyer should represent in seeking to uphold the law.

The decision to lend its credibility and reputation to Trump was shocking—as was the firm’s immediate claim that it was defending the rule of law by attacking “The misuse of the criminal law by the Manhattan D.A. to target President Trump” which “sets a dangerous precedent.”

Sullivan & Cromwell left out the part where a jury of Trump's peers convicted him on 34 counts of fraud after a fair trial. But for MAGA lawyers, those types of details are irrelevant.

Sullivan & Cromwell now represents a man who has sworn to destroy the profession that makes it possible for Sullivan & Cromwell to be wildly successful. As David Lurie writes in Public Notice, above,

It’s all but certain that many S&C lawyers are unhappy with the firm’s decision to become part of the Trump regime anti-rule of law machine, and for good reason.

Apart from the sheer immorality of the firm’s choice to become an instrument of a scheme to break America’s legal and justice systems, an obvious, and starkly pragmatic, question is also presented:

Once our justice system is destroyed and replaced with one in which power and cronyism make adherence to laws optional, who will want to spend large amounts of money on highly credentialed and knowledgeable lawyers trained to counsel clients in how to comply with them?

Ultimately, by joining in Trump’s effort to make America lawless, Sullivan & Cromwell may be working to render itself irrelevant.

The firm of Sullivan & Cromwell has lent its heft, credibility, and reputation to Trump. That is a business decision the firm is entitled to make. But the public is entitled to conclude that Sullivan & Cromwell is unworthy of the public’s trust—just like Tesla cars are undesirable despite their eco-friendly reputation and sleek design.

Sullivan & Cromwell’s decision to place greater profitability above service to the Constitution is a mistake that will forever stain its once-vaunted reputation. Henceforth, Sullivan & Cromwell is a MAGA law firm beholden to a man who seeks to destroy the rule of law and the profession that has made the firm’s success possible. See Vivia Chen on Substack, Ex-Careerist, Sullivan & Cromwell Goes MAGA.

Associates and partners at Sullivan & Cromwell who disagree with the management's decision should make their voices heard, just like the Tesla owners now seeking to terminate their leases.

It is never too late to do the right thing. Perhaps the management at Sullivan & Cromwell decided to represent Trump before he targeted Covington & Burling and Perkins Coie and the entire legal profession. Surely, that new information changes the calculus of tying the firm’s representation to a man who seeks to destroy the law that S&C lawyers have sworn to uphold.

S&C lawyers representing Trump have a choice about who they represent and what their firm’s legacy will be. From the outside, it appears that S&C made the wrong choice.

But the good news is that other firms have made the right choice—like Arnold & Porter, Cleary Gottlieb, Gibson Dunn, WilmerHale, Munger Tolles, and Jenner & Block, who are suing the administration for its illegal policies and actions. Those firms are demonstrating bold leadership in a profession under siege. Bless them all!

And let us not forget Marc Elias at Democracy Docket, who has taken the lead in opposing the administration, as have Democracy Forward and Public Citizen.

Concluding Thoughts

There is so much more to cover today, but I have hit the wall from a ten-hour flight home from the UK, compounded by the change to Daylight Savings Time. More news tomorrow, but I leave you with these thoughts:

We are living through a consequential moment in our nation’s history. There is a “right” side and a “wrong” side to that history. Someday in the not-too-distant future, there will be a reckoning in which everyone—individuals and institutions—will be called to justify their response in a moment when democracy was under attack.

Institutions with proud histories will be forced to explain why they abandoned their commitments to fairness, justice, and human decency at the first opportunity. Were they afraid? Or greedy? Both? Or—worst of all—did they not care?

Were their lofty “mission statements” mere PR exercises to make themselves feel good and attract young talent with false promises about the firm’s values? Were their commitments to equality and inclusion something they never truly believed? Was it all “for show”?

Those are uncomfortable questions with deeply troubling answers.

We must choose to be on the right side of history—because it is the right thing to do. Do not surrender to fear or intimidation. Lift up those who are being attacked for defending the rule of law. And make known your displeasure with the products and services of those who are sponsoring Trump’s frontal assault on the rule of law.

But most importantly, make a personal commitment to do everything you can to help defend democracy in its hour of need. Make your future self proud by doing the right thing at a time when doing so takes courage and determination!

Talk to you tomorrow!

Daily Dose of Perspective

We will make it through this challenging moment. If you look up at the night sky, you can see the glow from galaxies millions of light years away—including the Needle Galaxy, which is 42 million light-years from Earth.

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