Prof. John Morley

Presidential directives issued in early 2025 single out and impose severe restrictions on specific law firms—restrictions such as barring lawyers from federal buildings, revoking security clearances, and even rejecting or canceling government contracts for firm clients. These measures can pose a real threat to the business models of the firms targeted. In the accompanying Talks On Law video, Professor John Morley of Yale Law School unpacks how these sanctions can jeopardize even the most profitable partnerships.

The orders’ most potent lever is client pressure. Morley observes that when agencies threaten to withhold contracts, licenses, or other approvals from a targeted firm’s clients, companies must choose between trusted counsel and their core business interests. Few boards will jeopardize a lucrative government bid or an FDA clearance, even if they would otherwise prefer to stay with their lawyers. As a result, affected clients will feel significant pressure to move their work to counsel unshadowed by federal disfavor.

Client flight is costly in itself, but the real fear is that it may trigger something more dangerous—a self‑reinforcing partner exodus. Morley explains that profits per partner fall when large matters walk out the door. As a result, the rainmakers who can most easily move take their books of business elsewhere; each departure intensifies the pay cut for those who remain. The result in such cases, Morley explains, is a spiraling cycle of partner withdrawal that resembles a run on a bank without the benefit of deposit protection.

Bankruptcy and partnership rules add urgency. Capital repaid to a departing partner within the bankruptcy preference window can be clawed back, and “fraudulent‑transfer” doctrine may reach profit distributions made while the firm is insolvent. Partners who stay on can also face unfinished‑business liability, owing to creditors a share of ongoing fees earned on matters that were open at collapse. These doctrines paradoxically reward partners for leaving early and punish those who stay, speeding the unraveling of a firm once trouble appears.

Faced with these pressures, litigation‑focused firms such as Perkins Coie have fought the directives in court, while large transactional shops—including Skadden and Paul Weiss—negotiated largely symbolic settlements that involve pro bono work the firms were already comfortable with. Yet even with courtroom victories and low-cost settlements, Morley sees a “lose-lose” dynamic. Settling firms risk reputational damage for appearing compliant, while firms that fight may win prestige but still operate under a shadow of government displeasure that can unsettle risk-averse clients. Morley suggests this could push full-service giants to weigh political exposure more carefully and further split the market between firms willing to compromise for transactional access and those ready to litigate any matter—even at the risk of provoking official ire.

The poison pill, Pac-Man, golden parachute - these hostile takeover defense mechanisms have colorful names, but what do they all mean? Professor Morley breaks them down and explains how the laws have changed the landscape of M&A since the 1980s.

When you die without a will, the default rules of inheritance law kick in, allocating assets based on established formulas and hierarchies. In this conversation, Prof. John Morley (Yale Law School) explains basic inheritance law and delves into the default rules that come into play when a person dies without a will (“intestate”) and how these rules both vary significantly from state to state and are often at odds with common expectations when it comes to an individual’s legacy. 

Through his recent survey, Prof. Morley has uncovered differences in inheritance expectations across various demographic groups. For instance, women are notably less likely than men to intentionally leave money to their spouses. Additionally, the conversation explores discrepancies by race and sexual orientation as well as some notable surprises pertaining to less traditional family structures.

Prof. Morley's insights not only underscore the importance of having a will that accurately reflects one's wishes but also suggest that intestacy laws across the nation may be out of step with modern expectations and in need of revision.

Cryptocurrency and initial coin offering (ICO) markets have boomed in recent years, creating billions of dollars in value. ICOs appear to be a simple way for entrepreneurs to fundraise, but when the tokens being offered act like securities, they may be running afoul of US securities laws. Professor John Morley of Yale Law explains.

Mutual funds in the US own about 1/3 of all American corporate stocks and currently hold over $16 trillion in assets, making mutual funds the largest category of household financial assets.  So when it comes to the US economy, they matter in a big way.  Professor John Morley of Yale Law explores the unique structure of mutual funds that creates risks and opportunities for funds and investors.

Directed trusts have become increasingly popular over the past few decades, in part, for the flexibility they offer in managing trust assets. In a directed trust, a person other than the trustee holds power to make decisions over investment, management, distribution, or some other aspect of trust administration and has the power to direct the trustee. As common as they’ve become, many states’ statutes have yet to iron out the legal uncertainties that arise when a nontrustee (or a “trust director”) holds power over the trust. In an effort to provide clarity and guidance, the Uniform Law Commission approved in 2017 the Uniform Directed Trust Act (UDTA), which has been adopted in some form by 16 states as of 2022. Professor John Morley, the reporter of the UDTA, explains some of the practical innovations and key provisions in the new law, including the scope of the powers of the trust director and the fiduciary duties of the trust director and trustee.