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In today’s big story, Donald Trump went after one of America’s top law firms. Its decision to fight back took just two hours.
What’s on deck
Markets: Early Tesla investor Ross Gerber told BI he’s even “more disturbed” after its latest earnings.
Tech: Microsoft is trying to simplify its AI sales pitch, slides obtained by BI reveal.
Business: Your favorite Amazon products are about to get more expensive.
But first, Trump is outgunned in court.
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The big story
Big Law’s Trump fight
An “existential crisis” is how Paul Weiss’ chairman, Brad Karp, described it.
President Donald Trump’s slew of executive orders targeting high-profile law firms triggered a fight-or-flight response.
Nine law firms took flight and struck deals with the president — Paul Weiss included — collectively promising $940 million in pro bono work for the administration.
Four — Perkins Coie, Jenner & Block, WilmerHale, and Susman Godfrey — opted to fight the administration in court. And they’re winning.
They’ve argued that the executive orders violate the Constitution, illegally target people and companies for their speech, and violate their clients’ right to counsel.
In a hearing on April 23, US District Judge Beryl Howell appeared incredulous at the government’s arguments. She directed a barrage of often sarcastic questions at Richard Lawson, a Justice Department lawyer, brushing aside some of his positions as “hyper-technical legal arguments that may have no merit.”
On the docket, meanwhile, the administration is outgunned.
The firms suing the government are working with legal heavyweights. Perkins Coie picked Williams & Connolly; Cooley LLP is representing Jenner & Block; Paul Clement is representing WilmerHale; and Susman Godfrey hired Munger Tolles.
“You’re a bit outmanned here,” a judge quipped at Lawson when he showed up alone to a hearing in Susman Godfrey’s case earlier this month.
Inside the decision to fight back.
In a memo to staff, Karp justified Paul Weiss’ move to cut a deal with Trump by saying that leadership had “incredibly difficult decisions” to make.
For Susman Godfrey, the way forward was clear. No one at the firm spoke with the White House about cutting a deal, according to two people familiar with the matter.
BI’s Jack Newsham and Jacob Shamsian have exclusive reporting about how Susman Godfrey decided to sue the Trump administration in just two hours.
3 things in markets
1. Ross Gerber’s not feeling too hot about Tesla. Though investors cheered Elon Musk’s impending DOGE departure, Ross Gerber told BI he’s even “more disturbed” after its earnings call. Even with Musk back at the helm, Gerber doubts the EV maker can mount a comeback.
2. America is dangerously close to the worst kind of recession. The country’s on the verge of stagflation, a condition in which inflation is taking off at the same time as the job market is getting weaker. It’s a rock-and-a-hard place situation for the Fed, and leaves investors in a pickle.
3. There are also signs, however, that investors might be able to take a breath. The stock market has flashed a handful of technical signals that suggest the tariff-induced sell-off that kicked off earlier this month may be over.
3 things in tech
1. Microsoft cleans up its AI sales pitch. The software giant is trying to streamline how it pitches its many different AI tools — which are all called Copilot — to customers, according to internal presentation slides viewed by BI. The current approach confused customers and slowed sales, insiders said.
2. The manpower driving Tesla’s robotaxi launch. The EV maker aims to roll out robotaxis in Austin this June. To prepare, about 300 test operators have been navigating the city’s streets over the past few months. Here’s what insiders had to say on “Project Rodeo.”
3. Everybody talks (too much). Group chat overload has produced a new-old solution: the rise of voice memos. It’s part of a broader trend toward speaking over texting for more personal communication. Not everyone’s thrilled, though — especially when the calls happen in public.
3 things in business
1. Price hikes are hitting your favorite Amazon products. Some of the site’s most popular items are getting pricier amid tariff news, according to data from SmartScout. Some products have even reached record highs, and it’s not just an issue for customers.
2. Uber’s CEO says your ride could cost less in a recession. CEO Dara Khosrowshahi said the ride-hailing service is “recession-resistant” and could even make rides cheaper in a downturn — if more people sign up to be drivers, bringing labor costs down.
3. What do Delta, Thermo Fisher, and Chipotle have in common? They are among the companies lowering or ditching their guidance as tariff chaos mounts. Here’s the full list of companies on edge.
In other news
What’s happening today
- Canadian federal elections.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York (on parental leave). Hallam Bullock, senior editor, in London. Grace Lett, editor, in Chicago. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Meghan Morris, deputy bureau chief, in Singapore. Ella Hopkins, associate editor, in London. Elizabeth Casolo, fellow, in Chicago.
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