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University law dean Prof Mark Henaghan said the decision meant the law firm would not be able to use the university's campus to recruit students during the external review.
Each year law firms held workshops on campuses around New Zealand hoping to attract top students, he said.
Otago is joined by Auckland, Waikato, Victoria and Canterbury Universities and AUT in cutting any events on their campuses related to the firm.
It was a joint decision between all of the law faculties and their respective universities, Prof Henaghan said.
``Basically, that's the only contact we have with law firms is they come in, hold some workshops and do recruiting.''
Students were still free to approach Russell McVeagh themselves and would not be discouraged from doing so, he said.
An Otago law student is among those said to have been targeted by inappropriate sexual behaviour.
The student was at the firm's Wellington office as part of its summer law-clerk programme when the inappropriate behaviour was said to have occurred.
Prof Henaghan said the decision by the universities and the ongoing publicity of the situation at Russell McVeagh sent a message to other law firms about what appropriate behaviour was.
``We want our students to be safe - that's the bottom line for us.''
The Society of Otago University Law Students said in a statement yesterday it shared the university's and wider public's concerns about the inappropriate sexual behaviour that occurred.
It encouraged any current or former students to contact the society, the university or the appropriate authorities if they were concerned about anything to do with the situation.
Society president Tim Austen said he was unable to comment further until he consulted the society's executive.
Last week, Russell McVeagh announced an external review would be done in response to the ``serious'' sexual allegations involving law students.
In a statement, the firm has said it took allegations of poor behaviour involving consensual sexual events seriously and reiterated its commitment to a culture of zero tolerance of any sexual harassment.
Yesterday, the New Zealand Law Society announced it was setting up a working group to improve reporting of harassment in the legal profession.