The consequences of the Jahn-Teller (JT) orbital-lattice coupling for magnetism of pseudospin J_{eff}=1/2 and J_{eff}=0 compounds are addressed. In the former case, represented by Sr_2IrO_4, this coupling generates, through the so-called pseudo-JT effect, orthorhombic deformations of a crystal concomitant with magnetic ordering. The orthorhombicity axis is tied to the magnetization and rotates with it under magnetic field. The theory resolves a number of puzzles in Sr_2IrO_4 such as the origin of in-plane magnetic anisotropy and magnon gaps, metamagnetic transition, etc. In J_{eff}=0 systems, the pseudo-JT effect leads to spin-nematic transition well above magnetic ordering, which may explain the origin of `orbital order in Ca_2RuO_4
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