2007’s rising tide
Expulsions, raids, split-offs, invasions and new formations are just some of the goings-on that characterised 2007 as a stand-out year for Europe’s law firms. In this first of a two-part article, Richard Tromans and Jeremy Fleming draw on our research over the last 12 months to highlight the year’s most significant events...
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Russia
Meanwhile in Russia, all eyes of those interested in this important market are on the imminent elections: voting for the state duma (parliament) was due to take place in December, with a new president being appointed in March. However, lawyers did not anticipate significant overall change – while Vladimir Putin is constitutionally barred from serving a third term, he is widely expected to play a pivotal role in determining his successor.
In terms of the country’s legal market the principal trends, if anything, intensified this year. Speaking in July, lawyers cited M&A and real estate work as the star performers and, on the back of this, many other practice areas also thrived. While foreign direct investment continued to pour in, practitioners noted that Russian clients were requiring more sophisticated work and becoming ever-more active both within and outside their borders. Deal sizes kept mounting and, as White & Case Moscow-based partner Hermann Schmitt observed: “The opportunities are greater than they’ve ever been.”
Across the board, commercial law firms expanded their headcounts. This is despite another key market trait, which was also confirmed over the past year: the shortage of highly-skilled lawyers. And along with this constraint, managing partners grappled with the corollary of very high salaries, together with steep overhead costs. Dr Christian von Wistinghausen, who heads up Beiten Burkhardt’s office in the Russian capital, commented: “Only firms which do high quality work can survive the tremendous cost pressures and competition for good lawyers. You’re either in the first or second tier or you drop out – some players have more or less disappeared from the market.”
Despite this challenging environment local practices stepped up their efforts to become increasingly competitive. EPAM opened its doors in London during April and also won widespread kudos for its role advising Rusal in the $30bn merger of the aluminium giant with Sual and Glencore. Other than expansion, another area in which Russia’s leading indigenous firms, such as Pepeliaev Goltsblat & Partners, Alrud and Monastyrsky Zyuba Stepanov & Partners, sought to keep raising their game was in adapting their founder-partner structures. Andrey Gorodissky & Partners’ name partner Andrey Gorodissky commented: “It’s a long process, but with Russian law firms opening outside of the country and occupying additional sectors of the legal market, we will become more competitive internationally.”
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