Transformation processes on the legal market continue. Participants generally managed to adapt to difficult economic conditions, there are even cases of return increase – but only in Hryvnia equivalent. Compared to other sectors of the economy the management of the situation is rather good, although there are no reasons for optimism yet.
The legal services market depends directly on the economic and political situation in the country. In times of lingering crisis and the lukewarm reform of key institutions it saves one effort to talk about explosive development. A year has passed quietly enough, and it appears that the next one will not be much different – the views of lawyers are more often directed towards 2017. Ensuring business continuity and maintaining operating liquidity are on the agenda of most market players.
A notable trend of early 2015 that can be traced throughout the year was revision of strategies by the law firms, the development of new, often more realistic plans. “Many companies think about their efficiency, reforms within the company and about finding the solution to the issue of the optimal structure and the required number of lawyers and load”, says Oleg Malskyi, partner at AstapovLawyers. Analysis of the current state of the company, customer base, competitors, and the market in general is carried out at the first stage. The targets and means of achieving them (realistic, measurable, tangible, achievable, and attached to specific indicators and deadlines) are developed in accordance with the results. It is mandatory to analyze the factors that may have an impact on the achievement of strategic targets, first and foremost – a negative impact. The priority in this case is given to general economic and political trends as well as the quality of functioning of the state apparatus.
Comings and goings
Interesting events in market structure occurred in the international law firms segment. Thus, the firm from Magic Circle – Clifford Chance discontinued its work in Ukraine. The team of the company’s office in Kiev continues to work on the market under the brand of Redcliffe Partners. At the same time, relations with the parent company are based on the model of Best Friends. The new firm claims to be more adaptable to the local Ukrainian market. In November of this year, French law firm Jeantet started to work on the Ukrainian market. This event does not fit into the recent prevailing trend of inter-national law firms closing their offices in Ukraine. The core of the new office became the team of lawyers from the Kiev representative office of another French law firm – Gide Loyrette Nouel. It left Ukraine after working on the market for nine years. At the same time, the team of three partners and 13 lawyers from Gide Loyrette Nouel joined the International Law Firm Integrites.
It should be noted that both Clifford Chance and Gide Loyrette Nouel are on the list of 50 leading law firms of Ukraine 2015 as they were present on the market in the period covered by the study. We thought it necessary to mention the changes that occurred and to update the data for this law firms in the summary table.
The leading positions are still held by “consistent law firms” that have the resources to compensate a slump in individual practices. Of course, in some segments of the practice they compete not only among themselves but also with high-grade legal boutiques. Except that the latter, particularly those spe-cializing in the resolution of disputes, show sufficient dynamic development especially noticeable against the background of a falling market.
The tendency towards segmentation of the Ukrainian legal services market continues. Even the largest firms that have made their names due to the fact that they cover all sectors of practice and provide a full range of services, prefer the emphasis on several of the most profitable fields and almost obliga-torily develop the area of dispute resolution.
The sectoral segmentation of the legal business can be noted among the tendencies of the year: the energy, pharmaceuticals, agricultural markets are in-dicated as among the most profitable practices. This is a consequence of the transformation processes in separate law firms and adaptation of their ser-vices to the specific industrial needs of customers.
The number of projects announced has decreased significantly; law firms and their clients are now paying more attention to the issue of confidentiality. The structure of requests also changed, and people turn to lawyers for assistance in the optimization, economy, restructuring, withdrawal or saving of assets. And even on those matters the business is trying to work unassisted, engaging lawyers only in the most difficult situations. Rather large volumes of work are associated with the completion of projects from previous years.
As expected the practice of dispute resolution has become the most common one. The results of the corporate law and taxation practice should be recog-nized as rather good taking into account the current market situation. The main money flows are generated in these practices. The volumes of work with distressed assets and debts (including supervising the process of restructuring debt on loans and Eurobond transactions), tax structuring and consulting, providing consultation in the field of bank and currency legislation has increased significantly.
Judicial practice is presented by a wide range of services: beginning with disputes involving creditors in connection with non-return of funds by insolvent banks, tax disputes, including those arising in connection with changes in fiscal policy, traditional disputes with the contracting parties in connection with failure to fulfil contractual obligations and ending with labour disputes in connection with staff reductions – the crisis actualized all directions.
The demand for services to protect businesses and individuals in criminal cases is also persistently high. As Olga Prosianiuk, managing partner of AVER LEX JSC says, the category of so-called tax criminal proceedings has considerable volume. In recent times, the practice of a complex “criminal” enter-prise check has become widespread and, when the availability of criminal proceedings with the most generalized theory into alleged abuse of officials of the enterprise for its official powers becomes the basis for the inspection of nearly all aspects of an enterprise’s activity.
The interesting fact is that: criminal practice is strategic only for several law firms. Much more often legal assistance in criminal cases is an accessory by nature and is attached to a strong fiscal, judicial, bankruptcy practice and even to the practice of intellectual property. Certain trends can be traced to the popularity of some specific practices. Thus, South Ukrainian law firms hold strong positions in the practice of transport law. Issues regarding customs law are most often solved by boutique firms, which in most cases also provide services in the field of taxation and/or intellectual property. The practice of bankruptcy is more common among Ukrainian law firms, and the practice of restructuring among international ones.
To sum up, we can mention the continuing transformation of the market. Firms and lawyers that were able to adapt to new areas of work aimed at ad-dressing crisis situations experienced by customers spent the year quite actively, as evidenced by their high indicators in the study “Top Fifty Law Firms of Ukraine”.