Establishing a reputation
"We have very strict requirements on reputation issues, we need to know who we are dealing with"OLEG BATIUK, MANAGING PARTNER AT THE KYIV OFFICE OF DENTONS, EMPHASIZES
— What are your impressions of the outgoing year? Did your forecasts come true?
— Our forecasts proved to be correct. We look forward with cautious optimism, we did not expect a special investment boom in Ukraine this year, and we do not expect it next year. Against this background, we have every reason to be happy with this year in terms of both financial indicators and the quality of our work. We have fulfilled several major projects in energy and information technology sector, and work on a number of projects in the financial and energy sectors is still ongoing.
In general, we have a very good combination of projects of different scale. And it's really good, because the market cannot depend on one client or one project. We need a mix of different practices and projects. There are not so many large projects on the market, and they tend to come to an end. Since most of them involve tender procedures for the purchase of legal services, including projects financed from the state budget, they are not always as profitable as we would like. Therefore, I am very pleased that our partners, our practices, and our clients complement each other, and in general, we get good results at the end of the year.
Of course, we are thinking about next year, and here I see a lot of interesting questions that have not yet been answered.
— What sphere do these questions refer to?
— I believe that political factors will play an even more important role than this year. I wouldn't like to overestimate them, because business does not always develop with an eye on political conditions. But such areas as energy, infrastructure, public and private partnership are very closely linked with government agencies and politics, and it is difficult to expect an investment breakthrough here.
— In what practices is the synergy you're talking about observed most of all, and where does cross-selling work better?
— I wouldn't say that cross-selling depends on a specific practice. More important is how the firm encourages it, including financially. A lot depends on the position of foreign partners, their use of the advantages of a global law firm. It so happens that a client who is interesting for us can be found somewhere in Ohio. Sometimes you get a job from partners from other offices in completely unexpected areas.
Dentons has a very good synergy of transaction practices and regular work. Few people in Ukraine can boast of having 25 years of experience in support of one client, and we’re not always talking about transaction work, we advise this client about corporate and labor law, compliance and investigations, and taxation. We also use secondments. But these are not the things to talk about. On the one hand, they are not very interesting and, on the other hand, clients do not always agree to the disclosure of such cases.
This year there is much more work with global clients on supporting multi-jurisdictional projects. Dentons pays a great deal of attention to building relationships with global clients, entering the panels of their legal advisors. For global law firms, the statistics of representation on the panels of legal advisors of Fortune 500 companies, is very important. These companies are present almost everywhere, they have large budgets and have constant work. This is the prize for which we are fighting. For our global marketing team, this is the number one priority.
If the law firm is not included in the panel, then, it cannot, as a rule, count on getting a job. I'm not saying whether that is good or bad; it's the opinion of clients.
— What strategy do you follow in working with Ukrainian clients? How much are you interested in them in reality?
— We have been working successfully with Ukrainian clients for a long time. Moreover, one of the largest clients of Dentons' Kyiv office has Ukrainian roots. We have very strict requirements on reputation issues, origin of the money, we need to know who we are dealing with. We had to refuse Ukrainian clients whose reputation profile didn't suit us for a number of reasons. There are interesting proposals on the market related to the past activities of certain legal entities and individuals who believe that they should apply to European institutions, but we don't support such projects.
On the other hand, Ukrainian business is becoming more civilized, entering foreign markets, and sometimes in the most unexpected countries. We focus on large and medium-sized players who have export-oriented business, who have or will have business interests in countries where we can serve them. These are, in particular, Arab countries, China, Latin America, the EU, and North America.
I wouldn't say that our goal is to serve all Ukrainian clients who come to us. But we want to work with those who conduct business in a civilized manner, who want to develop, including internationally. This is the client profile we focus on.
— What business scale are your stakes focused on?
— If we look at Ukrainian business, evaluate its cash flow, we will understand that Ukraine is a very rich country. In Ukraine, there are quite a lot of companies that can pay the bills of any law firm. And there are many examples of cooperation of Ukrainian companies with the most expensive English and American lawyers. Some examples are well known and even outright scandalous. There are enough clients in Ukraine, both very large and medium-sized, which can afford to work with international law firms and do so. Maybe not as often as we would like, but we see a certain reserve and potential here.
If we talk about specific financial indicators, I don't think that there is a direct link between the firm's turnover and the lawyers it hires. The situation is the same all over the world: no- one will pay high fees for routine, technical issues. In the case of a project on which the future of the firm depends, fundamental dispute or entering a new market, then it isn't the done thing to economize, our businessmen understand that in such instances it is necessary to turn to those who can provide the most effective support. By offering Kyiv or Central European rates in New York or London, I hardly think you will be able to enlist the best lawyers in a project.
Any businessman should understand that if he wants to achieve something in a new jurisdiction that this will cost money. Turnover, of course, is important, but I can't say that it is decisive.
Our Ukrainian clients are not the richest people in Ukraine, but we work with them well and fruitfully.
— What is the most unexpected project you received this year?
— Any project can become unexpected on our market. Even the establishment of a legal entity sometimes turns into a marathon with obstacles.
There were interesting energy projects, but I wouldn't call them unexpected, but rather predictable. Interesting cases are related to investigations, analysis of the prospects of potential disputes between shareholders. There were quite unexpected requests regarding the sanctions regime. And as often happens, the most interesting thing is what cannot be told.
— Who defines development trends on the global market?
— Clients, of course, and that’s OK. But I’d like law firms to be more active, to observe what processes are taking place in other countries, and to anticipate trends on local markets. I don’t see much activity in this regard so far. Very few make efforts to be at the forefront of innovative development on the legal services market.
— What would you attribute to be the real competitive advantages in the existing market configuration?
— A global footprint, financial discipline, the ability to follow the clients where they are. Every firm has to understand what it focuses on, and what it wants to be. If you understand this, the clients will also believe that and follow you. We understand that very well at Dentons.